Advertisement

Fiscal Multipliers Under Extreme Uncertainty: Case of Greek Tourism Economy

  • Georgios AlexopoulosEmail author
  • Alexandros Apostolakis
  • Constantin Zopounidis
  • Alexandros Garefalakis
  • Marianna Eskantar
Conference paper
  • 23 Downloads
Part of the Cooperative Management book series (COMA)

Abstract

This article explores how the impact of the economic strategy on performance can shift depending on whether the economy is in progress or recession. This particular strategy seems to affect the tourism sector especially in the central regions of Greek territory and not in the areas bordering sea tourism destinations. Extensions and bends are characterized by the indication of the performance slit (positive and negative, separately). The choice to use the yield segment as a marginal variable is promoted by a few elements, one of which is that under a negative performance gap, free from the GDP growth rate, abundance limits are predictable for the economy, reducing the decline in private business measures after a stunning administration.

Keywords

GDP growth rate Tourism sector Performance slit Economy strategy 

References

  1. Arghyrou, M. & Kontonikas, A. (2011). The EMU sovereign-debt crisis: Fundamentals, expectations and contagion. European Commission economic paper, no. 436.Google Scholar
  2. Auerbach, A. J., & Gorodnichenko, Y. (2012a). Fiscal multipliers in recession and expansion. American Economic Journal: Economic Policy, 4(2), 1–27.Google Scholar
  3. Auerbach, A. J., & Gorodnichenko, Y. (2012b). Measuring the output responses to fiscal policy. American Economic Journal: Economic Policy, 4, 1–27.Google Scholar
  4. Auerbach, A. J., & Gorodnichenko, Y. (2012c). Fiscal multipliers in recession and expansion. In A. Alesina & F. Giavazzi (Eds.), Fiscal policy after the financial crisis. Chicago, IL: University of Chicago Press.Google Scholar
  5. Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measuring economic policy uncertainty. Quarterly Journal of Economics, 131(4), 1593–1636.CrossRefGoogle Scholar
  6. Barro, R. J. (1981). Output effects of government purchases. Journal of Political Economy, 89(6), 1086–1121.CrossRefGoogle Scholar
  7. Barro, R. J., & Redlick, C. J. (2011). Macroeconomic effects from government purchases and taxes. The Quarterly Journal of Economics, 126(1), 51–102.CrossRefGoogle Scholar
  8. Batini, N., Callegari, G., & Melina, G. (2012). Successful austerity in the United States, Europe and Japan, IMF working paper 12/190. Washington: International Monetary Fund.Google Scholar
  9. Baum, A., & Koester, G. B. (2011). The impact of fiscal policy on economic activity over the business cycle-evidence from a threshold VAR analysis, Bundesbank discussion paper, (03/2011). Frankfurt: Deutsche Bundesbank.Google Scholar
  10. Beetsma, R., Massimo, G., & Klaassen, F. (2008). The effects of public spending shocks on trade balances and budget deficits in the European Union. Journal of the European Economic Association, 6(2–3), 414–423.CrossRefGoogle Scholar
  11. Bernoth, K., & Erdogan, B. (2012). Sovereign bond yield spreads: A time-varying coefficient approach. Journal of International Money and Finance, 31, 639–656.CrossRefGoogle Scholar
  12. Blanchard, O., & Daniel L. (2013). Growth forecast errors and fiscal multipliers. Working paper 18779. Cambridge, MA: National Bureau of Economic Research.Google Scholar
  13. Blanchard, O., & Roberto, P. (2002). An empirical characterization of the dynamic effects of changes in government spending and taxes on output. The Quarterly Journal of Economics, 117(4), 1329–1368.zbMATHCrossRefGoogle Scholar
