Category Archives: Economics in Brief

100 years ago and Today–2

Dr. john Psarouthakis

Executive Editor


One hundred years and more ago  most Americans were still living and dying by their muscles. The overwhelming majority used their brawn to extract food from the topsail, or to extract resources from deep in the Earth, or – in increasing numbers – to hammer raw materials into some kind of usable product.

At the same time, business was also a creature of muscle. Building a railroad was not a subtle enterprise. Clear-cutting a million acres of trees was not a subtle enterprise. Pulling all the iron or gold or oil out of a particular region was not a subtle enterprise. Though I might add that even then a good engineer came in handy. I’ll let you guess what discipline I was educated in.

Continue reading 100 years ago and Today–2


Dr. John Psarouthakis

Executive Editor.

During the last four decades or so we have witnessed 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 collapsed. Other socialist State models, i.e., Sweden, UK before Margaret Thatcher, and Venezuela recently have also collapsed. What we have now, however imperfect it maybe, is the economic model of the “Free Market.” This shift is occurring in parallel with two other socio-political expressions: 1. Smaller government, though i recent 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” this influences the development and distribution of technology and business / economic Knowledge while we keep the state’s interventions and control power at minimum.

Other short articles on this topic will follow

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.

Continue reading What is the real cost of the Greek crisis?