The Impact of the Lockdown on the Greek Economy and the Role of the Recovery Fund:

George Economides; Apostolis Philippopoulos; Vanghelis Vassilatos

doi:10.1515/bejm-2020-0267

Published by De Gruyter August 2, 2021

The Impact of the Lockdown on the Greek Economy and the Role of the Recovery Fund

George Economides , Apostolis Philippopoulos and Vanghelis Vassilatos

From the journal The B.E. Journal of Macroeconomics

https://doi.org/10.1515/bejm-2020-0267

Showing a limited preview of this publication:

Abstract

We develop a microfounded macroeconomic model that embeds the key features of the Greek economy. After calibrating the model to Greek data over 1995–2019, we assume that the economy is initially in the year 2019 and then quantify the adverse economic impact of the lockdown measures taken to control the spread of the pandemic, as well as the implications of the various policy measures (at national and EU level) taken to cushion the impact of the economic hit. We give quantitative answers to questions like: What will be the size and duration of the economic downturn? What are the implications of the national fiscal stimulus? What will be the role of the fiscal transfers coming from the European Recovery Fund? Our results imply that the national fiscal stimulus package adopted so far is helpful but, for the Greek economy to enter an era of sustainable growth, a mix of policies is also needed that combines: (i) a growth-enhancing fiscal mix (ii) product market deregulation (iii) a socially productive use of the resources coming from the Recovery Fund.

Keywords: COVID-19; growth; macroeconomic policy

JEL Classification: O4; H6; E02

Corresponding author: Apostolis Philippopoulos, Athens University of Economics and Business, Athens, Greece; and CESifo, Munich, Germany, E-mail: aphil@aueb.gr

Acknowledgements

We are grateful to the editor and two anonymous referees for constructive criticisms and suggestions. We have benefited from discussions and joint work with K. Angelopoulos, T. Christou, V. Dimakopoulou and P. Kammas. G. Economides and A. Philippopoulos are grateful to the Hellenic Observatory of the LSE for financial support of a project on Economic growth in Greece: Barriers and prospects to which this paper belongs (we specifically acknowledge the support of The A. C. Laskaridis Charitable Foundation (ACLCF), Dr Vassili G. Apostolopoulos and the LSE). Any views and errors are our own.

Appendix A: Macroeconomic System

Collecting all equations, the system that we solve numerically consists of the following equations:

A.1 Households (the Three Types)

(S1) c k , t = ( c k , t h ) ν ( c k , t f ) 1 − ν ν ν ( 1 − ν ) 1 − ν

(S2) μ 2 ( 1 − l k , t − s k , t ) = μ 1 ( 1 − τ t y ) w t k Φ t l ( 1 + τ t c ) Φ t c c k , t

(S3) μ 2 ( 1 − l k , t − s k , t ) = μ 1 ( 1 + τ t c ) Φ t c c k , t × γ Γ k ( s k , t ) γ − 1 ( 1 − PR t ) p t h p t n h Φ t h y i , t h n k Γ k ( s k , t ) γ + n w Γ w ( s w , t ) γ + n b Γ b ( s b , t ) γ

(S4) ( 1 + τ t + 1 c ) Φ t + 1 c c k , t + 1 ( 1 + τ t c ) Φ t c c k , t = β ( 1 + i t + 1 b ) p t p t + 1

(S5) ( 1 + τ t + 1 c ) Φ t + 1 c c k , t + 1 ( 1 + τ t c ) Φ t c c k , t e t p t * p t = ( 1 + τ t + 1 c ) Φ t + 1 c c k , t + 1 ( 1 + τ t c ) Φ t c c k , t e t p t * p t × ψ p e t p t * p t n t k f k , t + λ t g d t p t h p t n h Φ t h y i , t h − f ̄ + β e t + 1 p t + 1 * p t + 1 ( 1 + i t + 1 * ) p t * p t + 1 *

(S6) c k , t h c k , t f = ν ( 1 − ν ) p t f p t h

(S7) c w , t = ( c w , t h ) ν ( c w , t f ) 1 − ν ν ν ( 1 − ν ) 1 − ν

(S8) ( 1 + τ t c ) p t h p t c w , t h + p t f p t c w , t f Φ t c = ( 1 − τ t y ) w t w Φ t l l w , t + g ̄ t t r + Γ w ( s w , t ) γ ( 1 − PR t ) p t h p t n h Φ t h y i , t h n k Γ k ( s k , t ) γ + n w Γ w ( s w , t ) γ + n b Γ b ( s b , t ) γ

(S9) μ 2 ( 1 − l w , t − s w , t ) = μ 1 ( 1 − τ t y ) w t w Φ t l ( 1 + τ t c ) Φ t c c w , t

(S10) μ 2 ( 1 − l w , t − s w , t ) = μ 1 ( 1 + τ t c ) Φ t c c w , t × γ Γ w ( s w , t ) γ − 1 ( 1 − PR t ) p t h p t n h Φ t h y i , t h n k Γ k ( s k , t ) γ + n w Γ w ( s w , t ) γ + n b Γ b ( s b , t ) γ

