European Economics and Politics in the Midst of the Crisis

Petrakis, Panagiotis E.; Kostis, Pantelis C.; Valsamis, Dionysis G.

doi:10.1007/978-3-642-41344-5

Cited by 17 publications

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“…According to Petrakis, Kostis, and Valsamis ( 2013 ), structural adjustment can occur through changes between internationally tradable goods (merchandise) and internationally non-marketable goods (houses, land). For this reason, structural changes will have to be made despite the structural rigidities observed.…”

Section: Policies For Dynamic Growth and Developmentmentioning

confidence: 99%

“…The implementation of austerity and supply-side policies aims to create a new productive model that will be able to improve the net international investment position (NIIP) 2 of economies. On the contrary, a Keynesian policy of increasing effective demand does not involve this, but the assumption that the previous (consumption) model will continue to function (Petrakis et al, 2013 ).…”

Section: Policies For Dynamic Growth and Developmentmentioning

confidence: 99%

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Policies for Dynamic Economic Growth: Medium- and Long-Term Policies

Petrakis

Kostis

2020

The Political Economy of Greek Growth Up to 2030

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This chapter analyzes some policy areas in which non-fiscal institutional changes will have to be applied in the period 2020–2024. Thus, policies for dynamic growth and development in the Greek economy are initially presented. Then, some non-fiscal institutional structural reforms are presented, where issues related to the promotion of investment and exports and the propulsion of entrepreneurship and innovation are analyzed. Hereupon, the issue of investment in public infrastructure and industrial policies related to competitiveness and sectoral policy are being described. Finally, the chapter presents issues related to the development of the human factor and the workforce with the presentation of actions related to the support of Research and Development (R&D) and the improvement of the quality of higher and continuing education.

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Section: Policies For Dynamic Growth and Developmentmentioning

confidence: 99%

Section: Policies For Dynamic Growth and Developmentmentioning

confidence: 99%

Policies for Dynamic Economic Growth: Medium- and Long-Term Policies

Petrakis

Kostis

2020

The Political Economy of Greek Growth Up to 2030

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“…The education system in Greece has some major problems due to repeated and stereotyped inward behavior (Petrakis, Kostis, & Valsamis, 2013 ). Its main problem is that it is cut off from the labor market.…”

Section: Educationmentioning

confidence: 99%

Inclusivity

Petrakis¹,

Kostis²

2020

The Evolution of the Greek Economy

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Despite the increase in prosperity and wealth for most economies, there have been a number of problems that prevent inclusivity in terms of exploiting opportunities by all. In most developed economies there are issues related to high-income disparities, to reduction of the size of the middle class, to non-equal opportunities between men and women, to access to education, etc. The Covid-19 crisis has intensified several of these trends. This chapter presents issues related to the issue of inclusivity in Greek society, in particular compared to the EU-28 average, which relate to labor market conditions, issues related to income distribution and observed inequalities, the level of poverty, and the quality of education. Lastly, the way the Covid-19 pandemic affects some aspects of inclusivity is presented.

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“…This kind of unwise management has emerged numerous issues, such as the massive debt accumulation in the private and public sectors, which was reflected in the current account and the growth of banking sector (Hale and Obstfeld, 2016). Another arising issue was that much of these flows had not been productively invested, but it was driven to strengthen consumption and construction development (Petrakis et al , 2013). Furthermore, these inflows had been led to increasing wages and higher cost of production, thereby affecting the competitiveness of the peripheral euro area countries, as shown to their current account deficits [International Monetary Fund (IMF) – World Economic Outlook Database, April 2017].…”

Section: Introductionmentioning

confidence: 99%

ECB's unconventional monetary policy and spillover effects between sovereign and bank credit risk

Katsampoxakis

2021

EMJB

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PurposeThe paper examines the impact of the deteriorating fiscal conditions of Eurozone countries on spillover effects on bank credit margins. It is investigated whether these effects have been reduced after European Central Bank’s (ECB) signaling of pursuing an expansionary, unconventional, monetary policy to address the debt crisis in Eurozone.Design/methodology/approachA general econometric panel model is applied to investigate spillover effects between Eurozone countries and bank credit margins. In total, three periods are examined: the period before the peak of the global financial crisis and the beginning of the Irish banking crisis, the period during the debt and bank crisis in Eurozone and the period after ECB's signaling of extremely aggressive monetary easing.FindingsAccording to empirical results, before the peak of the global financial crisis there was no substantial credit risk transfer from Eurozone sovereigns to banks. During the period of debt and bank crisis in Eurozone, the deterioration of the fiscal situation of Eurozone countries had a significant impact on bank Credit Default Swap (CDS) spreads. After ECB's signaling of extremely aggressive monetary easing, it does not seem to be any significant relationship between Eurozone sovereigns and bank CDS spreads. These findings reinforce the assessment that ECB's measures were effective, achieving the key objective of normalizing economic conditions and ensuring financial stability in Eurozone.Research limitations/implicationsA question is whether effects can change when the corresponding contraction will lead to a reinstatement of “normal” conditions. Would there be a reversal of risk premium trends in bond markets? Although the answer from casual observations seems to be negative, it is a valid research question to be examined. An interesting issue concerning the unconventional monetary policy measures implemented by ECB concerns the issues of moral hazard that they incorporate, something that could not be addressed. Another research perspective could be the use of the beta coefficient to measure the systematic and unsystematic risk of banking sector shares.Practical implicationsThe results have strong implications for ECB and European banking regulation. Regulators should mainly pay more attention to the amount and concentration of sovereign debt held by banks. Eurozone financial system could be less vulnerable to the sovereign credit risk. It raised the critical question of whether a more strict regulation is needed. Regulators should not intervene if not necessary, but they must prevent the transmission of crises between markets. This will likely bring trust to the developed countries' sovereign debt and the portfolios of the financial institutions, which hold most of this debt will be considered safe as well.Social implicationsThe conclusions provide a safe counterweight in various respects. First, the negative effects and the need to rapidly cease or limit such policies. Second, the financial stability aimed by ECB. Such policies contain the possibility of a subsequent moral hazard related to Member State and bank behavior. However, these contingencies need to be assessed with the benefits resulting from the restoration of financial markets and the disconnection between banking and sovereign credit risk. This leads Eurozone's financial system to become less vulnerable to the sovereign credit risk and therefore more safe, helping to restore confidence in the real economy.Originality/valueContribution in terms of methodology and conclusions. It offers important conclusions regarding the limitations of yields and volatility of CDS spreads. It examines the spillover effects of the fiscal situation of Eurozone countries on banking institutions by extending the existing methodology and introducing new questions focusing on the reaction of CDS market to the ECB monetary policy, the reduction of risk premiums at sovereign and banking level and the gradual reduction of interdependence between them.

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European Economics and Politics in the Midst of the Crisis

Cited by 17 publications

References 0 publications

Policies for Dynamic Economic Growth: Medium- and Long-Term Policies

Policies for Dynamic Economic Growth: Medium- and Long-Term Policies

Inclusivity

ECB's unconventional monetary policy and spillover effects between sovereign and bank credit risk

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