This paper contrasts the stabilization programs of Ireland and Greece in the 1980s and draws conclusions for the design of such programs in small open economies. Programs relying on government revenue increases are less likely to succeed than those based on expenditure reductions. The paper also emphasizes the contribution which a devaluation can make in the initial stages of such a program, but argues that this can only be effective in the context of a regime with established anti-inflationary credibility.
Economic and Social Review, 23, pp. 225-246 (April 1992).