Foreign and public deficits in Greece : in search of causality

by Michalis Nikiforos; Laura Carvalho; Christian Schoder

This paper analyzes the trajectories of the Greek public deficit and sovereign debt over the last three decades and their connection to the political and economic environment, paying special attention to the causality between the public and the foreign deficit. The authors argue that, from 1980 to 1995, causality ran from the public deficit to the foreign deficit but has since reversed, a result of the European monetary unification process and the adoption of the common currency. This hypothesis is tested and verified econometrically using the Granger causality and cointegration analyses.

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Year of publication:	2013
Authors:	Nikiforos, Michalis ; Carvalho, Laura ; Schoder, Christian
Publisher:	Annandale-on-Hudson, NY : Levy Economics Inst.
Subject:	Greece \| crisis \| public debt \| twin deficits \| imbalances \| Griechenland \| Öffentliche Schulden \| Public debt \| Haushaltsdefizit \| Budget deficit \| Außenwirtschaftliches Gleichgewicht \| External balance \| Leistungsbilanz \| Current account \| Kausalanalyse \| Causality analysis