...The comparative advantage of Greece in the era of recession Lampros Gallos National and Kapodistrian University of Athens Athens, Greece lam.gal@hotmail.com Abstract The aim of this paper is to investigate the export behaviour of Greece and to identify its comparative advantage. Moreover, through the conclusions of the analysis, is investigated whether the export activity of the country coincides with its comparative advantage especially in the present circumstances, those of recession. Initially, we define the comparative advantage based on the approaches of Adam Smith, David Ricardo's and Heckscher-Ohlin. Furthermore we analyze the current situation of the country, Greece’s economic structure and its trade performance, mainly the exports. In addition we identify the elements of the Greek competitiveness and the results of the fiscal consolidation that Greece is undergoing. Having analyzed the definition of the comparative advantage and the data concerning Greece’s reforms we proceed in identifying Greece’s comparative advantage mainly in four different sectors. Firstly we identify the key factors making the touristic sector extremely profitable for the Greek economy; secondly we analyze the commercial shipping sector then the strategically position of the country and finally the competitive rates in which Greece seems to gain ground. Keywords: comparative advantage, competitiveness, internationalisation, entrepreneurship, financial crisis. 1 Contents: 1....
Words: 4235 - Pages: 17
...DEBT CRISIS COULD AFECT YOU Reasons for selecting the article The reasons for choosing the article are that firstly, it stated that aggregates for economic consequences, GDP, recession and unemployment have greatly affected Singapore economy. The article also focused on the nation behaviour of the declining economy for US and Greece due to finance crisis which in turn affect other nations, in this case, Singapore. In fact, the article briefly explained how aggregates like national income and output have affected US and Greece economy, which in turn affected Singapore. It will be further discussed whether this mentioned global crisis will affect Singapore inflation, causing a rise in unemployment rate and the slowing of GDP growth for emerging markets. Summary of the article The article comments on how two of Singapore’s trading partners, mainly US and Greece, are hurting themselves with their debt problems and the impact of their problems on Singapore economy. It briefly describes what US debt ceiling is and the heavy borrowing of Greek government which has greatly contributed to the global debt crisis. It also explains on US debt problem and other aftershocks if the debt ceiling is not rise. Moreover, it explains the debts that Greece had incurred and what will happen if Greece defaults on its debts. Lastly, it further highlighted that the Singapore economy is affected by the two countries’ debt problems. Identify and discuss on the economics concepts and...
Words: 1253 - Pages: 6
...include a 10% cut in government spending. Analysis: In the coast of Southern Europe, more notably Greece, have only a diminutive capacity to propose and implement economic policy due to the ruling government. Series of unfortunate events happen to Greece due to the corresponding amassed economic problem. The said problem is circulating on issues vis-à-vis the civic authorities, past until present. Markets were swayed as Greece’s national debt skyrocketed that caused a worldwide disarray. For the reason that the state is experiencing an economic crisis, the government proposed its plan of action. One of two possible motive for such move is to cut down its deficit and he second being their struggles and helplessness in addressing the problem themselves. To compensate for this, the Greek government broadcasted the assurance to settle the state’s current undertakings. The interest charged between the Greek and its creditors widens because Greece may default. Also, they announced a wider sternness suite, which includes a cut on the government spending by approximately 10%. The effects of this are freeze on public sector pay and higher taxes for low and middle-income households. Due to this announcement, the latter persons involved, protested as threat of a bailout was lingering around the corner. However, creditors such as Germany, refuses to the said quick bailout by Greece. The Germans said that they made the problem, they should tackle the debt by themselves. Fearing the endgame...
Words: 591 - Pages: 3
...| About IMF The International Monetary Fund (IMF) works to bring up International Monetary Cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and to reduce the poverty around the world. IMF was created in 1945 and it’s an organization of 187 countries. Why IMF was created and how it works? The IMF, also known as the “Fund,” was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, United States, in July 1944. The 44 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the vicious circle of competitive devaluations that had contributed to the Great Depression of the 1930s. Work of IMF The primary mission of the IMF is to provide financial assistance to countries those countries who experience financial and economic difficulties and to sought those difficulties they are given financial help by using funds deposited with the IMF from the institution’s 187 member countries. Member of IMF states with balance of payments problems, which often arise from these difficulties, may request loans from IMF to help fill gaps between what countries earn and/or are able to borrow from other official lenders and what countries must spend to operate, including covering the cost of importing basic goods and services. In return, countries are required to launch certain reforms which have often been dubbed...
