Beyond Austerity
The best book on the actual Greek economy: product markets, courts, firms.
Summary
The reference has not verified this book in detail; the summary states only what the title, author and subject establish.
Meghir, Pissarides, Vayanos and Vettas edited this volume of economic analysis on the Greek crisis and on what reforms would restore growth. The contributors are academic economists, several of them Greek, including Pissarides who holds a Nobel Prize in economics.
The reference has not verified the individual chapters. The volume's organising argument, which distinguishes it from the political accounts of the crisis, is that Greece's problems are structural rather than only fiscal or monetary. The chapters examine product market regulation and the protected professions, labour market institutions and their effect on employment, the tax system and its very low compliance, the judicial system's slowness and its effect on contract enforcement and on non-performing loan resolution, public administration capacity, the pension system, education, the banking sector, and the specific sectors including tourism, shipping and agriculture where Greece has or could have comparative advantage.
The general position across contributions is that austerity was necessary given the fiscal position but was not sufficient and was badly designed, falling on tax increases and wage cuts rather than on the structural reforms that would raise productivity, and that the sequencing was wrong.
The volume is academic economics rather than polemic, and it is written by people who broadly accept the framework that Varoufakis and Stiglitz, also in this reference, attack. Readers wanting the range of positions on the Greek crisis should read across them. Readers should consult the table of contents for the sectors and topics relevant to their purpose.
Key takeaways 7
- Greece's economic problems are structural rather than only fiscal, so fiscal adjustment alone could not restore growth.
- Protected professions and product market regulation raised prices and blocked entry across large parts of the economy.
- Very low tax compliance meant that raising rates fell on the compliant rather than broadening the base.
- Slow judicial processes prevented contract enforcement and blocked the resolution of non-performing loans.
- Austerity was designed around tax increases and wage cuts rather than around the reforms that would raise productivity.
- The sequencing of the adjustment programme made the contraction deeper than a differently ordered programme would have.
- Sectors where Greece has genuine comparative advantage were constrained by the same regulatory and institutional failures as the rest of the economy.
Who should read it
Analysts and investors working on Greece or on structural reform who want academic economic assessment rather than political argument.
Where it sits in the reference 2
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