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JSPES, Vol. 41, No. 1 (Spring 2016)
pp. 51–77

Aftermath of the Great Recession, the Role of Institutions and Economic Policies: The Cases of Cyprus and Greece

George Pirishis

The economic recession that has hit Greece and Cyprus over the last few years is, for the two countries, the worst recession in the last 40 to 50 years. However, we see in the case of Cyprus the economy following a faster path to recovery as opposed to the Greek economy, which is sinking more and more into recession, political instability and polarization. A deeper analysis of the causes that lead the two countries on different paths shows the difference to lie in economic policies as a result of diverse macroeconomic and structural imbalances. Also, in the case of Cyprus, the quality of institutions seems to be a catalyst in the economic regeneration of the island in contrast to Greece in which the institutions of the state were declining even before the economic crisis.