From: han@anadolu.michigan.com (hasan.b.mutlu)
Newsgroups: soc.culture.turkish,talk.politics.mideast,talk.politics.soviet,soc.culture.soviet,soc.culture.greek,soc.culture.europe
Subject: No Wonder The Greek Economy Is In Shambles, 'Skartsis.'
Date: 3 Apr 92 06:04:00 GMT


<1992Apr2.170015.19423@wuche2.wustl.edu>
ls0823@wuche1.wustl.edu

>Great, now I have to answer that!

Be my guest.

>Listen, I have no intention of starting a dialog with you; by selecting
>my sources and inflating or deflating their information I can prove that
>Burundi is more advanced than Sweden.

So you seem to be labeling 'Krugman' and 'Obstfeld' as liars? How 
about 'Frederic Mishkin?' Can you provide any examples of lying
by them in the past? 

>Anyway, I just answer here because the topic is kind of interesting...

Agreed.

>I have been watching the OECD reports  regarding income adj. for PPP
>(purchasing power parity) for years; for 1990 that of Greece was
>near $6900 and that of Turkey $4200 (remember "in the same category"
>could mean that one is half than the other). However, there are two
>things to be pointed out:

Which one: 'Absolute Purchasing Power Parity' or 'Relative Purchasing
Power Parity?' Clearly, Absolute PPP --> Relative PPP but not vice versa.

>(i) everybody knows that the economic numbers for Greece don't mean much 
>because this country, together with Taiwan, have the LARGEST "hidden" economies
>on earth - both amounting to about 50% of their GNP (nothing to be proud
>of , of course, as such). 

You must be from 'USC Finance.' This only impacts the behavior of 
the currency-checkable deposits ratio (C/D) in the money supply model. 
There is a positive association between illegal activity and the 
currency-checkable deposits ratio. That's all.

>I don't know how much you know about economics (apparently not much) but

Please don't make me laugh.

>let me note that recently Italy ADJUSTED its GNP for its "hidden"
>economy (and .. suddenly became richer than UK) ; 

What a joker? In this country, for instance, supporting evidence is
the current huge flow of currency into the south Florida region,
the major center for illegal drug importing in the United States.
Other illegal activities - prostitution, black markets, gambling,
loan sharking, fencing of stolen goods, the employment of illegal
aliens, etc. - also could be the source of higher currency-checkable
deposit ratio. But, it has no impact on the demand side of the equation.

>there are some voices 
>inside and outside Greece that are pressing
>for a similar adjustment of the greek economic numbers, so that Greece
>will stop ... pretending that is that poor and (I'd say) stop expecting
>... more money from EEC!  

No wonder Greek economy is in shambles. Because the wealth elasticity
of time deposits is much higher than for either currency or checkable 
deposits as wealth grows, the demand for time deposits will grow at
a faster rate than the demand for checkable deposits, so (T/D) is 
positively related to wealth. And the time deposits are not 
considered as part of the 'hidden' economy. Got it?

>By the way the turkish "hidden" economy is only about 5% (If I remember well);
>this is to your credit of course.

Means 'nil' in terms of wealth.

>(ii) the adjustment in terms of PPP is very controversial; how the hell can
>you take into account all the price, taxes etc. factors which are vastly
>different in different countries? I remember that in PPP Hungary is in the
>same level with Mexico! Have you been in Hungary and Mexico? Any comparison
>is obviously a joke!

That is the result of 'not' using relative PPP.

>Anyway , the GDP per capita (not PPP, the real one) 
>of Greece in 1989 was $5300 and that of Turkey $1300; in 1990 they were
>$6900 and $1700 respectively (Turkey is doing well in its macroeconomic

Wake up and smell the Turkish coffee; the GDP per capita (or GNP for
that matter) is not a reliable indicator of the wealth. In constructing 
a reference commodity basket to measure purchasing power, it is 
therefore likely that the Italian government will put a relatively
high weight on olive oil, the Japanese government a high weight
on sushi, and the French government a high weight on croissants.
Sank in?

>figures with the exception of inflation which is at an incredible 70%;
>again, with the exception of the latter, to their credit).

You have a lot to learn. In certain economies, like Turkish economy, a 
high inflation rate, associated with a high GNP growth rate, is considered 
a sound economic policy if it can be achieved through an expansionary 
monetary policy. 

>Anybody who is interested check things like people per doctor & hospital bed,
>infant mortality, illiteracy, people per car, TV, etc., drinking water
>availability, life expectancy, percentage enrolled in universities and
>anything else defines a country's development; the difference between 
>Greece and Turkey is vast, surprisingly so, even considering the GDP numbers;
>I truly wish it were not - I believe we would be better neighbors then! 

Enjoy it.

Source: 'World Development Report: 1990'

	"Data On The Turkish Economy"

1. Average annual growth rate of GNP per capita: 9.6%
2. Average annual energy production growth rate: 8.9%
3. Share of Education: 18.1%
4. Share of Economic Services: 22.1%
5. Average annual growth rate of exports: 15.3%
6. Average annual growth rate of imports: 10.3%
7. Share of 0-14 years old in population: 35.4%
8. Share of 15-64 years old in population: 60.3%
9. Crude birth rate per thousand population: 30
10. Crude death rate per thousand population: 8
11. Average annual growth rate of urban population: 3.4% 
12. Urban population as a share of total population: 47%
13. Government budget deficit as share of GNP: -4.0%
14. Energy consumption per capita: 822 kg. of oil equivalent.
15. Life expectancy at birth: 64 years
16. ...

Source: 'United Nations, Human Development Report,' 1990.

Annual Output Per Person in Dollars Adjusted to Purchasing Power
Parity: Turkiye, Greece and Chile are in the same category. That
is, $3,000 - $5,999. 

Source: 'International Economics: Theory and Policy' by Paul R.
        Krugman and Maurice Obstfeld, Harper Collins Publishers,
        1991, (second edition).

In terms of 'Annual Output Per Person in Dollars Adjusted to 
Purchasing Power Parity,' Greece is in the same category with 
Turkiye.

>P.S. 1 I hate to make such comparisons (it doesn't mean much, anyway)
>but I was provoked! Besides it is
>interesting in general, isn't it?

Just loved it.
 
>P.S. 2 Why the hell do you guys keep putting our names in brackets? Is it
>a way to be ironic , rude, or what?

Give yourself a mental quiz once in a while to see how much you 
remember.

Hasan B-) Mutlu

                     'Kill Turks and Kurds wherever you find them 
                      and in whatever circumstances you find them. 
                      Turkish children also should be killed as 
                      they form a danger to the Armenian nation.' 
                                     (Hamparsum Boyadjian - 1914)
Newsgroups: soc.culture.turkish