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Feb 17, 2012
Greece Debt/GDP: Austerity Versus Economic Growth
This chart from Der Spiegel shows in a great way how austerity can make the Debt/GDP ratio bigger(!). When more austerity in the future makes the economy of Greece contract even more, the debt ratio as a percentage gdp (given the debt remains the same) increases, while austerity is implemented to make the debt ratio decrease. This is why it is important the Troika (Europe+IMF) - which currently is about ruling the Greek government - needs to look at the trade-off between austerity and economic growth every time it evaluates the Greek economy.
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Keep continuing such educational speech and blogs. Many of the economist now got the idea behind Austerity Versus Economic Growth.
ReplyDeleteThey tend to lose control of their actions or procrastinate because they place greater importance (i.e., greater "weight") on the present and the near future than on the far future. This makes most people both irrational and unpredictable.guarantor loans
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