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Monetary Union and Inflation: The Greek Experience

Policy Paper by Young Researcher WP II / III Theories: Team 3 (D11b)
May 2007
Taun Nicholaus Toay

Popular opinion in Greece has moved the nation from the strongest supporter of a single currency to one of the nations most opposed to the euro. This paper aims to shed light of such a rapid shift in sentiment and qualify the nearly ubiquitous public view that the euro is responsible for recent strains in the Greek economy. The findings suggest that market rigidities and price abuses by sellers, surrounding conversion, have contributed to asymmetric inflation across incomes. This trend has been buttressed by psychological factors that lay blame on the euro and not the government’s inactivity in combating such trends. The new EU-25 members should consider the findings, both the successes and shortcomings of the Greek experience, at length as they pursue further Europeanisation.
  1. Introduction
  2. Framing the Issues
  3. Historical Framework for Greece’s Adoption of the Euro
  4. The Greek experience under the euro
  5. Troublesome Trends
  6. Policy Prescriptions
  7. Concluding Remarks
  8. APPENDIX - Timeline of major events in Greek economic history
  9. References
Download ›/library/deliverables/D11b_Team 3.pdf