The Greek Current Account Deficit:Is it Sustainable after all?

Abstract

The large Greek current account deficit figures reported during the past few years have become the source of increasing concern regarding its sustainability. Bearing in mind the variety of techniques employed and the views expressed as regards the analysis and the assessment of the size of the current account deficit, this paper resorts to using neural network architectures to demonstrate that, despite its size, the current account deficit of Greece can be considered sustainable. This conclusion, however, is not meant to neglect the structural weaknesses that lead to such a deficit. In fact, even in the absence of any financing requirements these high deficit figures point to serious competitiveness losses with everything that these may entail for the future performance of the Greek economy.Neural Networks; Current Account Deficit Sustainability