Words: 4899 - Pages: 20
...banning production as in limiting the numbers of or preventing production as in eliminating the incandescing light bulb and requiring the production and purchase of florescent lights; interference is also noted within national boundary’s such as with oil production, taxing production as in the coal industry which supplies electrical power and overregulation of production such as is used with environmental protections (EPA) or hinder commerce as with the Commerce department. Given some of these influences a nation’s economy tends to flow through various stages of a business cycle: Prosperity, recession, depression, and recovery. Economists believe that the last economic depression experienced in the United States and throughout the world occurred in the 1930s. Though the current international developments’, such as increases in sovereign debt and inability to repay loans as with Greece, Spain and Italy...
Words: 1097 - Pages: 5
...channels. Ordinarily, the role of digital media is to act as a medium of communication. However, in the case that the accuracy of the information is not controlled, it can lead to various impacts to the society. The digital media played a very significant role in the financial crisis through the spread of information. As such, this paper analyses digital media ethics in relation to the global financial crisis and its effects to the society. The World Financial Crisis The global economic crisis has caused many problems nearly to all the sectors of the economy in the world. Many countries have suffered deep in their growth domestic product while recession has a common experience all over the world. The severity of the crisis has persisted to the recent times, but this can be attributed to the debts incurred by some developed economies like Greece even after strong support from other countries. As a result, the world’s financial system experiencing these global economic crisis of severe staggering magnitude, there are those who believe that it will continue to be experienced across all sectors of the economy. The financial crisis is thought to have been caused by the United States mortgage market through its decision to sell sub-prime mortgages to an expanded number of consumers and, which resulted to modest or insufficient...
Words: 2967 - Pages: 12
...Sample Article: The Financial Crisis in Spain Summary Unemployment in Spain has reached 17.4 percent, according to figures released April 24 by the National Statistics Institute. Even without the global recession, Spain's economy likely would be going through a rough patch now due to the country's overheated housing market; with the recession, it is also suffering from a banking crisis and an industrial slump. Analysis Spain's unemployment rate rose from 13.9 percent in the fourth quarter of 2008 to 17.4 percent in the first quarter of 2009, increasing the ranks of the unemployed to more than 4 million, according to National Statistics Institute (INE) figures released on April 24. Spanish Economy Minister Elena Salgado said that the first quarter of 2009 will be the worst in terms of increasing unemployment. The International Monetary Fund (IMF) predicts that unemployment in Spain will reach 17.7 percent in 2009 and 19.3 percent in 2010, but the INE figures seem to indicate that unemployment could exceed 20 percent by the end of 2009. Of all the European countries, Spain has in many ways been one of the most gravely affected by the global economic crisis. Even without the global recession, Spain would most likely be undergoing a correction this year due to its extremely overheated housing market. But it is facing a severe housing market correction, an industrial slump, and a banking crisis caused by the housing correction and the recession's overall effects -- simultaneously...
Words: 2276 - Pages: 10
...In has been almost three years since the global financial crisis that started in the United States which was due to housing subprime lending, meaning that loans were being made to people who had difficulty maintaining the repayments on schedule. According to Bernanke (2009:01), “the proximate cause of the crisis was the turn of the housing cycle in the Untied States and the associated rise in the delinquencies on the subprime mortgages, which imposed substantial losses on many financial institutions and shook investor confidence in the credit market”. What happened was that the housing crisis began because too many people made loans and ended up being unable to pay off their mortgage payments because the banks had trick them into believing they could pay back their mortgage even though they were high rise candidates. “Home loans were created with adjustable rates and promises to hold off payments for two years, giving consumers false hopes that their homes would more affordable in the future. When the future came, those people were unable to make payments and foreclosures spread across the country like a wildfire” writes Munday (2010:01). Meaning that the average US family only owned a small percentage of their home while the banks owned the majority the banks realized they were losing money by selling the houses for less than their mortgage price since house prices were dramatically down, they then foreclosed. What followed was an escalating foreclosure rate panic and many banks...
