Is the Greek crisis in the EMU contagious?

Abstract

In this article, we employ a number of econometric techniques in order to examine, on a quarterly basis, the transmission of fluctuations between the Greek and the other economic and monetary union (EMU) countries, respectively, after the introduction of the common currency in the period 2001–2012, which fully captures the recent recession. Our main finding is that the Greek crisis is, indeed, transmitted to several of its EMU counterparts, especially due to its various forms of debt but cannot (Granger) cause their economic activity except for in the short-run.

Keywords:

• business cycles
• crisis
• transmission
• debt
• Greece

JEL Classification:

• C50
• O52