The political economy of the Greek debt crisis: a tale of two bailouts
Ardagna, S. & Caselli, F.
(2014).
The political economy of the Greek debt crisis: a tale of two bailouts.
American Economic Journal: Macroeconomics,
6(4), 291-323.
https://doi.org/10.1257/mac.6.4.291
(2014).
The political economy of the Greek debt crisis: a tale of two bailouts.
American Economic Journal: Macroeconomics,
6(4), 291-323.
https://doi.org/10.1257/mac.6.4.291
We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that these equilibria were likely not on the Pareto frontier, and sketch political-economy arguments for why collective policymaking in the Euro area may lead to suboptimal outcomes.