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This essay summarizes developments since the outbreak of the Greek economic crisis in 2010 from the perspective of various myths that dominated the public discourse from 2010 to 2016. In the author's view, the perpetuation of these myths, which was partly the result of poor communication policies of the Greek governments, impeded a swifter resolution of the crisis. The analysis is based on the author's personal experiences while he served as an alternate executive director of the International Monetary Fund representing Greece from January 2012 to July 2015.

ABSTRACTThis paper challenges the mechanical application of inflation accounting to public sector deficits as it has been suggested in recent years. Although the theoretical considerations underlying the proposed adjustment for the inflation premium of interest payments are well taken, the new approach has fundamentally focused on measurement issues with little attention paid to the behavioral aspects of microeconomic adjustment. This paper, therefore, raises skepticism about the usefulness of inflation accounting, if such a correction is not accompanied by a conceptual model that links behavioral responses of individuals to balance sheets and other stock variables. In a departure from previous investigations, the paper also points out the possibility that inflation accounting might have more relevant implications for public, rather than private, spending.