The Evolution of the Greek Economy | springerprofessional.de

Springer Professional

Top

2020 | Book

Read chapter Read first chapter

The Evolution of the Greek Economy

Past Challenges and Future Approaches

Authors: Prof. Panagiotis E. Petrakis, Pantelis C. Kostis

Publisher: Springer International Publishing

Book Series : The Political Economy of Greek Growth up to 2030

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Login to get access

About this book

This book assesses the current state of the Greek economy and detects its development and growth prospects up to 2030. The analysis begins with 19th century Greece, addressing the repeated defaults that led to the formation of a dependent state, and the failed modernizing attempts. Then the book addresses current geostrategic dimensions as well as the current structure of institutions and culture in Greece. The second part presents the evolution of sustainability, governance, and inclusivity, as well as the evolution of culture in Greek society and insights into the production prototype. The third part of the book looks forward to what lays ahead for Greece up to 2030. It presents the theoretical background for two scenarios: the normal scenario (business as usual, including the effects of the recent Covid-19 pandemic) and the optimal scenario (a pro-growth scenario including increases of Total Factor Productivity through structural reforms). In presenting these scenarios, the book discusses issues ranging from a comparative analysis between Greece and the Eurozone, the developments in output gap and potential output, public debt, competitiveness, basic macroeconomic variables, a detailed analysis on investments, and inclusive growth.

Advertisement

Table of Contents

Frontmatter

The Evolution of Economic History, Institutions and Cultural Background

Frontmatter

Chapter 1. A Brief Economic History of Repeated Defaults

Abstract

The history of modern Greece can be described as an economic history of defaults episodes closely related to its external indebtedness. This chapter presents the four defaults that make Greece a dependent state throughout its recent history: (1) The default of 1826, in the midst of the Greek Independence War. (2) The defaults of the periods 1837–1838 and 1843–1844. (3) The default of 1893, which coincided with the current crisis which plagued the poorly diversified Greek economy. (4) The default of 1932 just a few months after the wake of the 1931 banking crisis. On these events the (unacknowledged) default of 2010–2012, again in the aftermath of the US 2007–2008 subprime crisis could be added.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 2. The Institutional Evolution and the Failed Modernizing Attempts

Abstract

The chapter presents the institutional evolution in the Greek economy. Moreover, the Greek economy has been a small open economy since the formation of the Greek state in the 1830s. Hence, the external political and economic relationships have always been a significant part of its history. The Great Powers and their role in Greek political affairs did not just lay the foundations of a dependent state. They also defined, to some degree, the alternative paths and the future course of the Greek state toward modernization. Thus, secondly this chapter presents the attempt to modernize the Greek economy during the nineteenth and the twentieth century. The development of hierarchies in historical perspective is presented as well as the non-diversification of investment and production.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 3. The Geostrategical Settings and the Systemic Risks

Abstract

This chapter aims to present the Greek economy in the context of geostrategic developments in the wider region of Southeastern Europe. The production system of the Greek economy operates in an international environment. In this context the concept of National Power has an important priority, because it ultimately determines the terms of the game at the global level and in the background the terms of international exchange. At the same time, it is particularly useful to detect the systemic risks that the Greek economy faces over time and which have determined to a significant extent the productive model of the economy and the behavior of Greek society. Finally, some facts regarding the pandemic of Covid-19 are presented and the global and domestic consequences are discussed.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 4. The Formation of Idiosyncratic Structure of Institutions and Culture

Abstract

Optimal growth requires pro-growth institutions and culture. In an optimal growth pattern, institutions, and culture facilitate entrepreneurship and innovation. In contrast, if the development and coevolution of institutions and culture are distorted, growth can become permanently stagnant, with a distorted creative destruction process causing weak entrepreneurship and innovation activity. Policy-makers should, therefore, plan and implement pro-growth structural changes to institutions and culture that account for their coevolution process. Otherwise, imported growth (i.e., incoming capital flows or innovation) must be relied upon to form an exogenous pro-growth prototype that promotes growth, entrepreneurship, and innovation. This chapter presents the idiosyncratic institutions and cultural traits and the formation of a stagnated growth prototype in the Greek economy.

Panagiotis E. Petrakis, Pantelis C. Kostis

The Evolution of Sustainability, Governance, Inclusivity, Culture and Economic Growth in the Greek Economy

Frontmatter

Chapter 5. Sustainable Development

Abstract

Sustainable Development is not only aimed at solving pre-existing problems but also at reshaping the economic and social system. Specifically, Sustainable Development seeks to meet the needs of modern (and future) generations without jeopardizing the ability of future generations to meet their own needs. Obviously, the Covid-19 crisis has come to change the priorities of human society by putting health issues first. In this chapter the focus is on matters concerning the environment, renewable energy sources, and natural resources and formerly on population evolution, recognizing the role of epidemics/pandemics as black swans in the operation of the economic system. So, the chapter presents the above factors for Greece, thereby highlighting opportunities and threats.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 6. Sustainable Governance