(S11) c w , t h c w , t f = ν ( 1 − ν ) p t f p t h

(S12) c b , t = ( c b , t h ) ν ( c b , t f ) 1 − ν ν ν ( 1 − ν ) 1 − ν

(S13) ( 1 + τ t c ) p t h p t c b , t h + p t f p t c b , t f Φ t c = ( 1 − τ t y ) w t b Φ t l l b , t + g ̄ t t r + Γ b ( s b , t ) γ ( 1 − PR t ) p t h p t n h Φ t h y i , t h n k Γ k ( s k , t ) γ + n w Γ w ( s w , t ) γ + n b Γ b ( s b , t ) γ

(S14) μ 2 ( 1 − l b , t − s b , t ) = μ 1 ( 1 − τ t y ) w t b Φ t l ( 1 + τ t c ) Φ t c c b , t

(S15) μ 2 ( 1 − l b , t − s b , t ) = μ 1 ( 1 + τ t c ) Φ t c c b , t × γ Γ b ( s b , t ) γ − 1 ( 1 − PR t ) p t h p t n h Φ t h y i , t h n k Γ k ( s k , t ) γ + n w Γ w ( s w , t ) γ + n b Γ b ( s b , t ) γ

(S16) c b , t h c b , t f = ν ( 1 − ν ) p t f p t h

A.2 Price Indexes

(S17) p t = ( p t h ) ν ( p t f ) 1 − ν

(S18) p t f ≡ e t p t h *

A.3 Private Firms in a Symmetric Equilibrium

(S19) y i , t h = A p n g y g , t g n h σ χ p ( k i , t − 1 ) o p + ( 1 − χ p ) ( m i , t f ) o p α o p × A k l i , t k + A w l i , t w 1 − α 1 − σ

(S20) w t k = PR t θ t p t h Φ t h p t ( 1 − σ ) ( 1 − α ) A k y i , t h ( A k l i , t k + A w l i , t w )

(S21) w t w = PR t θ t p t h Φ t h p t ( 1 − σ ) ( 1 − α ) A w y i , t h ( A k l i , t k + A w l i , t w )

(S22) p t h p t 1 + ξ k k i , t k i , t − 1 − 1 = β i , t p t + 1 h p t + 1 1 − δ + ( 1 − τ t + 1 π ) PR t + 1 θ t + 1 Φ t + 1 h r t + 1 k − ξ k 2 k i , t + 1 k i , t − 1 2 + ξ k k i , t + 1 k i , t − 1 k i , t + 1 k i , t

(S23) p t f p t = PR t θ t p t h Φ t h p t ( 1 − σ ) α y i , t h ( 1 − χ p ) ( m i , t f ) o p − 1 χ p ( k i , t − 1 ) o p + ( 1 − χ p ) ( m i , t f ) o p

(S24) k i , t = ( 1 − δ ) k i , t − 1 + x i , t

(S25) π i , t ≡ ( 1 − τ t π ) PR t p t h Φ t h p t y i , t h − w t k l i , t k − w t w l i , t w − p t f p t m i , t f − p t h p t k i , t − ( 1 − δ ) k i , t − 1 − p t h p t ξ k 2 k i , t k i , t − 1 − 1 2 k i , t − 1

where r t + 1 k ≡ ∂ y i , t + 1 h ∂ k i , t = ( 1 − σ ) α y i , t + 1 h χ p ( k k , t ) o p − 1 χ p ( k i , t ) o p + ( 1 − χ p ) ( m i , t + 1 f ) o p , β i , t ≡ β ( 1 + τ t c ) Φ t c c k , t ( 1 + τ t + 1 c ) Φ t + 1 c c k , t + 1 and β i , t + 1 ≡ ( β ) 2 ( 1 + τ t + 1 c ) Φ t + 1 c c k , t + 1 ( 1 + τ t + 2 c ) Φ t + 2 c c k , t + 2 .

A.4 State Firms

(S26) y g , t g = A g χ g ( k g , t − 1 g ) o g + ( 1 − χ g ) ( m g , t g ) o g θ 1 o g ( l g , t ) θ 2 g g , t g 1 − θ 1 − θ 2

(S27) k g , t g = ( 1 − δ g ) k g , t − 1 g + g g , t i

A.5 Government Budget Constraint

(S28) g ̄ t t r + n g w t b l g , t g + p t h p t g g , t g + g g , t i + p t f p t m g , t g + ψ g 2 e t p t * p t n k f k , t + λ t g d t p t h p t n h Φ t h y i , t h − f ̄ 2 p t h p t n h Φ t h y i , t h + ( 1 + i t b ) p t − 1 p t λ t − 1 d d t − 1 + ( 1 + i t b ) p t − 1 * p t * e t p t * p t p t − 1 e t − 1 p t − 1 * λ t − 1 g d t − 1 + ( 1 + i * ) p t − 1 * p t * e t p t * p t p t − 1 e t − 1 p t − 1 * λ t − 1 e u d t − 1 ≡ d t + T t N

where we use n k b k , t = b t d = λ t d d t = ( 1 − λ t g − λ t e u ) d t at each t.

