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Interesting argument, and large scale trust issues are probably an important factor in economies. However, the examples from the article do not have too much to

by yk 14y ago

Interesting argument, and large scale trust issues are probably an important factor in economies. However, the examples from the article do not have too much to say about it, since Greece and Spain were rather dynamic economies before the financial crisis. World bank data of per capita GDP growth for Italy, Ireland, Greece, Spain and Portugal compared with Germany: http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_kd_zg&scale_y=lin&ind_y=false&rdim=region&idim=country:DEU:GRC:IRL:ITA:PRT:ESP&ifdim=region&tdim=true&tstart=994543200000&tend=1278540000000&hl=en_US&dl=en_US&ind=false http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&#...

danmaz74 14y ago
Keep in mind that Greece, Spain, Portugal and Ireland started from very low GDP per capita levels when they joined the EU and received quite a lot of net aids, access to rich markets and capital. That helps starting a growth cycle. It becomes more difficult to maintain it later, especially if that growth starts sustaining itself with a housing bubble (as it very often happens in booming times).
- yk 14y ago
  Yes, but then you can compare Greece and Portugal, both joined the Euro in about 2000, both have now a financial crisis and both have rather small businesses. But Greece did quite a bit better between 2002 - 2007 than Portugal, suggesting that size of business is not a very good indicator for overall economic health.
  - danmaz74 14y ago
    Agreed, it isn't a perfect predictor, but it is an interesting one.
  - tluyben2 14y ago
    How is Portugal doing now? I live in Spain for part of the year but I have an office in Portugal and my feeling is that they are listening to the demands from EU a lot more than Spain. Taxes rose all over and they cut spending across the board. In Spain nothing much changed (don't know about Greece?). Before this year, the news would say Greece falls, then Portugal; now they say Greece then Spain. Did it change? I cannot find news about it and I got tired of reading The Economist (you get tired of this OMG Euro OMG stuff when you live here...).
    - antman 14y ago
      Don't trust the economic press for future predictions. Most of the time they don't have access for information. Only if they do a post mortem when they have documents they might read them. If they don't have the facts giving something plausible to their readers is good enough.

by yk 14y ago

danmaz74 14y ago

Keep in mind that Greece, Spain, Portugal and Ireland started from very low GDP per capita levels when they joined the EU and received quite a lot of net aids, access to rich markets and capital. That helps starting a growth cycle. It becomes more difficult to maintain it later, especially if that growth starts sustaining itself with a housing bubble (as it very often happens in booming times).

yk 14y ago
Yes, but then you can compare Greece and Portugal, both joined the Euro in about 2000, both have now a financial crisis and both have rather small businesses. But Greece did quite a bit better between 2002 - 2007 than Portugal, suggesting that size of business is not a very good indicator for overall economic health.
- danmaz74 14y ago
  Agreed, it isn't a perfect predictor, but it is an interesting one.
- tluyben2 14y ago
  How is Portugal doing now? I live in Spain for part of the year but I have an office in Portugal and my feeling is that they are listening to the demands from EU a lot more than Spain. Taxes rose all over and they cut spending across the board. In Spain nothing much changed (don't know about Greece?). Before this year, the news would say Greece falls, then Portugal; now they say Greece then Spain. Did it change? I cannot find news about it and I got tired of reading The Economist (you get tired of this OMG Euro OMG stuff when you live here...).
  - antman 14y ago
    Don't trust the economic press for future predictions. Most of the time they don't have access for information. Only if they do a post mortem when they have documents they might read them. If they don't have the facts giving something plausible to their readers is good enough.