Abstract

The changes in the international economic system and in geopolitical power relations over the last decades have had a decisive impact on the ways in which states are now involved in shaping the economy. The globalization of markets, special competitions, the Covid-19 pandemic, new environmental and regional challenges, as well as the divisions emerging at socioeconomic and cultural level, redefine the role of the state. This chapter aims to present the quality and sustainability of governance in Greece, highlighting many of the weaknesses that characterize it. A good effort to measure the quality of governance is the World Governance Indicators formulated by the World Bank. The quality of political institutions has a significant impact on economic growth.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 7. Inclusivity

Abstract

Despite the increase in prosperity and wealth for most economies, there have been a number of problems that prevent inclusivity in terms of exploiting opportunities by all. In most developed economies there are issues related to high-income disparities, to reduction of the size of the middle class, to non-equal opportunities between men and women, to access to education, etc. The Covid-19 crisis has intensified several of these trends. This chapter presents issues related to the issue of inclusivity in Greek society, in particular compared to the EU-28 average, which relate to labor market conditions, issues related to income distribution and observed inequalities, the level of poverty, and the quality of education. Lastly, the way the Covid-19 pandemic affects some aspects of inclusivity is presented.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 8. Human Behaviors

Abstract

The cultural dimensions and social psychological stereotypes are the cognitive constructs that link the past to the present and determine the future. In this chapter the cultural evolution of the Greek society is presented, as one of the most critical factors that have affected the responses to the crisis, but not adequately enough emphasized in the economic policy that was undertaken to confront the crisis. The key developments that are observed and related to the Greek social environment and related to the quality of life of Greeks are presented, as well as the political trends and the economic behavior of Greek society, and the trend towards loss-aversion behaviors. Lastly, the effects of Covid-19 pandemic on human behaviors are presented.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 9. Growth in the Greek Economy

Abstract

This chapter seeks to present a clear picture of how the Greek economy has been developed up to 2019. The analysis includes critical issues that have severely affected the Greek economy, such as the internal and external balances, the evolution of structural reforms, the competitiveness, the investments, the banking system, the credit system, the entrepreneurship development, the issue of the debt, and the overburden of taxation. These developments are expected to significantly change the image of growth in the Greek economy and the image of growth accounting up to 2030. Moreover, the channels through which the Covid-19 pandemic affects the Greek economic system in the short- and the long-term are presented.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 10. Insights of the Production Prototype Change During the Crisis (2008–2018)

Abstract

This chapter attempts an initial investigation into whether and how the country’s productive model changed during the economic crisis (2008–2018). The chapter also attempts to highlight the problem related to the productive structure of the Greek economy and the fact that no significant differentiation in production is achieved, with the result that there is a need to change the production model. This was highlighted by the emergence of the Covid-19 pandemic and its impact on economic production Lastly, the chapter presents short-run effects of the Covid-19 pandemic on the gross value added of the economic sectors of the economy.

Panagiotis E. Petrakis, Pantelis C. Kostis

The Long-Term Evolution of the Greek Economy

Frontmatter

Chapter 11. The Requirements for a Pro-growth Long-Term View

Abstract

The purpose of this chapter is to set the background to capture the estimations concerning the Greek economy in the period from 2020 to 2030. Thus, the chapter presents the need for institutional and cultural changes in order for an economy to transform an idiosyncratic, interrelated with stagnated characteristics, model into an optimal pro-growth model, with direct reference to the Greek economy. Moreover, the relationship between TFP and structural reforms in the case of the Greek economy until 2019 and the effect of the reforms on the country’s GDP are presented. Besides, the Normal Scenario (business as usual) and an Optimal Pro-Growth Scenario for the Greek economy for the period from 2020 to 2030 are described.

Panagiotis E. Petrakis, Pantelis C. Kostis

Chapter 12. The Long-Term View of the Greek Economy Under the Normal and the Optimal Pro-growth Scenario: 2020–2030

Abstract

This chapter provides an overview of the expected development for a number of macroeconomic figures up to 2030. For this purpose, the relevant developments for two scenarios are described: The Normal Scenario (business as usual) and the Optimal Scenario (pro-growth scenario). In addition, the aim of the chapter is to highlight the role of structural reforms in the implementation of a pro-growth scenario. Besides, the expected developments in the Greek economy until 2030 for the two scenarios are presented for variables such as GDP and other basic macroeconomic variables, potential output and output gap, public debt, competitiveness, investments and inclusive growth.

Panagiotis E. Petrakis, Pantelis C. Kostis

Backmatter

Title: The Evolution of the Greek Economy
Authors: Prof. Panagiotis E. Petrakis
Pantelis C. Kostis
Copyright Year: 2020
Publisher: Springer International Publishing
Electronic ISBN: 978-3-030-47210-8
Print ISBN: 978-3-030-47209-2
DOI: https://doi.org/10.1007/978-3-030-47210-8