What is the real cost of the Greek crisis?

Dr. Periklis Gogas
Associate Professor



Nancy Dimitriadou


Department of Economics, Democritus University of Thrace

The Greek debt crisis led to an unprecedented reduction in the country’s real GDP by 26.5%. This recession is one of the largest crises that the world economy has ever seen. For comparison, the Great Depression in the US in the later 1920’s resulted in a GDP reduction between 25% to 30%. Moreover, the Great Depression lasted for four years, while the Greek crisis reaches almost 8.

Simply stating that Greeks lost 26.5% of their income paints a gruesome picture. The true impact of the crisis is even worse. We compare current Greek real GDP to the one in 2009 just before the crisis. By doing so we are not taking into account a very significant stylized fact of every economy: growth. All economies show a strong positive trend in their GDP time series. This is the result of a steady growth in the factors of production, i.e. human and physical capital. The available human-working-hours increase due to population growth and the amount of physical capital stock also increases over time as a result of investment in fixed capital. Last but certainly not least, an additional very important factor for continuous growth is the improvement in technology. Technology significantly increases the productivity of both human and physical capital.

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Dr. John Psarouthakis, Executive Editor of www.BusinessThinker.com,  publisher of www.GavdosPress.com and Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation.
For details go to: http://linkd.in/1AF7El7

We have been in the midst of a fundamental and historic shift of how the economies around the world develop.  With the collapse of communism, the centralized and state control model of the economy has also collapsed. Other socialist State models, i.e., Sweden, UK before Margaret Thatcher, have also collapsed.  What we have now, however, imperfect it maybe, is the model of the “Free Market.”

This shift is occurring in parallel with two other sociopolitical expressions:

  1. Smaller government, though the last couple years this seems to have moderated quite a bit, and
  2. the need, indeed the demand by our society to provide assistance, protection, and distribution of economic benefits a “fair” way

What we are witnessing is a major shift on “how we can fulfill our expectations of a humanistic society” while we keep the state’s interventions and control power at minimum.

Before I deal with this question (shift) let me digress in to a bit of history .  .  .  .  After all, how can a Greek get up to talk about such matters without referring to HISTORY .


A Few Notes on Mergers & Acquisitions

Dr. John Psarouthakis, Executive Editor of www.BusinessThnker.com, is the Founder and former CEO of JP Industries, Inc, a Fortune 500 industrial group. that acquired 28 operations in USA and western Europe before  merging with T&N, a British group.

Because the content of this article is still relevant today as it was in 2009 when it was first posted we are reposting it today.

The successful mergers and acquisitions require a great deal more than just analysis of the financial statements of the candidate. Digging in deeply in the operating details and asking the right questions is a fundamental component of evaluating the candidate. A very involved and intense discussion of all aspects of the business is necessary.

The M&A team will be faced with many challenges and numerous time-critical deadlines and milestones to be met. Customers want to know what is going on, suppliers similarly.  During the early stages of the integration process   the board’s executive committee must closely oversee and evaluate the effectiveness of the process..

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