  14. Bloom, N. (2009). The impact of uncertainty shocks. Econometrica, 77(3), 623–685.MathSciNetzbMATHCrossRefGoogle Scholar
  15. Bloom, N., Floetotto, M., Jaimovich, N., Saporta-Eksten, I., & Terry, S. J. (2018). Really uncertain business cycles. Econometrica, 86(3), 1031–1065.MathSciNetzbMATHCrossRefGoogle Scholar
  16. Chahrour, R., Schmitt-Grohe, S., & Uribe, M. (2012). A model-based evaluation of the debate on the size of the tax multiplier. American Economic Journal: Economic Policy, 4(2), 28–45.Google Scholar
  17. Christiano, L., Eichenbaum, M., & Rebelo, S. (2011). When is the government spending multiplier large. Journal of Political Economy, 119(1), 782121.CrossRefGoogle Scholar
  18. Christodoulakis, N. (2011). From indecision to fast-track privatisations: Can Greece still do it? National Institute Economic Review, 217(1), R60–R74.CrossRefGoogle Scholar
  19. Corsetti, G., Kuester, K., Meier, A., & Meuller, G. (2012). Sovereign risk, fiscal policy and macroeconomic stability. IMF working paper, 12/33.Google Scholar
  20. De Grauwe, P., & Ji, Y. (2012). Mispricing of sovereign risk and multiple Equilibria in the Eurozone. CEPS working document, no. 361.Google Scholar
  21. DeLong, J. B., & Summers, L. H. (2012). Fiscal policy in a depressed economy. Brookings Papers on Economic Activity, 233–297.Google Scholar
  22. Druant, M., Silvia, F., Gabor, K., Lamo, A., Martins, F., & Sabbatini, R. (2012). Firms’ price and wage adjustment in Europe: Survey evidence on nominal stickiness. Labour Economics, 19(5), 772–782.CrossRefGoogle Scholar
  23. European Union. (2011). Euro summit statement. Brussels, October 26.Google Scholar
  24. European Union. (2012). Eurogroup statement. Brussels, February 21.Google Scholar
  25. Favero, C., & Francesco, G. (2012). Measuring tax multipliers: The narrative method in fiscal VARs. American Economic Journal: Economic Policy, 4(2), 69–94.Google Scholar
  26. Gali, J., David Lopez-Salido, J., & Valles, J. (2007). Understanding the effects of government spending on consumption. Journal of the European Economic Association, 5(1), 227–270.CrossRefGoogle Scholar
  27. Garefalakis, A., Lemonakis, C., Alexopoulos, G., & Tabouratzi, E. (2017). History of Greece’s debt crisis and the banking policy. In The Greek debt crisis (pp. 177–187). Cham: Macmillan.CrossRefGoogle Scholar
  28. Gilchrist, S., Shoenle, R., Sim, J. W., & Zakrajsek, E. (2013). Inflation dynamics during the financial crisis. 2013 meeting papers 826, Society for Economic Dynamics.Google Scholar
  29. Gkillas, K., Vortelinos, D., Floros, C., Garefalakis, A., & Sariannidis, N. (2019). Greek sovereign crisis and European exchange rates: Effects of news releases and their providers. Annals of Operations Research, 1–22.Google Scholar
  30. Hall, R. E. (1986). The role of consumption in economic fluctuations. In The American business cycle: Continuity and change (pp. 237–266). Chicago, IL: University of Chicago Press.Google Scholar
  31. Ilzetzki, E., Mendoza, E. G., & Vegh, C. A.. (2010). How big (small?) are fiscal multipliers? Working paper 16479, National Bureau of Economic Research.Google Scholar
  32. Jiang, G. J., & Tian, Y. S. (2005). The model-free implied volatility and its information content. Review of Financial Studies, 18, 1305–1342.CrossRefGoogle Scholar
  33. Jiang, G. J., & Tian, Y. S. (2007). Extracting model-free volatility from option rices: An examination of the VIX index. Journal of Derivatives, 14, 1–26.CrossRefGoogle Scholar
