Thursday, February 9, 2012

Greece seems to have a negative Keynesian Multiplier...This will not end well for them...See chart here

Source: Spegiel via Chartporn
Greece has borrowed a considerable sum of money (relative to their National Income (GDP)) but their output (GDP) has suffered a significant decline.  If you borrow money and your GDP remains stable or increases marginally, then you can/could claim that the borrowing helped.

But if you (Greece) borrow and your GDP continues a steep decline, then you are in trouble...
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