A.6 Gross Domestic Product (GDP) Identity

n k Φ t c c k , t h + n w Φ t c c w , t h + n b Φ t c c b , t h + n h x k , t + n g ( g g , t g + g g , t i ) + c t f *

(S29) + n h ξ k 2 k i , t k i , t − 1 − 1 2 k i , t − 1 = n h Φ t h y i , t h

where c t f * is exports to the rest of the world (defined below).

A.7 Balance of Payments (Economy’s Resource Constraint)

(S30) p t f p t n k Φ t c c k , t f + n w Φ t c c w , t f + n b Φ t c c b , t f + n h m i , t f + n g m g , t g − p t h p t c t f * + ( 1 + i t * ) p t − 1 * p t * e t p t * p t n k f k , t − 1 + ( 1 + i t b ) p t − 1 * p t * e t p t * p t p t − 1 e t − 1 p t − 1 * λ t − 1 g d t − 1 + ( 1 + i * ) p t − 1 * p t * e t p t * p t × p t − 1 e t − 1 p t − 1 * λ t − 1 e u d t − 1 + ψ p 2 e t p t * p t n k f k , t + λ t g d t p t h p t n h Φ t h y i , t h − f ̄ 2 p t h p t n h Φ t h y i , t h + ψ g 2 e t p t * p t n k f k , t + λ t g d t p t h p t n h Φ t h y i , t h − f ̄ 2 p t h p t n h Φ t h y i , t h = e t p t * p t n k f k , t + λ t g d t + λ t e u d t

A.8 Tax Revenues

(S31) T t N ≡ τ t c n k Φ t c p t h p t c k , t h + p t f p t c k , t f + n w Φ t c p t h p t c w , t h + p t f p t c w , t f + n b Φ t c p t h p t c b , t h + p t f p t c b , t f + τ t y [ n k w t k Φ t l l k , t + n w w t w Φ t l l w , t + n b w t b Φ t l l b , t ] + τ t π n h PR t p t h p t Φ t h y i , t h − w t k l i , t k − w t w l i , t w − p t f p t m i , t f

A.9 Exports

(S32) c t f * = p t h p t f − ϑ

A.10 Fiscal Variables

(S33) w t b = s t w p t h p t n h Φ t h y i , t h n g l g , t

(S34) g g , t g = s t g n h Φ t h y i , t h n g

(S35) g g , t i = s t i n h Φ t h y i , t h n g

(S36) g ̄ t t r = s t t r p t h p t n h Φ t h y i , t h

(S37) m g , t g = p t h p t f s t m n h Φ t h y i , t h n g

(S38) T r t e u = s e u , t t r p t h p t n h Φ t h y i , t h

A.11 Country’s Interest Rate

(S39) i t * = i * + ψ i exp d t p t h p t n h Φ t h y i , t h − d ̄ − 1

A.12 Market-Clearing Conditions in Labor and Dividend Markets

(S40) N t k Φ t l l k , t = N h l i , t k

(S41) N w Φ t l l k , t = N h l i , t w

(S42) N b Φ t l l b , t = N g l g , t

(S43) N k π k , t = N h π i , t

A.13 Endogenous and Exogenous Variables

We therefore have a dynamic system of 43 equations, (S1)–(S43), in 43 variables. The latter are the paths of c k , t , c k , t h , c k , t f t = 0 ∞ , c w , t , c w , t h , c w , t f t = 0 ∞ , c b , t , c b , t h , c b , t f t = 0 ∞ , l k , t , l w , t , l b , t t = 0 ∞ , s k , t , s w , t , s b t t = 0 ∞ , f k , t , π k , t t = 0 ∞ , y i , t h , l i , t k , l i , t w , k _i,t, x _i,t, m i , t f , π _i,t, w t k , w t w t = 0 ∞ , y g , t g , l _g,t, k g , t g t = 0 ∞ , p t , p t h , p t f , i t b , i t * t = 0 ∞ , w t b , g g , t g , g g , t i , g ̄ t t r , m g , t g t = 0 ∞ , { T t N } t = 0 ∞ , { c t f * } t = 0 ∞ and { d t } t = 0 ∞ and { T r t e u } t = 0 ∞ . This is given the paths of fiscal instruments, τ t c , τ t y , τ t π , s t w , s t g , s t i , s t t r , s t m , s e u , t t r t = 0 ∞ , the fractions of public debt held by private agents abroad and EU institutions, λ t g , λ t e u t = 0 ∞ , the population shares, n k , n ^w, n ^b, n ^h, n g t = 0 ∞ , the degree of property rights, { P R t } t = 0 ∞ , foreign prices p t h * , p t f * , p t * t = 0 ∞ , the nominal exchange rate, { e t } t = 0 ∞ , the degree of substitutability between intermediate goods, θ t t = 0 ∞ , and the pandemic shocks, Φ t l , Φ t c , Φ t h t = 0 ∞ .

