The Mismanagement of the Greek Economy and Some Contrast with Korea

Abstract

During the recent global financial crisis, Greece has been the target of much attention as its economy found itself at the brink of total collapse and needed much intervention from IMF and the EU to survive. Many changes took place in this country in the last few years, mainly as its international lenders requested to the Greek governments to rationalize and better manage its economy and society. In April 2014, Greece was able again to borrow from free markets in order to fulfil its financial commitments. In this brief paper we can pinpoint at the main issues responsible for Greeces mismanagement of its economy since the 1980s. In order to carry out our analysis we first need to succinctly suggest a couple of scenarios which theoretically can serve as the basis for our arguments. In the first scenario, we initially have a sudden increase in employment by arbitrary hiring people in the unproductive public sector; this leads to a decrease or deceleration of labor productivity. Consequently, prices and interest rates increase which in turn cause a decrease or deceleration in investment.