GREEK LABOR MARKET, THE EURO AND THE CURRENT CRISIS

This paper is based on two strands of relative literature. The first examines the effect of sticky wages on international trade, unemployment and trade policy. The second strand looks at the effect of the exchange rate on wages. Related to this literature is the discussion in the European Union on establishing a common currency. In this paper, a theoretical and empirical model is developed which is tested using the Greek Labor Market as a case study. Also, a policy section discuss the options available to both the Greek policy makers and the leaders of Greek trade unions.