Category Archives: Economics in Brief

Some Good News About The COVID-19 Pandemic

Email by Peter Diamandis
Greek American engineer, physician, and entrepreneur best known for being founder and chairman of the X Prize Foundation,  co-founder and executive chairman of Singularity University and coauthor of The New York Times bestsellers Abundance: The Future Is Better Than You Think and BOLD: How to Go Big, Create Wealth, and Impact the World. He is former CEO and cofounder of the Zero Gravity Corporation, cofounder and vice chairman of Space Adventures Ltd., founder and chairman of the Rocket Racing League, cofounder of the International Space University, cofounder of Planetary Resources, founder of Students for the Exploration and Development of Space, vice chairman and cofounder of Human Longevity, Inc.[2]

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Here is an email sent to me with encouraging news on the Coronavirus pandemic. This information is entirely Dr. Diamandis’ content sent to me and I thought it to be of interest to the visitors / readers of the Business Thinker, LLC .

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How about some good news for a change?

There have been A LOT of facts going around regarding COVID-19, and a flurry of “positive news” items to lift our spirits.

Here are a number of major victories from the Pandemic line. I’ve had my team fact-check these wins with links you can follow up on.

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An Economic Model

Dr. John Psarouthakis
Executive Editor

This is the introduction of a paper of mine published in a related journal that I will post in the Business Thinker when that can be done. The title of this article is “An Economic Model of Government Expenditures and Economic Development” The journal is Economics and Finance Notes.

The economy is a complex system in which firms, households  and government interact to determine the process of wealth creation and,ultimately, the economic well-being of the nation. Economic theory has traditionally focused on the analysis of each subsystem (firms, households and government), however it has created a high controversy in the study of the complete system behavior, as well as the relevant role of the government in the macroeconomic context. Despite this controversy, firms and governments share certain objectives. Both are social organizations created to add value for stakeholders and voters through, at least, reducing transaction costs in the economy.

Poor performance of governments tend to generate negative externalities for the economy (or higher transaction costs) that are reflected in macroeconomic variables such as output, involuntary unemployment, slowdown of profitability and capital creation and/or utilization, and increase in inflation. In other words, the economic performance of the overall system depends significantly on the government involvement needed to reduce transaction costs given the characteristics of the economy.

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Artificial Intelligence in Banking

Dr. Periklis Gogas


Professor, Dr. Periklis Gogas 
 

 

 

Anna Agrapetidou, Ph.D. Candidate

 

Professor, Dr. Theophilos Papadimitriou,

 

                                 Department of Economics  

                   DEMOCRITUS UNIVERSITY OF THRACE

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 The problem

The health and stability of the banking sector is crucial in modern economies. Failures of systemically important financial institutions and generalized distress in even less significant banks can propagate to the whole sector very fast. These issues of distress, if not addressed swiftly and directly by the regulators (usually the central banks to associated specialized entities) may lead to wide-spread full economic crises and even international financial crises.

The U.S. banking sector

From 2000 to 2018 the total number of banking institutions in the U.S. decreased from 9,904 to 5,406 (more than 40%). This significant decline was the result of: a) an increased number of bank failures (more than 500 banks went bankrupt), b) a lack of new financial institutions entering the U.S. banking sector and c) a consolidation process through mergers and acquisitions. The financial crisis of 2007 highlighted the systemic effects of a banking crisis propagated in national (to other sectors of the U.S. economy) and international level (to other national economies around the world). Moreover, it raised serious concerns on the appropriate regulatory policies in effect and led to significant supervisory and regulatory reforms in an international scale (the Dodd-Frank Act and Basel III). Banking institutions are supervised, and their performance is monitored and evaluated by regulatory authorities through i) periodic stress testing, ii) the imposition of minimum capital requirements (Basel III), and iii) the implementation of prompt mandatory corrective actions when their financial position deteriorates significantly.

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