A Post - Keynesian Analysis of The Greek Crisis

Abstract

The purpose of this study is to analyze the causes of the Greece debt crisis and discuss about possible solutions for the Greek economy in Post - Keynesian perspective. In this framework, first, the establishment and evolution of the European Monetary Union will be briefly examined. Second, the effects of the monetary union on the Greek economy will be discussed. Then, the remedies for the crisis along with the measures taken within the scope of the rescue package adopted will be examined from a Post Keynesian perspective. At this point, Hyman Minsky’s Financial Instability Hypothesis and Michal Kalecki’s profit function will be used to analyze the reasons behind the crisis. Last but not least, Employer of the Last Resort Programme, which can be summarized as a program where the government takes into employment of anyone who is willing and able to work, will be discussed as a cure for the recovery.