Department of Economics Athens University of Economics and Business WORKING PAPER no. 01-2021 Historical Cycles of the Economy of Modern Greece From 1821 to the Present George Alogoskoufis February 2021 Πατησίων 76, 104 34 Αθήνα. Tηλ.: 210 8203303-5. E-mail:
[email protected] / www.aueb.gr 76, Patission Street, Athens 104 34 Greece. Tel.: (+30) 210 8203303-5 Historical Cycles of the Economy of Modern Greece From 1821 to the Present George Alogoskoufis* Athens University of Economics and Business Hellenic Observatory, London School of Economics February, 2021 Abstract This paper reviews and interprets the history of the economy of modern Greece, from the eve of the war for independence in 1821 to the present day. It identifies three major historical cycles: First, the cycle of state and nation building, 1821-1898, second, the cycle of national expansion and consolidation, 1899-1949, and, third, the post-1950 cycle of economic and social development. During these two hundred years, the country and the economy have been radically transformed. Compared to the first Greek state, Greece managed to almost triple its national territory, to increase its population by almost 15 times and to increase its real GDP per capita by another 15 times. From the margins of south-eastern Europe, it has moved to the core of today’s European Union.The paper focuses on the main determinants of economic performance during these cycles, with particular emphasis on the role and interactions of social and economic conditions, ideas, institutions and geopolitics. During the first two cycles, the economy underperformed, as state building and the pursuit of the ‘great idea’ were the top national priorities.