A.14 Transformed Variables

For convenience, we re-express some variables. We define p t f p t h ≡ TT t to be the terms of trade (an increase means an improvement in competitiveness vis-à-vis the rest of the world). Then, we have p t h p t = ( TT t ) ν − 1 , p t f p t = ( TT t ) ν , e t p t * p t = ( TT t ) 2 ν − 1 , Π t ≡ p t p t − 1 = Π t h TT t TT t − 1 1 − ν and TT t TT t − 1 = e t e t − 1 Π t h * Π t h , where Π t h ≡ p t h p t − 1 h . Also, e t e t − 1 is the gross rate of exchange rate depreciation which is set at one in a currency union. Hence, in the final system, we have Π t = Π t h TT t TT t − 1 1 − ν and TT t TT t − 1 = e t e t − 1 Π t h * Π t h and, in all other equations, we use the transformations p t h p t = ( TT t ) ν − 1 , p t f p t = ( TT t ) ν , e t p t * p t = ( TT t ) 2 ν − 1 . In other words, regarding prices, instead of p t , p t h , p t f t = 0 ∞ , now the endogenous variables are TT t , Π t h , Π t t = 0 ∞ . Recall that, in a small open economy, Π t h * ≡ p t h * p t − 1 h * is exogenous (we set it at 1 all the time), while Π t * ≡ p t * p t − 1 * can also be treated for simplicity as exogenous (we set it at 1 all the time) or, more generally, if we use p t * = ( p t h * ) ν ( p t f * ) 1 − ν , it can be written as Π t * ≡ p t * p t − 1 * = ( Π t h * ) ν Π t h 1 − ν (where we have set e t e t − 1 = 1 ); in our solutions, we simply set Π t * ≡ p t * p t − 1 * = 1 all the time.

Appendix B: Measure of Welfare Comparisons

Say there are two regimes, the pre-COVID and the COVID one, denoted respectively by superscripts P and C. Then, we solve for a consumption subsidy, ξ, which (as in the literature) remains constant over time and (for simplicity) is common across households, such that the households are indifferent between the two regimes. In other words, ξ solves (recall that public good provision is common across households):

(B1) ∑ t = 0 T β t n k [ μ 1 log c k , t P + μ 2 log u k , t P ] + n w [ μ 1 log c w , t P + μ 2 log u w , t P ] + n b [ μ 1 log c b , t P + μ 2 log u b , t P ] + μ 3 log ⁡ y ̄ t P = ∑ t = 0 T β t n k [ μ 1 log c k , t C 1 + ξ + μ 2 log u k , t C ] + n w [ μ 1 log c w , t C 1 + ξ + μ 2 log u w , t C ] + n b [ μ 1 log c b , t C 1 + ξ + μ 2 log u b , t C ] + μ 3 log ⁡ y ̄ t C

In our solutions, we work with T = 6. Also, for the pre-COVID regime, we use the values of the year 2019 repeatedly for all 6 periods, while, for the COVID period, we use the simulated time paths under scenario S0, S1 and S2.

Appendix C: Adding Firm Entry and (De)regulation Product Market Policy

Let us define two new variables, N t p h and Ξ_t. The former is the number of producing firms which are a fraction of the potential number of firms, N ^h, that is, 0 < n t p h ≡ N t p h N h ≤ 1 , whereas the latter refers to new entrants as a fraction of the remaining firms, N h − N t − 1 p h , that is, N t e ≡ Ξ t ( N h − N t − 1 p h ) is the number of new entrants at t. For a new firm to enter the market, it has to pay an entry cost denoted as F _t, which is a policy instrument.

Both n t p h and Ξ_t are determined endogenously. To do so, we follow the relevant literature (Ghironi and Melitz (2005), Bilbiie et al. (2008, 2012, Etro and Colciago (2010), Cavallari (2013), etc.) and add two new equations:

(C1) n t p h = ( 1 − Ω ) [ n t − 1 p f + Ξ t ( 1 − n t − 1 p h ) ]

(C2) V t = ( 1 − Ω ) π i , t + β i , t V t + 1

where the parameter 0 ≤ Ω < 1 is the exogenous death rate, V _t denotes the value of the firm (this is the present discounted value of the firm’s profits starting from the current period onwards) and β i , t ≡ β ( 1 − Ω ) ( 1 + τ t c ) c k , t ( 1 + τ t + 1 c ) c k , t + 1 is the discount factor adjusted by the death rate. Notice that the profit is net of the entry cost paid by new entrants (see below).

