Wednesday, September 27, 2006

But what does this do to Cobb-Douglas?

by Ken Houghton

The problem:
Under pressure from the European Union to cut its deficits

and its "thinking outside the box" (no pun intended, no cliche left unturned) solution:
Greece is revising its gross domestic product to include part of the booming black economy, boosting its output by at least 10 percent in 2006, the country's chief statistician told Reuters.

So what does this mean?
"The revised GDP will include some money from illegal activities, such as money from cigarette and drinks smuggling, prostitution and money laundering," National Statistics Service chief Manolis Kontopyrakis said in an interview.

And how is it at least 10 percent?
Greece's economic output was 180 billion euros ($228 billion) in 2005 and is estimated at 194 billion euros this year, while the black economy is estimated at about 40-60 billion euros a year.

Looks like a potential for 20-30% to me; good thing they're starting with the low-hanging fruit.
Go E.U.!
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