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Making geographical sense of the Greek austerity measures: compositional effects and long-run implications

By Vassilis Monastiriotis

Abstract

This paper examines the geographical impact of the recent austerity measures in Greece. Owing to compositional differences across regions, the horizontal measures are found to amplify existing disparities. It is argued that under certain conditions, relating to wider spatial imbalances in the country, this can trigger cumulative divergence processes that may be hard to address in the future. To correct this, it is proposed that revenue-generating efforts should concentrate more on tackling tax evasion and increasing tax progressivity; while the reduction in public consumption should be compensated by targeted increases in public investment. Facilitating the early release of already earmarked European Union funds can be central for such a strategy

Topics: HC Economic History and Conditions
Publisher: Oxford University Press
Year: 2011
DOI identifier: 10.1093/cjres
OAI identifier: oai:eprints.lse.ac.uk:39697
Provided by: LSE Research Online
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