Market and Political Power Interactions in Greece: An Empirical Investigation

Kollintzas, Tryphon; Papageorgiou, Dimitris; Tsionas, Efthymios G.; Vassilatos, Vanghelis

doi:10.2139/ssrn.2819004

Cited by 7 publications

(10 citation statements)

References 70 publications

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“…7 Kollintzas et al (2018b) present evidence that in South Europe public sector wage are high relative to a representative group of OECD countries and that these premia have a negative effect on growth and the business cycle, that works through total factor productivity.…”

Section: Figure A2mentioning

confidence: 90%

Implications of market and political power interactions for growth and the business cycle

Kollintzas¹,

Papageorgiou²,

Vassilatos³

2021

Working Paper

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In this paper, we develop a two sector DSGE model with market and political power interactions. These interactions are motivated by the politico-economic systems of several South European countries, over the last half century. In these countries the state permits the existence of industries, typically related to the extended public sector, where firms and workers employed therein have market power (insiders), unlike other firms and workers in the economy (outsiders), as insiders, that dominate the major political parties, cooperate to influence government decisions, including those that pertain to the very existence of such a politico-economic system. Consistently with stylized facts of growth and the business cycle of these countries, the model predicts: (i) large negative deviations of per capita GDP from what these countries would have been capable of, if their politico-economic system was not characterized by the above mentioned frictions; and (ii) deeper and longer recessions in response to negative shocks, as their politico-economic system reacts so as to amplify these shocks.

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Section: Figure A2mentioning

confidence: 90%

Implications of market and political power interactions for growth and the business cycle

Kollintzas¹,

Papageorgiou²,

Vassilatos³

2021

Working Paper

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“…Many economists predict that this phenomenon will last for several decades until the country reaches a pace of the gross domestic product growth like before the crisis. The challenge is the labour market, which has to solve long-term unemployment, an increasing number of young people without work, and the growth of people living on the brink of poverty (Kollintzas, Papageorgiou, Tsionas, & Vassilatos, 2016).…”

Section: Economic and Politic Situation In Greecementioning

confidence: 99%

Political-Economic Cycle Models of Economy of Greece

Tkáčová

Gavurová

Kováč

2018

Journal of Business Economics and Management

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The political-economic cycle can be caused as the consequence of the wrong political decisions, made with the aim of re-election and maintaining the political power. These decisions influence the macroeconomic indicators of the country and their presence is problematic in the advanced economies. The main objective of this study is to verify the existence of the political-economic cycle model in the case of Greece and to identify the type of this cycle. The basement is given by the approach of Alesina and Roubini (1992), which observes the relationship between the political dummy variables and the selected macroeconomic variables such as gross domestic product, unemployment rate and inflation rate. The eight linear regression models are developed in the R software environment, while the three of them are opportunistic and the five are ideological. These models are identified as statistically significant and according to the methodology, tested for the presence of serial correlation, heteroscedasticity and residual normality. As the models do not confirm the presence of an opportunistic or ideological political-economic cycle, according to the data, the influence of the political parties on changes in the macroeconomic variables before the election is not proved for the case of Greece.

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“…The most notable line of interpretation provided by mainstream economics is based on the notion of 'rent seeking' (e.g. Mitsopoulos and Pelagidis 2011), and 'insider-outsider society' (Kollintzas et al 2018). Here again, the common denominator regarding the diagnosis of the crisis is the lack of bold neoliberal reforms that could break down the resistance of insiders and eliminate the multiple forms of rent seeking.…”

Section: Introductionmentioning

confidence: 99%

“…Compare with Portugal's 'statist neoliberalism' analysed byEvans, Verga Matos, and Santos (2018).18 The evolution of the public sector wage premium in Greece is perhaps the most favourite theme in the relevant empirical scholarship (e.g. Monastiriotis 2014, 2015;Kollintzas et al 2018). Some non-Greek scholars working within the VoC approach (e.g.…”

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confidence: 99%

On the Edge of the South European Model: Familism, Business and State in Greece

Liagouras¹

2019

Preprint

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This article’s main argument is that what is really in question behind the present Greek economic crisis is the social model prevailing from the creation of the Greek nation-state up to the present day. The pre-modern institutional logic of the Greek social model can be depicted in terms of the notion of familism which points to the centrality of the nuclear-extended family and its friendship networks as the dominant locus of trust and moral duty. It is argued that the notion of familism sheds light on business and state relations in Greece: first on the dominant business models (mainly state-dependent and rent-seeking ‘entrepreneurship’), and on the private sector’s calamitous failure to produce the club goods required to enhance its competitiveness. Unsurprisingly, the neoliberal reforms imposed by ‘Troika’ affected only some symptoms of the familism endemic in Greece. The big question is whether the realisation of a new social contract, combining the positive values of familism with civic culture, is possible in the medium-to-long run.

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Market and Political Power Interactions in Greece: An Empirical Investigation

Cited by 7 publications

References 70 publications

Implications of market and political power interactions for growth and the business cycle

Implications of market and political power interactions for growth and the business cycle

Political-Economic Cycle Models of Economy of Greece

On the Edge of the South European Model: Familism, Business and State in Greece

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