The Rise and Fall of Nations - A Greek Review

The Rise and Fall of Nations - A Greek Review

Much of Finance has been dominated by Greek alphabets such as Alpha (Abnormal returns, Beta (Market Returns), Theta and gamma (with relation to options). A surprisingly little of that is dedicated to recent history and case studies of countries (Noticeably Greece) and what made their economies poor performing.

If people take a close look at the rise and fall of modern economies, and steer away from the factors / mistakes made, it will be much more useful compared to forecasting what is largely unknowable.

The economic failure of Greece cannot be directly extrapolated to the US economy. Greece noticeably has very different soil, industries and productive capacity, tax regulation and collection, as well as macroeconomic policy compared to the US. Japan is another particular interesting case study which had a lost decade which I will want to read up on.

Looking at the Greece situation made me partially relieved that Singapore is probably not in dire states compared to the much worse off nations. Despite sharing shortages of natural resources and having industrial and geographical similarities to Greece, Singapore has reasonable control over its macroeconomic policies (managed float exchange rate), strong policy execution and has firm surpluses as a margin of safety to tide over unforeseen outcomes. As talent mobility increased over time, Singapore also noticeably tried to retain local talents and attract talented people from overseas to stem the outward brain drain, which is often criticized but essential to build up the talent pool.

Although I might draw criticism from (potential?) Greek readers with this video, I think it is refreshing to accept the fact that vote-friendly policies can turn up to be wrong, and designing the wrong incentives and policies can shape human behavior to pursue horrible outcomes. Singapore’s economic miracle is nonetheless correlated to the wealth and affluence of upstream trade partners and the velocity of financial and trade flows.

AS companies are reporting their quarterly / half yearly earnings and Singapore is nearing the end of the <circuit breaker>, it might be good to re-assess 2020 BC (Before Covid) vs the 2020 AC (After Covid) changes and whether the changes are permanent. Until them, I will be re-looking out for any interesting opportunities that may emerge. 


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