IDEAS home Printed from https://ideas.repec.org/p/bog/wpaper/196.html
   My bibliography  Save this paper

The distributional consequences of the stabilization and adjustment policies in Greece during the crisis, with the use of a multisectoral computable general equilibrium model

Author

Listed:
  • Stavros Zografakis

    (Bank of Greece)

  • Alexandros Sarris

    (Bank of Greece)

Abstract

The paper investigates quantitatively the economic implications of the various stabilization and adjustment policies, adopted by the Greek government in the period 2008-2013, to deal with the unsustainable public finances. To this end a static computable general equilibrium model is presented, that is capable of simulating the main macroeconomic and especially distributional aspects of the Greek crisis that has afflicted the country since 2008. The model is designed to explore in a comparative static manner the outcomes of different policies, and has considerable sectoral and distributional detail. The model is fitted to a 2004 social accounting matrix that includes much detail about the relevant economic actors. Policy simulations are made under a closure rule that seems to fit the Greek economy during the crisis. Simulations of the large shocks that have affected Greece between 2008-2013 indicate that the model reproduces the main outcomes of the economy during the implementation of the policy package adopted during the crisis, and indicates that the package adopted has been very regressive. The policy simulations suggest that the mixture of policies adopted during the stabilization programme by the Greek government has resulted in a large GDP decrease, a large employment decline, and as a painful consequence, a substantial decrease in the public sector deficit, but at the cost of very large decreases in private real incomes and an even larger increase in income inequality. It remains to be seen whether there can be other policy packages that can achieve similar public sector deficit reductions without the adverse income and distributional implications

Suggested Citation

  • Stavros Zografakis & Alexandros Sarris, 2015. "The distributional consequences of the stabilization and adjustment policies in Greece during the crisis, with the use of a multisectoral computable general equilibrium model," Working Papers 196, Bank of Greece.
  • Handle: RePEc:bog:wpaper:196
    as

    Download full text from publisher

    File URL: http://www.bankofgreece.gr/BogEkdoseis/Paper2015196.pdf
    File Function: Full Text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tassos Giannitsis & Stavros Zografakis, 2015. "Greece: Solidarity And Adjustment In Times Of Crisis," IMK Studies 38-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    2. Dimitris Papageorgiou, 2014. "BoGGEM: a dynamic stochastic general equilibrium model for policy simulations," Working Papers 182, Bank of Greece.
    3. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550.
    4. repec:bla:revinw:v:23:y:1977:i:4:p:339-64 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Shu-Ling, 2021. "Fiscal stimulus in a high-debt economy? A DSGE analysis," Economic Modelling, Elsevier, vol. 98(C), pages 118-135.
    2. Marc Vielle & Alain L. Bernard, 1998. "Un exemple d'utilisation : le coût de politiques de réduction des gaz à effet de serre," Économie et Prévision, Programme National Persée, vol. 136(5), pages 33-48.
    3. Haider A. Khan, 2007. "Social Accounting Matrix: A Very Short Introduction for Economic Modeling," CIRJE F-Series CIRJE-F-477, CIRJE, Faculty of Economics, University of Tokyo.
    4. Ginters Bušs & Patrick Grüning, 2023. "Fiscal DSGE model for Latvia," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 23(1), pages 2173915-217.
    5. Onil Banerjee & Martin Cicowiez & Marcia Macedo & Žiga Malek & Peter Verburg & Sean Goodwin & Renato Vargas & Ludmila Rattis & Paulo M. Brando & Michael T. Coe & Christopher Neill & Octavio Damiani, 2020. "An Amazon Tipping Point: The Economic and Environmental Fallout," CEDLAS, Working Papers 0292, CEDLAS, Universidad Nacional de La Plata.
    6. Micha Gisser & Raymond Sauer, 2000. "The Aggregate Relation between Profits and Concentration is Consistent with Cournot Behavior," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(3), pages 229-246, May.
    7. Bjarne S. Jensen, 2004. "Pareto Efficiency, Relative Prices, and Solutions to CGE Models," DEGIT Conference Papers c009_006, DEGIT, Dynamics, Economic Growth, and International Trade.
    8. Karim, Mohamed, 2013. "Taxation of agricultural sector in Morocco. An Analysis using a Dynamic Computable General Equilibrium Model," MPRA Paper 45622, University Library of Munich, Germany.
    9. Govinda R. Timilsina & Ram M. Shrestha, 2002. "General equilibrium analysis of economic and environmental effects of carbon tax in a developing country: case of Thailand," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(3), pages 179-211, September.
    10. Haqiqi , Iman & Bahalou Horeh , Marziyeh, 2013. "Macroeconomic Impacts of Export Barriers in a Dynamic CGE Model," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 8(3), pages 117-150, July.
    11. Labandeira, Xavier & Labeaga, José M. & Rodríguez, Miguel, 2009. "An integrated economic and distributional analysis of energy policies," Energy Policy, Elsevier, vol. 37(12), pages 5776-5786, December.
    12. Hertel, Thomas & Zhai, Fan, 2006. "Labor market distortions, rural-urban inequality and the opening of China's economy," Economic Modelling, Elsevier, vol. 23(1), pages 76-109, January.
    13. Travis Warziniack & David Finnoff & Jonathan Bossenbroek & Jason Shogren & David Lodge, 2011. "Stepping Stones for Biological Invasion: A Bioeconomic Model of Transferable Risk," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(4), pages 605-627, December.
    14. Dellas, Harris & Malliaropulos, Dimitris & Papageorgiou, Dimitris & Vourvachaki, Evangelia, 2024. "Fiscal policy with an informal sector," Journal of Economic Dynamics and Control, Elsevier, vol. 160(C).
    15. Dimitris Papageorgiou & Evangelia Vourvachaki, 2015. "The Macroeconomic Impact of Structural Reforms in Product and Labour Markets: Trade-Offs and Complementarities," Working Papers 197, Bank of Greece.
    16. AFM Mohiuddin & Ryuta Ray Kato, 2009. "Trade Liberalization of the Fishery Industry of Japan," Working Papers EMS_2009_10, Research Institute, International University of Japan.
    17. Aguiar, Angel & Corong, Erwin & van der Mensbrugghe, Dominique, 2020. "The GTAP Recursive Dynamic (GTAP-RD) Model: Version 1.0," Conference papers 333133, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. C M Dufournaud & J T Quinn & J J Harrington, 1994. "A Partial Equilibrium Analysis of the Impact of Introducing More-Efficient Wood-Burning Stoves into Households in the Sahelian Region," Environment and Planning A, , vol. 26(3), pages 407-414, March.
    19. Kiuila, O. & Rutherford, T.F., 2013. "Piecewise smooth approximation of bottom–up abatement cost curves," Energy Economics, Elsevier, vol. 40(C), pages 734-742.
    20. Júlio Vicente Cateia & Maurício Vaz Lobo Bittencourt & Terciane Sabadini Carvalho & Luc Savard, 2023. "Funding schemes for infrastructure investment and poverty alleviation in Africa: Evidence from Guinea‐Bissau," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1505-1529, August.

    More about this item

    Keywords

    Greek economy; macrosectoral models; stabilization policies; distributional implications of macro policies; computable general equilibrium models;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bog:wpaper:196. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anastasios Rizos (email available below). General contact details of provider: https://edirc.repec.org/data/boggvgr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.