In this chapter we aim to contribute to the debate on institutional change from a political economy perspective, by analysing the Greek case from 1995 to 2018, to shed some light on the recent macroeconomic evolution of the country. We identify and analyse the institutional framework in Greece focusing on the main legislative shifts and agent´s behaviour before and after the financial crisis and we study their impact on the aggregate demand and its components, the structure of income distribution and the evolution of the Greek labour market in each period of time.

Prior to the crisis we focus on the policy stance of the different Greek governments with respect to the process of European integration and the adoption of the Euro as well as their implications on the evolution of the macroeconomic dynamics. Following the onset of the crisis we analyse the fundamental transformations in Greece´s institutional setup, focusing on the role of ECB´s monetary policy and the implementation of the ESM programs of financial assistance starting in 2010, that implied severe structural adjustment policies. We assess their effects on the aggregate demand in Greece, by questioning the mainstream stance that Greece had finally left behind the austerity and the crisis.