The above equations are consistent with the following sequence of events: At the start of the period, new entrants, N t e ≡ Ξ t ( N h − N t − 1 p h ) , pay the entry cost, F _t (in equilibrium, we set V _t equal to the exogenously set F _t). At this stage, the number of potential firms is N t − 1 p h + Ξ t ( N h − N t − 1 p h ) . In turn, a fraction, Ω, of these potential firms die so that the active firms are N t p h = ( 1 − Ω ) [ N t − 1 p h + Ξ t ( N h − N t − 1 p h ) ] , or, equivalently, dividing by the constant pool N ^h, n t p h = ( 1 − Ω ) [ n t − 1 p h + Ξ t ( 1 − n t − 1 p h ) ] . Finally, production, etc., take place. Notice that here we assume that entrants pay the entry cost before the death shock is realized and before production takes place and profits are known. This explains the specification above, namely, V _t = (1 −Ω)π _i,t + β _i,t V _t+1.

The firm’s profit (which is net of the entry cost, F _t, paid by the new entrants and which is expressed in domestic prices) changes to:

(C3) π i , t ≡ ( 1 − τ t π ) PR t p i , t h p t y i , t h − w t w l i , t w − w t k l i , t k − p t f p t m i , t f − p t h p t k i , t − ( 1 − δ ) k i , t − 1 − p t h p t ξ k 2 k i , t k i , t − 1 − 1 2 k i , t − 1 − p t h p t Ξ t ( 1 − n t − 1 p h ) n t p h F t

whereas the GDP identity changes to:

(C4) n k c k , t h + n w c w , t h + n b c b , t h + n t p h n h x k , t + n g ( g g , t g + g g , t i ) + c t f * + n t p h n h ξ k 2 k i , t k i , t − 1 − 1 2 k i , t − 1 + n t p h n h Ξ t ( 1 − n t − 1 p h ) n t p h F t = Φ t h n t p h n h y i , t h

namely, the entry cost is assumed to take the form of a resource cost (we have also experimented with the case in which the entry cost plays a distributive role in the sense that it becomes a revenue for the government (licences, etc.); the main results are not affected).

We therefore have a dynamic system of 45 equations, (S1)–(S24), (S26)–(S28), (S30)–(S43), plus (C1)–(C4), in 45 variables. The latter are c k , t , c k , t h , c k , t f t = 0 ∞ , c w , t , c w , t h , c w , t f t = 0 ∞ , c b , t , c b , t h , c b , t f t = 0 ∞ , l k , t , l w , t , l b , t t = 0 ∞ , s k , t , s _w,t, s b t t = 0 ∞ , f k , t , π k , t t = 0 ∞ , y i , t h , l i , t k , l i , t w , k _i,t, x _i,t, m i , t f , π _i,t, w t k , w t w , Ξ_t, n t p h t = 0 ∞ , y g , t g , l _g,t, k g , t g t = 0 ∞ , p t , p t h , p t f , i t b , i t * t = 0 ∞ , w t b , g g , t g , g g , t i , g ̄ t t r , m g , t g t = 0 ∞ , T t N t = 0 ∞ , c t f * t = 0 ∞ and d t t = 0 ∞ and { T r t e u } t = 0 ∞ . This is given the paths of fiscal instruments, τ t c , τ t y , τ t π , s t w , s t g , s t i , s t t r , s t m , s e u , t t r t = 0 ∞ , the fractions of public debt held by private agents abroad and EU institutions, λ t g , λ t e u t = 0 ∞ , the population shares, n k , n ^w, n ^b, n ^h, n g t = 0 ∞ , the degree of property rights, { P R t } t = 0 ∞ , foreign prices p t h * , p t f * , p t * t = 0 ∞ , the nominal exchange rate, { e t } t = 0 ∞ , the degree of substitutability between intermediate goods, θ t t = 0 ∞ , the pandemic shocks, Φ t l , Φ t c , Φ t h t = 0 ∞ , and the entry cost, { F t } t = 0 ∞ . Notice that now, in Eqs. (S1)–(S24), (S26)–(S28) and (S30)–(S43), we replace the exogenous n ^h with the endogenous product n t p h n h .

About new parameter values: The death rate is set at 5%. In the departing solution of the year 2019, the value of the entry cost, F _t, is chosen/calibrated such that the new model’s solution for the fraction of producing firms, n t p h , coincides with the value used in the baseline model of Section 2 (namely, 0.2). The same value is used under S0, S1 and S2. Then, when we move to the reformed economy of S4, the obtained value of F _t (which is treated as a policy instrument) is reduced by 20%. However, we report that our main results do not depend on the values assigned to these parameters.

The path of the number of firms under scenario S0, S1, S2 and S4 is shown in Figure A.1. As can be seen, the implementation of product market reforms, under S4, increases substantially the number of producing firms enhancing product market competition which, in turn, amplifies the multiplier impact of the fiscal stimulus under S2 (see the red dotted line in Figure 4 in the main text).

