TD NEREUS 05-2017
Eduardo A. Haddad, Natalia Cotarelli, Thiago C. Simonato, Vinicius A. Vale and Jaqueline C. Visentin
The impact of the crisis in the Greek economy was not uniform among the regions, threatening socioeconomic cohesion. In this paper, we explore the concept of the income multiplier in a multi-regional setting, in the context of the Greek recession, showing empirical evidence for the increasing magnitude of the multiplier during the recession period. The main results reveal a complex system of interregional relations on some of whose structural characteristics the cyclical reaction paths of the regions depend. In this case, the use of fiscal instruments to stimulate local activity in the regions may bring about important implications for regional inequality in Greece.