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Greece and the Troika � Lessons from international best practice cases of successful price (and wage) adjustment
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Greece and the Troika � Lessons from international best practice cases of successful price (and wage) adjustment

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  • Belke, Ansgar
  • Gros, Daniel

Abstract

This paper reviews cases of successful price and wage adjustment, which are often regarded as constituting best practice, in Australia, Latvia and the German new states and contrasts them with the Greek experience under the Troika programmes. Latvia stands out as having had the quickest adjustment in wages. By contrast, before the crisis, Greek wages appeared to have been largely insensitive to labour market conditions but this changed with the programme. We find that the reaction of wages to unemployment in Greece under the programme was similar to that observed in Germany and Portugal (a case that has attracted less attention). A priori, it is likely that the change in wage behaviour in Greece was due to the labour market reforms imposed under the programme. But this cannot be proven beyond doubt.

Suggested Citation

  • Belke, Ansgar & Gros, Daniel, 2017. "Greece and the Troika � Lessons from international best practice cases of successful price (and wage) adjustment," CEPS Papers 12557, Centre for European Policy Studies.
    • Handle: RePEc:eps:cepswp:12557
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    References listed on IDEAS

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    Cited by:

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    2. Ansgar Belke, 2020. "Depression and grief as a result of economic and financial crises: the example of Greece and some generalizations," Economic Change and Restructuring, Springer, vol. 53(1), pages 139-149, February.

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