Figure A.1:

Economic impact of the lockdown under S0, S1, S2 and S4.

(% deviation of the number of private firms from its 2019 value).

References

Acemoglu, D. 2009. Modern Economic Growth. Princeton: Princeton University Press.Search in Google Scholar

Acemoglu, D., and Robinson, A. 2019. “Rents and Economic Development: The Perspective of “Why Nations Fail”.” Public Choice 181: 13–28. https://doi.org/10.1007/s11127-019-00645-z.Search in Google Scholar

Angelopoulos, K., A. Philippopoulos, and V. Vassilatos. 2009. “The Social Cost of Rent Seeking in Europe.” European Journal of Political Economy 25: 280–99. https://doi.org/10.1016/j.ejpoleco.2009.06.001.Search in Google Scholar

Atkeson, A. 2020. “What Will Be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios.” In Working Paper, no 26867. NBER.10.3386/w26867Search in Google Scholar

Auray, S., and A. Eyquem. 2020. “The macroeconomic effects of lockdown policies.” Journal of Public Economics 190: 104260.10.1016/j.jpubeco.2020.104260Search in Google Scholar

Autor, D. 2014. “Skills, Education and the Rise of Earnings Inequality Among the “other 99 Percent”.” Science 344: 843–51. https://doi.org/10.1126/science.1251868.Search in Google Scholar

Baek, C., P. B. McCrory, T. Messer, and P. Mui. 2020. “Unemployment Effects of Stay-At-Home Orders: Evidence from High Frequency Claims Data.” In Working Paper, no 101-20. Institute for Research on Labor and Employment.10.1162/rest_a_00996Search in Google Scholar

Baier, S., and G. Glomm. 2001. “Long-run Growth and Welfare Effects of Public Policies with Distortionary Taxation.” Journal of Economic Dynamics and Control 25: 2007–42. https://doi.org/10.1016/s0165-1889(00)00017-8.Search in Google Scholar

Baker, R. S., N. Bloom, S. J. Davis, and S. J. Terry. 2020a. “COVID-induced Economic Uncertainty.” In Working Paper, no 26983. NBER.10.3386/w26983Search in Google Scholar

Baker, R. S., R. A. Farrokhnia, S. Meyer, M. Pagel, and C. Yannelis. 2020b. “How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic.” In Working Paper, no 26949. NBER.10.3386/w26949Search in Google Scholar

Baldwin, R., and di Mauro, B. W., eds. (2020). The Economics in the Time of Covid-19. London: CEPR.Search in Google Scholar

Baxter, M., and R. King. 1993. “Fiscal Policy in General Equilibrium.” The American Economic Review 83: 315–34.Search in Google Scholar

Besley, T., and T. Persson. 2009. “The Origins of State Capacity: Property Rights, Taxation and Politics.” The American Economic Review 99: 1218–44. https://doi.org/10.1257/aer.99.4.1218.Search in Google Scholar

Besley, T., and M. Ghatak. 2010. “Property Rights and Economic Development.” In Handbook of Development Economics, Vol. 5, edited by D. Rodrik, and M. Rosenzweig. North-Holland: Elsevier.10.1016/B978-0-444-52944-2.00006-9Search in Google Scholar

Bilbiie, F., F. Ghironi, and M. Melitz. 2008. “Monetary Policy and Business Cycles with Endogenous Entry and Product Variety.” In NBER Macroeconomic Annual, edited by D. Acemoglu, K. Rogoff, and M. Woodford, 299–353. Chicago: University of Chicago Press.10.3386/w13199Search in Google Scholar

Bilbiie, F., F. Ghironi, and M. Melitz. 2012. “Endogenous Entry, Product Variety and Business Cycles.” Journal of Political Economy 120: 304–45. https://doi.org/10.1086/665825.Search in Google Scholar

Birch, S. 2020. “Modelling the Economic Impact of COVID-19 Under Different Policy Choices: Mitigation versus Suppression when Time is a Scarce Resource.” SSM - Population Health 12, https://doi.org/10.1016/j.ssmph.2020.100667.10.1016/j.ssmph.2020.100667Search in Google Scholar

Blanchard, O., and F. Giavazzi. 2003. “Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets.” Quarterly Journal of Economics 118: 879–907. https://doi.org/10.1162/00335530360698450.Search in Google Scholar

Cavallari, L. 2013. “A Note on Firm Entry, Markups and the Business Cycle.” Economic Modelling 35: 528–35. https://doi.org/10.1016/j.econmod.2013.07.039.Search in Google Scholar

Christou, T., A. Philippopoulos, and V. Vassilatos. 2020. “Institutions and Macroeconomic Performance: Core vs Periphery Countries in the Eurozone.” In Working Paper, no 09-2020. Department of Economics, Athens University of Economics and Business.10.1093/oep/gpab037Search in Google Scholar

Coibion, O., Y. Gorodnichenko, and M. Weber. 2020. “The Cost of the COVID-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending.” In Working Paper, no 27141. NBER.10.3386/w27141Search in Google Scholar

