The Greek debt trap: an escape plan. Bruegel Policy Contribution 2012/19, 7 November 2012

Without corrective measures, Greek public debt will exceed 190 percent of GDP, instead of peaking at the anyway too-high target ratio of 167 percent of GDP of the March 2012 financial assistance programme. The rise is largely due to a negative feedback loop between high public debt and the collapse in GDP, and endangers Greek membership of the euro area. But a Greek exit would have devastating impacts both inside and outside Greece. A small reduction in the interest rate on bilateral loans, the exchange of European Central Bank holdings, buy-back of privately-held debt, and frontloading of some privatisation receipts are unlikely to be sufficient. A credible resolution should involve the reduction of the official lending rate to zero until 2020, an extension of the maturity of all official lending, and indexing the notional amount of all official loans to Greek GDP. Thereby, the debt ratio would fall below 100 percent of GDP by 2020, and if the economy deteriorates further, there will not be a need for new arrangements. But if growth is better than expected, official creditors will also benefit. In exchange for such help, the fiscal sovereignty of Greece should be curtailed further. An extended privatisation plan and future budget surpluses may be used to pay back the debt relief. The Greek fiscal tragedy highlights the need for a formal debt restructuring mechanism

Why is the Greek economy collapsing? A simple tale of high multipliers and low exports. CEPS Commentary, 21 December 2012

In an attempt to understand why the Greek economy is collapsing, this Commentary points out two key aspects that are often overlooked – the country’s large multiplier and a bad export performance. When combined with the need for a large fiscal adjustment, these factors help explain how fiscal consolidation in Greece has been associated with such a large drop in GDP.

Students’ perception of the safety and value of a herbal vs. a conventional medicine for treating insomnia

University students suffer from variable sleep patterns including insomnia;[1] furthermore, the highest incidence of herbal use appears to be among college graduates.[2] Our objective was to test the perception of safety and value of herbal against conventional medicine for the treatment of insomnia in a non-pharmacy student population. We used an experimental design and bespoke vignettes that relayed the same effectiveness information to test our hypothesis that students would give higher ratings of safety and value to herbal product compared to conventional medicine. We tested another hypothesis that the addition of side-effect information would lower people’s perception of the safety and value of the herbal product to a greater extent than it would with the conventional medicine.

The imminent availability of a potent weight-loss medicine in pharmacies: public perception of effectiveness

Orlistat is an effective weight-loss medicine, which will soon be available for purchase in pharmacies. We used a factorial experiment and found that informing people about the availability for purchase of this medicinal product previously only available on prescription resulted in higher ratings of perceived value and effectiveness compared to a natural health supplement even though we used the same statement about effectiveness. This positive perception of orlistat was not impaired by the provision of side-effect information. Orlistat will soon be available in pharmacies. Health professionals must act to prevent its misuse by those not overweight.