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Greece in Recession: Economic predictions, mispredictions and policy implications

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  • Athanassios Petralias
  • Sotirios Petros
  • Pródromos Prodromídis

Abstract

We look into the available macroeconomic figures and the predictions made about the recession in Greece by international organizations, Greek research centers, and the Greek government; and suggest that the predictions regarding the decline in real GDP in recent years were overly optimistic. The same entities predict that real GDP will fall by 4.2-4.6% during 2013. However, by our calculations, the drop may be steeper than the one predicted, even if some of the assumptions made by these institutes or the government materialize. We hope the steps taken will disprove the accuracy of our prediction. To that end we provide some policy recommendations.

Suggested Citation

  • Athanassios Petralias & Sotirios Petros & Pródromos Prodromídis, 2013. "Greece in Recession: Economic predictions, mispredictions and policy implications," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 75, Hellenic Observatory, LSE.
    • Handle: RePEc:hel:greese:75
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    Cited by:

    1. Manussos Marangudakis & Kostas Rontos & Maria Xenitidou, 2013. "State Crisis and Civil Consciousness in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 77, Hellenic Observatory, LSE.
    2. Athanasia Chalari & Clive Sealey & Mike Webb, 2016. "A Comparison of Subjective Experiences and Responses to Austerity of UK and Greek Youth," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 102, Hellenic Observatory, LSE.
    3. Jordaan, Jacob A. & Monastiriotis, Vassilis, 2016. "The domestic productivity effects of FDI in Greece: loca(lisa)tion matters!," LSE Research Online Documents on Economics 68816, London School of Economics and Political Science, LSE Library.
    4. Stavros B. Thomadakis, 2015. "Growth, Debt and Sovereignty: Prolegomena to the Greek Crisis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 91, Hellenic Observatory, LSE.
    5. Yannis Tsirbas & Dimitri Sotiropoulos, 2015. "What Greek political elites think about Europe and the crisis? An exploratory analysis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 93, Hellenic Observatory, LSE.
    6. Nicholas APERGIS & Arusha COORAY, 2013. "New Evidence on the Remedies of the Greek Sovereign Debt Problem," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 79, Hellenic Observatory, LSE.
    7. Nick Papandreou, 2014. "Life in the First Person and the Art of Political Storytelling:The Rhetoric of Andreas Papandreou," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 85, Hellenic Observatory, LSE.
    8. Platon Monokroussos & Dimitrios Thomakos & Thomas A. Alexopoulos & Eleni Lydia Tsioli, 2017. "The Determinants of Loan Loss Provisions: An Analysis of the Greek Banking System in Light of the Sovereign Debt Crisis," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Platon Monokroussos & Christos Gortsos (ed.), Non-Performing Loans and Resolving Private Sector Insolvency, chapter 9, pages 181-225, Palgrave Macmillan.
    9. Vassilis Monastiriotis & Angelo Martelli, 2013. "Beyond Rising Unemployment: Unemployment Risk, Crisis and Regional Adjustments in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 80, Hellenic Observatory, LSE.
    10. Rosa VAsilaki, 2016. "Policing the crisis in Greece: The others' side of the story," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 98, Hellenic Observatory, LSE.
    11. Chalari, Athanasia & Sealey, Clive & Webb, Mike, 2016. "A comparison of subjective experiencesand responses to austerity of UK andGreek youth," LSE Research Online Documents on Economics 68585, London School of Economics and Political Science, LSE Library.
    12. Kougias, Konstantinos, 2017. "‘Real’ flexicurity worlds in action: evidence from Denmark and Greece," LSE Research Online Documents on Economics 69576, London School of Economics and Political Science, LSE Library.
    13. George PETRAKOS, 2014. "Economic Crisis In Greece. European And Domestic Market And Policy Failures," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 39, pages 9-33.
    14. Prodromos Vlamis, 2013. "Greek Fiscal Crisis and Repercussions for the Property Market," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 76, Hellenic Observatory, LSE.
    15. Christodoulakis, Nicos, 2014. "The conflict trap in the Greek Civil War 1946-1949: an economic approach," LSE Research Online Documents on Economics 56228, London School of Economics and Political Science, LSE Library.
    16. Konstantinos Kougias, 2017. "‘Real’ Flexicurity Worlds in action: Evidence from Denmark and Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 106, Hellenic Observatory, LSE.
    17. Stavros Thomadakis, Dimitrios Gounopoulos, Christos Nounis and Michalis Riginos, 2014. "Financial Innovation and Growth: Listings and IPOs from 1880 to World War II in the Athens Stock Exchange," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 86, Hellenic Observatory, LSE.
    18. Vassilis Arapoglou, Kostas Gounis, 2015. "Poverty and Homelessness in Athens: Governance and the Rise of an Emergency Model of Social Crisis Management," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 90, Hellenic Observatory, LSE.

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    More about this item

    Keywords

    recession; forecast errors; GDP; Greece;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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