Question

Turnitin Assignment World Economic Forum To demonstrate an understanding of the root causes of the current economic downturn. Requirement: Start by naming the country and the time period. Your first sentence should be something like this: "This macroeconomic research paper will cover (name your country of choice) during the years (list your time period)." Write a detailed description of the root causes of the economic downturn. Remember economic downturns are usually thought of as recessions because these are the most common, but may also include periods of severe (hyper) inflation or stagflation (a simultaneous increase in unemployment and inflation). • Within the discussion, please relate the root causes to either market failure or government failure or both. You must include a section (at least 2-3 paragraphs) about how market failure and/or government failure played a role. Submit a report that is 1-3 pages long, typed double- spaced. This report should be well written with an introduction and conclusion and use the appropriate citations.

can you right me a report about Greece debt crisis during the time period of 1974 to 1978 that meets these requirements?

Answer 1

Greece encountered something like an economic boom post World War -2, as its economy shifted away from an agrarian to an industrial one. But after the downfall of a military regime in the 1970s, the economy started to struggle again .

Prices were skyrocketing-The end of the military regime sent the nation into an inflationary spiral. Between 1973 & 1993,high inflation wrecked the economy, averaging approximately 18 per cent annually.

Government debts swelled-The government attempted to kickstart the economy with deficit expenditure policies.

As a outcome, Greece’s borrowing expenses were excessively high- This made sense as investors desired to be compensated for the high inflation & default risks of loaning to Greece. On the eve of Greece’s acceptance into the euro zone, its borrowing expenses were starkly greater than the other members of the union.

Before becoming a part of the Eurozone in 2001, Greece’s economy was plagued by many problems. Throughout the 1980s the Greek government employed expansionary fiscal & monetary strategies. But, rather than fortifying the economy, the nation suffered soaring rates of inflation, high fiscal deficits & trade deficits, low rates of growth, and manifold exchange rate crises.

In this gloomy economic situation, joining the EMU appeared to offer some hope. The thought was that the monetary union assisted by the ECB would dampen inflation, aiding to lower down the nominal interest rates, thereby fostering private investment & encouraging economic growth. Furthermore, the single currency would eradicate several transaction expenses, leaving more funds for the debt reduction.

Whilst Greece was accepted into the EMU in 2001, it did so under fallacious pretences, as its debt & deficit were nowhere close to being within the Maastricht parameters .

Suddenly, Greece was recognized as a secure place to invest, which considerably lowered the rates of interest the Greek government was supposed to pay.

These lower rates of interest allowed Greece to borrow at a much lower rate than before 2001, driving an augmentation in spending. Whilst assisting to foster economic growth for a many years, the nation still hadn’t tackled its deep-seated fiscal issues which, contrary to what some might believe, weren’t primarily the outcome of excessive spending.

Basically, Greece’s fiscal issues stem from a dearth of revenue. Much of this dearth of revenue is the outcome of systematic taxation evasion. Usually self-employed, wealthier employees tended to under-report earnings whilst over-reporting debt outflows. The global downturn (2007) served to enfeeble Greece’s already measly tax revenues which caused the shorflall to worsen.