Monday, March 7, 2016
''Is the Greek Crisis One of Supply or Demand?'' Yannis M. Ioannides, Christopher A. Pissarides
''..The Economic Adjustment Program has been a major “demand” force in the severe contraction since 2009, but there is also a “supply” force. Greece must further improve its competitiveness vis-a-vis its EZ partners, and debt relief in and of itself cannot address the competitiveness problem. That requires a targeted approach that involves structural reforms, especially ones that improve competitiveness in the market for goods and services and have long lasting effects through total factor productivity growth. Reforms are necessary to make Greece more productive, help it attract investment and develop forward-looking export industries. This will inevitably require deep restructuring of the economy, a process that typically follows crises, and is to some extent already under way in Greece..''