After learning how to use twitpic I started posting some charts there, but I consider the following chart to be extremely important and to go some way into explaining the gross fixed capital formation shortfall witnessed in Greece.
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| source: AMECO |
Loads of factors are cited as potent to explain capital productivity differentials, but I think that one of them outshines them all and is particularly fitting in Greece's case: the degree that the state interferes in the product markets along with the regulatory framework.
As I have repeatedly pledged fairness in what I write here, I have to say that there is a sector where relevant gross fixed capital formation helps Greece rank higher than some of its EU counterparts: investments in dwellings.
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| source: AMECO |
Notice that levels (as a %) of gross fixed capital formation in dwellings similar to that of Greece in the 70s and 80s were recorded in Ireland during the 00s when the country was in a property bubble. I know that Greece experienced an incredible wave of urbanization during the 70s and 80s but high CPI ( along with other factors) made sure that this was the only kind of investment boom that the country experienced back then...
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