THE BAIL-OUT! POSITIVE POLITICAL ECONOMICS OF GREEK-TYPE CRISES IN THE EMU

摘要

The Greek bail-out was highly controversial. An oft-heard assessment is that (i) the bail-out was a mistake, (ii) the political haggling over it was irrational. Contrary to this view, our analysis suggests that, given EMU's present political-economic set-up, (i) the bail-out was unavoidable and (ii) the lengthy process of political haggling leading to it was understandable. We have based our analysis on a political-economic, game-theoretic model that helps to understand why and how the parties involved in the Greek crisis arrived at the bail-out and on what conditions the final solution depended.