Words: 1836 - Pages: 8
...Usama Rehan Khan 4650578 | TBS905 ------------------------------------------------- A Comparative Analysis of UAE and France Economies Submitted to: DR. Asima Shiraz Usama Rehan Khan 4650578 | TBS905 ------------------------------------------------- A Comparative Analysis of UAE and France Economies Submitted to: DR. Asima Shiraz Contents Abstract 2 Introduction to UAE Economy 2 Introduction to French Economy 2 GDP (Gross Domestic Product) 3 Components of GDP 4 Consumption 4 Private Investments 4 Government Expenditures 5 Net Exports 6 Unemployment 7 Inflation 8 Exchange Rate 8 Critical Analysis of Economies 10 France 10 United Arab Emirate 11 Abstract This paper is an attempt to give the comparative analysis of the economies of France & UAE. Both economies vary in their structure, size and opportunities. This work tries to elaborate the economies by discussing variable like GDP, Inflation, Exchange Rate and Unemployment. It tries to give a clear picture of the past trends, factors influencing the variations and future predictions. It also involves the critical analysis of both the economies that what current scenario would shape up the future. Introduction to UAE Economy The UAE has an open economy with high sizable annual trade and per capita income. Since the discovery of oil in UAE more than 30 years ago the country has achieved economic diversification and reduced the contribution of oil and gas to GDP to 25 percent...
Words: 2166 - Pages: 9
...The Warwick MBA Assignment Cover Sheet Submitted by: 1167899 Date Sent: 21st of May 2012 Module Title: Economics of the Business Environment Module Code: IB827Z Date/Year of Module: May 2012 Submission Deadline: 21st of May Word Count: 1 113 Number of Pages: 9 Question: More on the austerity debate Question 1: Use the AS/AD framework Question 2: Austerity measures and stimulus “This is to certify that the work I am submitting is my own. All external references and sources are clearly acknowledged and identified within the contents. I am aware of the University of Warwick regulation concerning plagiarism and collusion. No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done an appropriate reduction in the mark I might otherwise have received will be made.” Economics of the Business Environment Lesson 4 assignment WBS08 1167899 21st of May 2012 IB827Z Question 1 Let’s first focus on the definition of GDP, inflation, and public sector borrowing: GDP: Gross Domestic Product, or how much final goods and services is an economy producing. Inflation: is the money devaluation. This phenomenon may be persistent and then imply a raise in prices. Public sector borrowing: money that a state and especially the government will buy for financing its activities (the ones from the public sector in this case). If we now look at the...
Words: 1488 - Pages: 6
...Preliminary Draft February 20, 2010 THE GLOBAL ECONOMIC CRISIS AND SOUTH ASIA By Dr. Akmal Hussain, Distinguished Professor, Beaconhouse National University INTRODUCTION What began as a financial crisis in 2008 rapidly metastasized into a global economic crisis that pushed the world economy into the deepest recession since the Great Depression of the 1930s. In this paper we will examine the origins and nature of this crisis in the context of the dynamics of world capitalism, indicate the policy challenges in the process of recovery and analyze its impact on South Asia. I. STRUCTURAL CHANGE AND FRAGILITY OF THE FINANCIAL SPHERE In the process of its growth the world economy has undergone a structural change in the post war period in terms of two important features: (i) The dominant form of the production unit of goods and services that emerged in the post war period was the large multinational corporation (MNC) in contrast to the large national corporation in the late 19th century and the small firm in the late 18th century.1 The MNCs were not only able to sell goods and services on a global scale but were able to achieve internationalization in their production processes, such that different components of a particular good could be manufactured in their facilities in different countries to take advantage of country specific resource 1 For a more detailed analysis of Growth and Structural Change in the Global Economy since the Industrial...
