117-137

• Seyler, Edward
• Levendis, John

To what extent is Greece’s current economic crisis the result of monetary policy misalignment between the European Central Bank and Greece? We use a risk adjusted Taylor Rule to examine Greece’s monetary policy from 1993 to the present. We argue that the monetary policy of the Bank of Greece satisfies several criteria for a good monetary policy. The monetary policy of the ECB, on the other hand, exhibits characteristics that suggest it had a destabilizing effect on the economy of Greece. That is, whereas the ECB could have balanced excessive fiscal stimulus with a contractionary monetary policy, the ECB’s actual expansionary monetary policy may have reinforced the fiscal stimulus and led to further destabilization.

• Economics and Business
• Computer and information sciences

• Economic policy
• Statistics

Greece, monetary policy, Bank of Greece

Περιέχει διαγράμματα, πίνακες και βιβλιογραφία, JEL Classification: E00, E50, E58

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