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  3. American Economic Journal: Macroeconomics
  4. October 2014
  5. The Political Economy of the Greek Debt Crisis: A Tale of Two Bailouts

The Political Economy of the Greek Debt Crisis: A Tale of Two Bailouts

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Abstract

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.

Citation

Ardagna, Silvia, and Francesco Caselli. 2014. "The Political Economy of the Greek Debt Crisis: A Tale of Two Bailouts." American Economic Journal: Macroeconomics, 6 (4): 291-323. DOI: 10.1257/mac.6.4.291

Additional Materials

JEL Classification

  • E58 Central Banks and Their Policies
  • E62 Fiscal Policy
  • F34 International Lending and Debt Problems
  • G01 Financial Crises
  • H61 National Budget; Budget Systems
  • H63 National Debt; Debt Management; Sovereign Debt
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