Managing a Greek default
Managing a Greek default
- September 28, 2011
- Research by Stergios Skaperdas, economics professor, is featured in the Council on Foreign Relations September 28, 2011
From the Council on Foreign Relations:
Still, economists are divided over whether Greece would leave the eurozone in the
event of a default. Nouriel Roubini, the chairman of Roubini Global Economics and
a professor at New York University's Stern School of Business, argues that Greece's
debt will remain unsustainably high (FT) if it does not begin to grow again. Since
Greece will be unable to do so under the weight of the strict austerity measures being
mandated by the EU and IMF, Roubini writes, its only option is to leave the eurozone.
He explains, "A return to national currency and a sharp depreciation would quickly
restore competitiveness and growth." Similarly, Stergios Skaperdas, a professor of
economics at the University of California, Irvine, notes in a piece for the Guardian,
"Employment will pick up within a few months after the introduction of the new drachma.
By contrast, unemployment and deprivation with no end in sight are the predictable
results of following the troika's policies."
For the full story, please visit http://www.cfr.org/financial-crises/managing-greek-default/p26060.
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