Words: 3201 - Pages: 13
...Impact of the economic recession on the pharmaceutical sector February 2010 I.M. Buysse (UU) Supervised by: R.O. Laing (WHO) A.K. Mantel (UU) WHO COLLABORATING CENTRE FOR PHARMACOEPIDEMIOLOGY & PHARMACEUTICAL POLICY ANALYSIS Impact of the economic recession on the pharmaceutical sector Table of contents Executive summary ................................................................................................................................. 3 Introduction ............................................................................................................................................ 6 Background ............................................................................................................................................. 8 History of recessions ............................................................................................................................................................. 8 Asian Crisis 1997-2000 .......................................................................................................................................................... 9 Economic crisis 2008-2009.................................................................................................................................................. 12 WHO involvement in assessing the impact of the recession .............................................................................................. 14 Hypotheses ...................
Words: 25253 - Pages: 102
...Euro Crisis: Greece’s Reform to Uphold the Euro Greece has been a significant trading partner within the EU as well with the global community at large. Public spending has been at its highest since the financial crisis in 2008 and with irrational investing behind banks and the private sectors; it only worsened their economy. The complicated areas of the European economy mostly have been due to countries spending vast amounts of borrowed finances than they have fluctuating within their own nation. Countries deficits are still increasing after the US financial crisis and it has led to continuous austerity agreements and negotiations to prevent these issues from relapsing. Greece is in a classic sovereign debt crisis and while struggling to fix their deficit, (currently the largest in the Eurozone) this turned to controversial debates whether or not to let Greece free of the euro, or continue to keep them in. The problem of the matter relies heavily on the political sector of the union as well as the economic foundation represented in Greece’s past, showing that releasing the nation from the euro will only cause more harm than actually stabilizing them in. The US financial crisis of 2008 grew strongly towards the inefficiency between the banks and investors, who failed to act rational in accordance with the economy (Heath 401). In an efficient market, one person’s gains are another person’s loss but one cannot strategize placement in the market through someone making continuous...
Words: 1483 - Pages: 6
...Financial crisis occurs when the value of financial institution or asset price drops quickly. (Investopedia US, 2013) Today the world financial system is undergoing economic recession. It is assumed to have begun in the year 2007-2008. After the great depression US economy suffered a short term recession in 2001 but came out with it adequately. It also wide stood dotcom bubble bust, attack by terrorists and accounting scandals. Federal government decreased it rate 11 times from 6.5 in 2000 to 1.7% from the year 2000 in order to increase its liquidity in the economy. A man with no job, no income and no asset was able to afford a house mortgage. This rate was decreased to 1% in June 2003. In 2004 country’s elite banks like Lehman brother, Goldman sacs, Merrill lynch, Morgan & Stanley were relaxed with the net capital requirement 30-40 times. (Sivakumar and Krishnaswami, 2012)But after saturation point problem started rising with the rising interest rates. In 2007 it turned out to be a bad new when federal fund rate reached 5.25% in 2006. Many banks got erupted and with shortage of money. Central banks in several countries like UK, Europe central, Sweden, Canada, Switzerland, china etc help in adding world economy but failed. This economic crisis also exploded the economies of Arab nations, Japan, UK, Ireland, Greece, China etc. The consequences faced by these countries in the meltdown were low GDP, high inflation, low deflation, volatile stock market, increasing unemployment, crash...
Words: 4318 - Pages: 18
...democratic government, Fishman debates further that there was not a genuine underlying crisis in Portugal. (Fishman, Robert. The New York Times (The Opinion Pages) Portugal’s Unnecessary Bailout. April 12, 2011) The truth is that Portugal has had an underlying crisis for years but has managed to shift from the global public eye. According to David R. Cameron, professor of Political Science at Yale University, “there has been a recurring imbalance between spending and revenues.” This leads to my first solution, which is to have Portugal abandon their current fiscal policy. This would help cure the numerous “excessive deficits” that they have accumulated since 2002. (Cameron, David. The New York Times. Portugal’s Economy. April 18, 2011.) Like Greece and Ireland, Portugal adopted the euro currency a decade ago meaning that they forfeited their monetary policy. With the current Eurozone crisis that is occurring, my second solution would be to have Portugal revert back to their former...
Words: 1445 - Pages: 6
