Güney Avrupa'nın cari açığı

The first chapter of this thesis focuses on the optimality of the current account deficits of Greece, Portugal, and Spain, which reached their peak during the global financial crisis. In particular, I follow the Engel and Rogers (2006) analysis, which posits a link between the current account deficit of a country and its expected discounted present value of future income share in the world relative to its current share. The analysis shows that while the current account deficits of Greece and Spain in 2008 may be considered an outcome of optimal decisions of households, the Portuguese current account deficit cannot be deemed optimal. In the second chapter, I consider a sudden stop analysis in a two-country heterogeneous agent-incomplete markets framework in the spirit of Bewley (1986), Huggett (1993), and Guerrieri and Lorenzoni (2017), calibrated to Greece and 14 EU countries. Then, I explore how a sudden tightening of the borrowing constraint in Greece affects its external accounts and consumption along the transition path to the long-run equilibrium. The sudden stop causes a welfare loss for Greece in the short run and decreases wealth inequality.