As Greece tumbles headlong and seemingly inevitably into bankruptcy, I’ve been wondering what the mood in the country is like. The string of protests, riots, and frank man-on-the-street interviews give a good glimpse at how the public feels, but the temperament of economists close to the crisis has been less publicized. Fortunately, Sergio Rebelo, a professor of finance, is currently attending the 10th Conference on Research on Economic Theory and Econometrics in Milos and sent in this report after sitting in on a panel session about the Greek debt crisis.
The mood was generally somber. Some economists hope that the crisis will force Greece into reforming its inefficient state and oligopolistic market structure. Others stress that there is still little public support for these reforms and worry about a scenario in which Greece has to leave the European Union. Everybody agrees that some form of debt restructuring will have to occur. Many economists hope that some form of debt forgiveness can be made contingent on the reforms that are implemented.
Photo by underflowR.