The game theoretical analysis on Greek debt crisis

• Main Authors: Yan-Ying Pan, 潘燕瑩
• Other Authors: Yung-Nien Tung
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/80670835187816372400

碩士 === 國立中山大學 === 經濟學研究所 === 104 === The European debt crisis, one of the biggest factors causing anxiety in the international financial markets, has resurfaced in the first half of the year of 2015. 　 During the European debt crisis, the most damaged five countries were Portugal, Italy, Ireland, Spain, and Greece. All of the countries implemented the “fiscal austerity policy”, agreed by the European Commission, the European Central Bank (ECB) and the international Monetary Fund (IMF). Four of the countries have recovered from the financial turmoil, but Greece, the first country that suffered debt crisis, has not. Because Greek people cannot stand the bitterness caused by fiscal austerity policy, they have overthrown the original administration, and elected the anti-fiscal austerity leftists to form a new government in January, 2015. Anti-austerity left-wing parties in Greece attempted to use different debt negotiation methods in the third round debt discussion with the international creditors. They used threats such as, withdrawal from the Euro zone and intentional debt violation as bargaining chips, to force the creditors to accept its conditions. We apply a single-period non-cooperative game to study the development in every round of negotiations between Greece and three creditors (Troika). The results show that Greece can only resolve the debt crisis by “self-bailout”. That is, it should follow the three creditors’ bailout plan, strictly enforce the austerity to reduce the government budget deficit, engage in economic and fiscal reforms, and promote trade and economic recovery. Hence, accepting the fiscal austerity policy and reforming the government simultaneously is the equilibrium outcome.