  34. Kaplanidou, K., Jordan, J. S., Funk, D., & Ridinger, L. L. (2012). Recurring sport events and destination image perceptions: Impact on active sport tourist behavioral intentions and place attachment. Journal of Sport Management, 26(3), 237–248.CrossRefGoogle Scholar
  35. Laurence, B., & Mankiw, G. (1994). Asymmetric price adjustment and economic fluctuations. Economic Journal, 104(423), 247–261.CrossRefGoogle Scholar
  36. Lemonakis, C., Garefalakis, A., Georgios, X., & Haritaki, H. (2018). A study of the Banks’ efficiency in crisis: Empirical evidence from Eastern Europe, Balkans and Turkey. Journal of Governance and Regulation, 7(3), 8–12.CrossRefGoogle Scholar
  37. Lemonakis, C., Garefalakis, A., Giannarakis, G., Tabouratzi, E., & Zopounidis, E. (2017). Innovation and SMEs financial distress during the crisis period: The greek paradigm. In The Greek debt crisis (pp. 285–308). Cham: Macmillan.CrossRefGoogle Scholar
  38. Mertens, K., & Ravn, M. O. (2012). Empirical evidence on the aggregate effects of anticipated and unanticipated US tax policy shocks. American Economic Journal: Economic Policy, 4(2), 145–181.Google Scholar
  39. Messina, J., Duarte, C. F., Izquierdo, M., Caju, P., & Hansen, N. L. (2010). The incidence of nominal and real wage rigidity: An individual-based sectoral approach. Journal of the European Economic Association, 8(2–3), 4872496.Google Scholar
  40. Perotti, R. (2005). Estimating the effects of fiscal policy in OECD countries. Discussion paper 4842, Centre for Economic Policy Research.Google Scholar
  41. Perotti, R. (2012). The effects of tax shocks on output: Not so large, but not small either. American Economic Journal: Economic Policy, 4(2), 214–237.Google Scholar
  42. Ramey, V. A. (2011). Identifying government spending shocks: It’s all in the timing. The Quarterly Journal of Economics, 126(1), 1–50.CrossRefGoogle Scholar
  43. Ramey, V. A., & Shapiro, M. D. (1998). Costly capital reallocation and the effects of government spending. In Carnegie-Rochester conference series on public policy (Vol. 48, pp. 145–194). Amsterdam: Elsevier.Google Scholar
  44. Romer, C. D., & Romer, D. H. (2010). The macroeconomic effects of tax changes: Estimates based on a new measure of fiscal shocks. American Economic Review, 100(3), 763–801.CrossRefGoogle Scholar
  45. Schuknecht, L., von Hagen, J., & Wolswijk, G. (2010). Government bond risk premiums in the EU revisited. The impact of the financial crisis, European Central Bank working paper, no. 1152.Google Scholar
  46. Spilimbergo, A., Symansky, S., & Schindler, M. (2009). Fiscal multipliers. IMF staff position note, SPN/09/11, May 2009. Washington: International Monetary Fund.Google Scholar
  47. Su, L., & Swanson, S. R. (2017). The effect of destination social responsibility on tourist environmentally responsible behavior: Compared analysis of first-time and repeat tourists. Tourism Management, 60, 308–321.CrossRefGoogle Scholar
  48. Woodford, M. (2011). Simple analytics of the government expenditure multiplier. American Economic Journal: Macroeconomics, 3(1), 1–35.MathSciNetGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Georgios Alexopoulos
    • 1
    Email author
  • Alexandros Apostolakis
    • 2
  • Constantin Zopounidis
    • 3
  • Alexandros Garefalakis
    • 2
  • Marianna Eskantar
    • 3
  1. 1.Department of Social and Educational PolicyUniversity of PeloponneseKorinthosGreece
  2. 2.Department of Business Administration and TourismHellenic Mediterranean University (HMU)CreteGreece
  3. 3.Financial Engineering LaboratoryTechnical University of CreteChaniaGreece

Personalised recommendations