The ‘PIIGS’ acronym had a clear negative impact on the response of financial markets to the ‘PIIGS countries’ during the crisis

During the Eurozone crisis the term ‘PIIGS’, denoting Portugal, Ireland, Italy, Greece and Spain, gained traction as a shorthand for referring to the countries worst hit by the crisis. But did this term have an actual impact on the way each country was treated by financial markets? Sam Brazys and Niamh Hardiman present an analysis of how the PIIGS term affected Ireland. They find that the term had a clear negative effect on the country’s market treatment, indicating that acronyms can act as signals that guide and shape market perceptions.