The Greek economic crisis, is, among other things, a crisis of confidence. Investors, worried about the country's finances, pulled out their capital, and in doing so drove up interest rates and drove down the Greek economy to a near depression, provoking the default they so feared. Economists call this reversal of capital flows "a sudden stop." It is a vulnerability shared by all countries that have to borrow in a foreign currency, which effectively describes the Euro from Greece's perspective. ...
The Greek economic crisis, is, among other things, a crisis of confidence. Investors, worried about the country's finances, pulled out their capital, and in doing so drove up interest rates and drove down the Greek economy to a near depression, provoking the default they so feared. Economists call this reversal of capital flows "a sudden stop." It is a vulnerability shared by all countries that have to borrow in a foreign currency, which effectively describes the Euro from Greece's perspective. ...
Share this Article
Recommended