Economics ETDs

John Chilas

Publication Date

10-8-1976

Abstract

The present dissertation attempts basically to describe the functioning of a developing economy like Greece, for the post-World War II period, in terms of twelve structural equations. It further demonstrates the usefulness of the system of equations in contributing to the solution of complex problems of economic forecasting and policy making. After a thorough examination of the major developments during the post-war years and the main characteristics and problems facing the Greek economy, the study presents the postulated theoretical and empirical foundations of the structure of the model. The structural equations are estimated basically by the method of single equation least squares and at times by the method of two-stage least squares. The study then underlines the statistical properties of the estimated structure and examines alternative specifications of the individual equations on the basis of single equation statistical criteria. The dissertation goes on to deal specifically with the following problems: 1) The examination of the ability of the model as a whole to explain the working of the economy both inside and outside the sample period. The reproduction of the time series of the endogenous variables with in the sample period is carried out with the structural method. The acid test of a model is, of course, its predictive ability. Ex-post predictions are made for the year 1974 and the ability of the predictive power of the model is examined by Theil’s coefficient and by the scatter diagram method. 2) The usefulness of the model for past policy evaluations. This is done by introducing the concept of capacity utilization for the Greek economy and estimating the pattern of utilization of historically attainable capacity in the post-World War II period, which then is compared with actual output. An explanation is offered for the existence of the GNP gap and government stabilization policies are evaluated with respect to their effectiveness in promoting Greek economic growth. 3) Finally, the present study attempts to determine the possible effects on a less developed economy of association with an economic union of developed countries. Since the association and the participation of Greece with the European Economic Community has not received unanimous approval nationally, we include in our analysis of the evaluation of potential effects both disadvantages or risks to which the association is likely to expose the Greek economy, and advantages or main benefits which Greece is expected to derive from her union with EEC. The main results and our major conclusions may be summarized as follows: (a) Greece is definitely on her way to development, as testified by our analysis of Cahpters I and II; (b) Our statistical analysis reveals that the major explanation of the post-World War II performance is to be found in the dynamic interrelationships among certain Greek economic variables; (c) The ability of the model to explain the economic facts in the sample period is high, and the hypothesis of a good extrapolation is accepted; (d) Some potential output was lost due to ineffectiveness of certain policy measures, to misuse of fiscal policy, or to both; (e) Finally, Greece should seriously consider both the benefits and risks expected from her association with EEC and, although ultimately she should participate in the Community, it is to her advantage to proceed with caution, setting goals for her future and pursuing economic policies to serve these goals.

Degree Name

Economics

Level of Degree

Doctoral

Department Name

Department of Economics

First Committee Member (Chair)

Pham Chung

Second Committee Member

Albert Marion Church III

Third Committee Member

William Dietrich Schulze

Language

English

Document Type

Dissertation

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