Wolfers takes on Greek financial crisis in latest NY Times Upshot

July 1, 2015

Amid the Greek financial crisis, heads have turned to experts like Justin Wolfers to help break down the complex economic factors that have led to the current situation. A professor of public policy and economics at the Ford School, Wolfers is known among his readers and Twitter followers for placing compelling quantitative data in the context of politics and policymaking.

On Tuesday, Greece became the first advanced economy to default on its loans to the International Monetary Fund (IMF). That news has further fueled speculation on the outcome of the upcoming July 5 vote in which the electorate will be asked to accept demands made by the government’s international creditors in exchange for additional financial supports.

Prime Minister Alexis Tsipras has called for Greeks to reject the measure, which Wolfers and others anticipate would strengthen the bargaining position of the current government in its talks with Eurozone leaders.

But, in his June 30 article in the New York Times Upshot, he pointed to numbers from Ladbrokes, a British bookmaker, that might disappoint Tsipras.  Bettors in the UK expect that Greek voters will “direct the prime minister to accept the bailout deal from the international financial institutions.” And, while Wolfers acknowledges the limitations of those betting odds, he added that, as the odds adjust to the flow of money, “their odds come to represent a quantifiable assessment of the conventional wisdom.”

Despite that conventional wisdom, however, there remains “tremendous uncertainty” about the referendum.

Wolfers’ article was syndicated in several international publications, including the Australian Financial Review and The Economic Times.

He was also sought for opinion by The Inquiry, a BBC World Service podcast, in its July 1 segment "Is austerity the answer to economic downturn?"

By Nick Pfost (MPP '15)