Dimakopoulou, V., G. Economides, and A. Philippopoulos. 2021. “The Greek Great Depression 2009-2016 and the Role Played by the ECB.” In Political Economy Perspectives on the Greece and the Euro: From Crisis to Recovery, edited by G. Alogoskoufis, and K. Featherstone. London: Hellenic Observatory, London School of Economics.Search in Google Scholar

Dinopoulos, E., S. Kalyvitis, and M. Katsimi. 2020. “Variable Export Price Elasticity, Product Quality, and Credit Constraints: Theory and Evidence from Greek Firms.” Journal of International Money and Finance 104. https://doi.org/10.1016/j.jimonfin.2020.102135.Search in Google Scholar

Dixit, A. 2004. Lawlessness and Economics. Princeton: Princeton University Press.Search in Google Scholar

Drazen, A. 2000. Political Economy in Macroeconomics. Princeton: Princeton University Press.10.1515/9780691188003Search in Google Scholar

Economides, G., S. Kalyvitis, and A. Philippopoulos. 2008. “Does Foreign Aid Distort Incentives and Hurt Growth? Theory and Evidence from 75 Aid-Recipient Countries.” Public Choice 134: 463–88. https://doi.org/10.1007/s11127-007-9239-9.Search in Google Scholar

Economides, G., A. Philippopoulos, and P. Varthalitis. 2016. “Incentives to Work and Performance in the Public Sector.” In Public Sector Economics and the Need for Reforms, edited by A. Philippopoulos. Cambridge: CESifo Seminar Series and MIT Press.10.7551/mitpress/9780262034449.003.0003Search in Google Scholar

Economides, G., D. Papageorgiou, and A. Philippopoulos. 2020. “Austerity, Assistance and Institutions: Lessons from the Greek Sovereign Debt Crisis, Forthcoming in Open Economies Review.” In Working Paper, no 8188. An earlier version of this paper can be found as CESifo.Search in Google Scholar

Eggertsson, G., A. Ferrero, and A. Raffo. 2014. “Can Structural Reforms Help Europe?” Journal of Monetary Economics 61: 2–22. https://doi.org/10.1016/j.jmoneco.2013.11.006.Search in Google Scholar

Eichenbaum, M., S. Rebelo, and M. Trabandt. 2020. The Macroeconomics of Epidemics. Cambridge: NBER Working Paper No. 26882.10.3386/w26882Search in Google Scholar

Esteban, J., and D. Ray. 2011. “Linking Conflict to Inequality and Polarization.” The American Economic Review 101: 1345–74. https://doi.org/10.1257/aer.101.4.1345.Search in Google Scholar

Etro, F., and A. Colciago. 2010. “Endogenous Market Structures and the Business Cycle.” Economic Journal 120: 1201–33. https://doi.org/10.1111/j.1468-0297.2010.02384.x.Search in Google Scholar

European Commission 2020a. Brussels: European Economic Forecast.Search in Google Scholar

European Commission 2020b. “Europe’s Moment: Repair and Prepare for the Next Generation.” In Communication from the Commission, COM(2020)456. Brussels: European Commission.Search in Google Scholar

Fornaro, L., and M. Wolf. 2020. “COVID-19 Coronavirus and Macroeconomic Policy.” In Working Paper, no 1168. Barcelona Graduate School of Economics.Search in Google Scholar

Ghironi, F., and M. Melitz. 2005. “International Trade and Macroeconomic Dynamics with Heterogeneous Firms.” Quarterly Journal of Economics 120: 865–915. https://doi.org/10.1093/qje/120.3.865.Search in Google Scholar

Grossman, H. 2001. “The Creation of Effective Property Rights.” American Economic Review 91: 347–52. https://doi.org/10.1257/aer.91.2.347.Search in Google Scholar

Guerrieri, V., G. Lorenzoni, L. Straub, and I. Werning. 2020. “Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?” In Working Paper, no 26918. NBER.10.3386/w26918Search in Google Scholar

Guntner, J. 2015. “The Federal Funds Rate, Excess Reserves and Unconventional Monetary Policy.” Journal of Economic Dynamics and Control 53 (C): 225–50. https://doi.org/10.1016/j.jedc.2015.02.011.Search in Google Scholar

Hall, E. R., and C. I. Jones. 1999. “Why Do Some Countries Produce So Much More Output Per Worker Than Others?” Quarterly Journal of Economics 114: 83–116. https://doi.org/10.1162/003355399555954.Search in Google Scholar

Hellwig, C., A. Assenza, F. Collard, M. Dupaigue, P. Feve, S. Kankanamge, and N. Werquin. 2020. The Hammer and the Dance: Equilibrium and Optimal Policy during the Pandemic Crisis. Toulouse: Univerity of Toulouse, mimeo.Search in Google Scholar

