Inward and outward FDI and the shadow economy during the Greek Economic Crisis

Abstract

The purpose of the paper is to discover the bearing of inward and outward FDI and the shadow economy on the Greek Economic Crisis (GREC) in reviving the shattered economy. Students and researchers of the global economic crisis will benefit from this novel approach in exploring the GREC from the inward and outward FDI and the shadow economy perspective. The paper establishes that inward and outward FDI and FDI stock as a percentage of GDP, after a substantial period of ups-and-downs, was on the road to recovery as the economy was coming out from the crisis. The shadow economy in Greece exhibits a paradoxical evolution, as it substantially declined due to the sharp reduction in incomes that reduced the demand for activities in the shadow economy. Economic policymakers need to exploit the recovery of inward and outward FDI and this once in a lifetime opportunity of the substantial reduction of the shadow economy.