Greek Debt and American Debt: Graduation Speech at the University of Athens Economics and Business School

Abstract

This is the graduation speech I gave on receiving an honorary doctorate at the University of Athens Economics and Business School. I talk about my Greek family, about how I got interested in economics, and then how in the 1990s I came to think about default, collateral, and leverage as the central features of the financial/macro economy, despite their complete absence (even now) from any textbooks. Finally I suggest that the Greek debt problem, and on a bigger scale, the American debt problem, can only be cured when lenders are prodded to forgive. That would be better for the borrowers but also for the lenders.

Keywords: Greek, Parents, Mathematical economics, Yale, Mortgage, Collateral, Securitization, Leverage, Foreclosure, Forgive, Principal

JEL Classification: D52, D53, E444, G01, G10, G12