Hillman, A. 2009. Public Finance and Public Policy, 2nd ed. Cambridge: Cambridge University Press.10.1017/CBO9780511813788Search in Google Scholar

Keogh-Brown, M. R., H. T. Jensen, W. J. Edmunds, and R. D. Smith. 2020. “The Impact of COVID-19, Associated Behaviours and Policies on the UK Economy: A Computable General Equilibrium Model.” SSM - Population Health 12, https://doi.org/10.1016/j.ssmph.2020.100651.Search in Google Scholar

Kollintzas, T., and V. Vassilatos. 2000. “A Small Open Economy Model with Transaction Costs in Foreign Capital.” European Economic Review 44: 1515–41. https://doi.org/10.1016/s0014-2921(98)00087-7.Search in Google Scholar

Kollintzas, T., D. Papageorgiou, E. Tsionas, and V. Vassilatos. 2018. “Market and Political Power Interactions in Greece: an Empirical Investigation.” IZA J. Labor Policy 7: 1–43. https://doi.org/10.1186/s40173-017-0093-1.Search in Google Scholar

Lucas, R. 1990. “Supply-side Economics: An Analytical Review.” Oxford Economic Papers 42: 293–316. https://doi.org/10.1093/oxfordjournals.oep.a041948.Search in Google Scholar

Ludvigson, C. S., S. Ma, and S. Ng. 2020. “COVID-19 and the Macroeconomic Effects of Costly Disasters.” In Working Paper, no 26987. NBER.10.3386/w26987Search in Google Scholar

Masuch, K., R. Anderton, R. Setzer, and N. Benalal. 2018. “Structural Policies in the Euro Area.” In Occasional Paper, no 210. European Central Bank.10.2139/ssrn.3202072Search in Google Scholar

McKibbin, W., and R. Fernando. 2020. “The Global Macroeconomic Impacts of COVID-19: Seven Scenarios.” In Working Paper, no 19/2020. Centre for Applied Macroeconomic Analysis.10.2139/ssrn.3547729Search in Google Scholar

Miao, J. 2014. Economic Dynamics in Discrete Time. Cambridge: MIT Press.Search in Google Scholar

Murphy, K., A. Shleifer, and R. Vishny. 1991. “The Allocation of Talent: Implications for Growth.” Quarterly Journal of Economics 106 (2): 503–30. https://doi.org/10.2307/2937945.Search in Google Scholar

Pestieau, P., and G. Ponthiere. 2020. “Optimal Lockdown and Social Welfare.” In Working Paper, no 8694. CESifo.10.2139/ssrn.3733268Search in Google Scholar

Philippopoulos, A., V. Vassilatos, and P. Varthalitis. 2017. “Fiscal Consolidation and its Cross-Country Effects.” Journal of Economic Dynamics and Control 83: 55–106. https://doi.org/10.1016/j.jedc.2017.07.007.Search in Google Scholar

Ragnitz, J. 2018. “European Cohesion Policies; The Need for Reforms.” CESifo DICE Rep. 16: 48–53.Search in Google Scholar

Ramey, V. 2020. The Macroeconomic Consequences of Infrastructure Investment, Mimeo. San Diego: University of California.10.3386/w27625Search in Google Scholar

Reinhart, M. C., and K. S. Roggof. 2009. “The Aftermath of Financial Crises.” The American Economic Review 99: 466–72. https://doi.org/10.1257/aer.99.2.466.Search in Google Scholar

Schmitt-Grohé, S., and M. Uribe. 2003. “Closing Small Open Economy Models.” Journal of International Economics 61: 163–85. https://doi.org/10.1016/s0022-1996(02)00056-9.Search in Google Scholar

Stokey, N. 1996. “Free Trade, Factor Returns and Factor Accumulation.” Journal of Economic Growth 1 (4): 421–47. https://doi.org/10.1007/BF00150196.Search in Google Scholar

Svensson, J. 2000. “Foreign Aid and Rent-Seeking.” Journal of International Economics 51: 437–61. https://doi.org/10.1016/s0022-1996(99)00014-8.Search in Google Scholar

The Economist. 2021. Down to the Wire (April 3rd, 17–19). London: The Economist Group.Search in Google Scholar

Tullock, G. 1980. “Efficient Rent-Seeking.” In Toward a Theory of the Rent-Seeking Society, edited by J. M. Buchanan, R. D. Tollison, and G. Tullock. College Station: Texas A&M University Press.Search in Google Scholar

Uribe, M., and S. Schmitt-Grohé. 2017. Open Economy Macroeconomics. Princeton: Princeton University Press.Search in Google Scholar

World Economic Outlook. 2020a. A Crisis like No Other: An Uncertain Recovery. Washington: International Monetary Fund.Search in Google Scholar

World Economic Outlook. 2020b. A Long and Difficult Ascent. Washington: International Monetary Fund.Search in Google Scholar

Received: 2020-12-13

Accepted: 2021-07-14

Published Online: 2021-08-02