We shed light on the function, properties and optimal size of austerity using the standard sovereign model augmented to … include incomplete information about credit risk. Austerity is defined as the shortfall of consumption from the level desired … by a country and supported by its repayment capacity. We find that austerity serves as a tool for securing a more …

sovereign default premia, government consumption, and output. We find that whether austerity pays off depends on a) initial … premia in benign times. These findings pertain to the short run. Austerity always pays off in the long run, but particularly …

After the Global Financial Crisis a controversial rush to fiscal austerity followed in many countries. Yet research on … the effects of austerity on macroeconomic aggregates was and still is unsettled, mired by the difficulty of identifying … novel approach, we show that austerity is always a drag on growth, and especially so in depressed economies: a one percent …

the privatization of Greece’s public banks. We focus on two challenges for policy makers: the need to strengthen …

This paper investigates the relation between the rise in external debt and fiscal developments in Greece. We use an … reduction in (non-interest) government expenditure. They also suggest that in the case of Greece there is no further scope for a …

development in Greece, whereby increases in public expenditure, transfers and investment have maintained GDP, but with an …

The paper discusses the process of financial liberalization in Greece and the impact it is likely to have on the … conduct of monetary policy. To examine the effectiveness of exchange rate controls in Greece during periods of intense …

terms of trade. We take this evidence to suggest that the propagation mechanism for business cycles in Greece is fairly …