The twin deficits, monetary instability and debt crises in the history of modern Greece

Hosted by the Hellenic Observatory

CBG.2.05, Centre Building, United Kingdom


Professor George Alogoskoufis

Professor George Alogoskoufis


Professor Kevin Featherstone

Professor Kevin Featherstone

This presentation reviews, analyses and interprets the determinants and the implications of the twin, fiscal and current account, deficits in the history of modern Greece.

The analysis focuses on the determinants and the dynamic interactions among the twin deficits, domestic monetary regimes, and access to international borrowing. Throughout its two-hundred-year history, modern Greece was characterized by prolonged periods of low economic growth, monetary instability and sustained fiscal and external deficits. These often led to high inflation, international over-indebtedness, and sovereign debt crises and defaults. Current account deficits have been a consequence of the shortfall of domestic savings relative to investment. The only exception was during the 1950s and the 1960s. Until the 1950s the main drivers of fiscal deficits have been the occasional military mobilizations and wars because of the pursuit of the grand idea, the two world wars and a civil war. After the late 1970s, the main driver of fiscal deficits has been the attempt to redistribute income and wealth and create a welfare state, in the pursuit of greater equality.

Meet our speaker and chair

George Alogoskoufis is Professor (since 1990) and former Chairman (2020-2022) of the Department of Economics at the Athens University of Economics and Business. Since 2009 he has been a Research Fellow at the Hellenic Observatory of the London School of Economics and Political Science, as well as a Fellow of the European Economic Association. For three academic years between 2016 and 2019 he was Professor in the Konstantinos Karamanlis Chair at the Fletcher School of Tufts University in the USA. From September 1996 to October 2009 he was a member of the Hellenic Parliament, while from March 2004 to January 2009 he was Minister of Economy and Finance. He holds a Ph.D in Economics from LSE (1981) and specialises in macroeconomics and international economics. He has published seven books and over fifty papers in some of the top academic journals in Economics (American Economic Review, The Journal of Political Economy, The Economic Journal, The European Economic Review, The Journal of Monetary Economics, The Journal of Money, Credit and Banking, Economica and others) with many references and citations in the international literature. His most recent book, Dynamic Macroeconomics, a graduate textbook, was published in 2019 by MIT Press.

Kevin Featherstone is the Hellenic Observatory Director and Professorial Research Fellow, LSE.

The Twitter Hashtag for this event is: #LSEGreece


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The Hellenic Observatory (@HO_LSE) is internationally recognised as one of the premier research centres on contemporary Greece and Cyprus. It engages in a range of activities, including developing and supporting academic and policy-related research; organisation of conferences, seminars and workshops; academic exchange through visiting fellowships and internships; as well as teaching at the graduate level through LSE's European Institute.

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