Essays on socio economic ills

Abstract

This thesis is comprised of three essays that examine the impact of economic deterioration on the economy and society. It focuses on the interrelations among several socio-economic ills examined: sovereign defaults, excessive public debt, absence of economic growth and suicides. In an attempt to provide a holistic view of the topics covered, a combination of both economic and political explanatory variables are used. After discussing in Chapter 1 the motivation for this thesis, the Global Financial Crisis of 2007, Chapter 2, investigated the determinants of sovereign defaults. With the help of a logit regression and using a variety of political and economic variables, we show that both types of variables determine whether a county will default or not. Various robustness tests were also carried out that confirm these findings. In Chapter 3, the effect of the IMF intervention, once a country has defaulted, on its economic growth is investigated. The IMF intervention is measured as a dummy and the method used is the two stage least squares regression, where the instruments are the level of democracy and the UN Security council temporary membership. The findings suggest that the lagged effect of IMF rather than its contemporaneous effect is positive with respect to economic growth. In Chapter 4, the focus is on the sociological effects of the IMF intervention, with the dependent variable being suicide rates. The data sample has been split in many different ways, such as males/females, and the results of the research show that IMF intervention, unemployment and abortions increase suicides whereas alcohol consumption decreases them.