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More Efficient Economic Policies of Disinflation: The Case of Greece

Published online by Cambridge University Press:  17 August 2016

George E. Economou
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Extract

The high inflation rate and the increase in the unemployment rate coupled with very low growth rates, occured as a result of the second oil crisis, was confronted the policy makers of the new administration with a dilemma. They responded with a compromise of different sorts of policies aiming at achieving a gradual reduction of the inflation and unemployment rates so that they are reduced down to equilibrium over a long enough period of time.

However, the monetary and fiscal policies adopted are not considered as a single macroeconomic instrument. The growth of real output is pursued with an expansionary public and fiscal policy, while inflation is confronted with restrained monetary policy against the private sector of the economy. Moreover, the way prices and incomes policy is adopted postpones recovering of output and profits, thus creating serious fears for a further increase of unemployment and a resurgence of inflation.

Type
PART THREE: Specific Issues
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 51 , Issue 3-4 , December 1985 , pp. 363 - 380
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1985 

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Footnotes

(1)

The autor, who is an Associate Professor of Economics at the Dept. of Economics of the University of Athens, expresses his indebtedness to Dr. Erotokritos Varelas, of the Graduate School of Economics and Industrial Studies, who made possible the estimation of this model. Also, thanks are due to the Greek Economic Association which made possible the author’s participation in the Conference of the Confederation of European Economic Associations.

References

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