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The five little PIIGS and the big bad Troika

Author

Listed:
  • Anastasios V. Katos

    (University of Macedonia, Greece)

  • Eleni F. Katsouli

    (University of Macedonia, Greece)

Abstract

The purpose of this paper is to investigate whether efforts to eliminate the budget deficits in Portugal, Ireland, Italy, Greece and Spain, as it has been suggested by Troika (European Commission, International Monetary Fund, and European Central Bank), will delay the economic growth of these countries than enhance it. For this purpose a state-space equation for each country is estimated using maximum likelihood and Kalman filter. The results indicated that policies aiming at increasing labor productivity positively influence economic growth in all countries, whilst policies aiming at reducing public deficits positively influence economic growth in Portugal and Ireland, and negatively influence economic growth in Italy, Greece and Spain.

Suggested Citation

  • Anastasios V. Katos & Eleni F. Katsouli, 2012. "The five little PIIGS and the big bad Troika," Economics Bulletin, AccessEcon, vol. 32(1), pages 1001-1007.
    • Handle: RePEc:ebl:ecbull:eb-11-00786
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    References listed on IDEAS

    as
    1. Gordon,Robert J., 2004. "Productivity Growth, Inflation, and Unemployment," Cambridge Books, Cambridge University Press, number 9780521531429, October.
    2. Philippe Aghion & Ioana Marinescu, 2008. "Cyclical Budgetary Policy and Economic Growth: What Do We Learn from OECD Panel Data?," NBER Chapters, in: NBER Macroeconomics Annual 2007, Volume 22, pages 251-278, National Bureau of Economic Research, Inc.
    3. Gordon,Robert J., 2004. "Productivity Growth, Inflation, and Unemployment," Cambridge Books, Cambridge University Press, number 9780521800082, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. ATHANASENAS Athanasios & POLYCHRONIDOU Persefoni & CHAPSA Xanthippi, 2021. "An Economic Crisis “State of Shock”: An Empirical Analysis of the Greek Economy," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 02, June.
    2. Xanthippi Chapsa & Nikolaos Tabakis & Athanasios L. Athanasenas, 2018. "Investigating the Catching-Up Hypothesis Using Panel Unit Root Tests: Evidence from the PIIGS," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 250-271.

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    More about this item

    Keywords

    Economic growth; Labor productivity; Budget deficit; Troika; Kalman filter; Eurozone;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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