What Ever Happened to the Misery Index?

Remember the 1960s? The 1970s? Back then, inflation surged from one peak to another but failed to deliver the low unemployment rates promised by the Phillips curve. In fit of frustration, economist Arthur Okun invented what he called the misery index—the sum of the inflation and unemployment rates. As the following chart shows, those were […]

Increasingly Desperate Venezuela Makes Oil-for-Cash Deal With China

By Nick Cunningham: Venezuela is showing increasing signs of desperation as it takes out an additional $4 billion in loans from China in exchange for oil. The deal, announced July 21, will give embattled Venezuelan President Nicolas Maduro an immediate influx of cash, which he needs to keep the economy afloat. Average Venezuelans are suffering […]

Bitter Irony in Venezuela’s Oil Sector

In a bid to show members of Venezuelan society the age of Chavismo was alive and well, Venezuelan President Nicolas Maduro decided to rename one of the largest oil fields in the world after his mentor and former President Hugo Chavez. The Maduro administration might not last the year, however, suggesting the former president’s legacy […]

Venezuela’s Maduro Throws the Cargo Overboard After Taking a Poisonous Lesson From the Shah

The book of Jonah tells of ancient sailors threatened by a mysterious and terrible storm. In desperation, they throw their precious cargo into the sea in hopes of somehow saving their vessel. Time and again this same type of panic has likewise gripped those in positions of national leadership and time and again they have […]

Venezuelan Crisis Worsens: Water Twice as Expensive as Gasoline

Due to years of underinvestment in the water processing system, and a rich abundance of crude oil, water in Venezuela is now twice as expensive as gasoline. Residents in Caracas have become wary of tap water after it was discovered that Lake Mariposa, a reservoir that supplies tap water to 750,000 Venezuelans, has become seriously contaminated due […]

Venezuela and Iran: The End of The Affair?

Over his fourteen year reign, the late Venezuelan president Hugo Chávez developed strong political ties to Iran: visiting that country several times and hosting Iranian presidents on reciprocal visits. Since then, spring boarding off of these Venezuelan ties, Iran has spread its tendrils into Argentina, Bolivia, Ecuador, Nicaragua and Brazil. Yet with Chávez deceased, and […]

Venezuela on the Brink of Hyperinflation

The Central Bank of Venezuela recently reported an inflation rate for May of 6.9 6.1 percent, equivalent to an annualized rate of more than 100 percent. Does this mean that Venezuela is on the brink of hyperinflation? A quick look at the relevant economic concepts suggests that hyperinflation is in fact a real danger. What […]

Venezuelan President Maduro Offers Olive Branch to Washington

To say that U.S. relations with Venezuela’s former President Hugo Rafael Chávez grew increasingly strained would be an understatement. But Chávez succumbed to cancer on 5 March, and the winds of change are blowing through Caracas. Why was Chávez in Washington’s bad books? His choice of allies, which included the Russian Federation, Iran and Cuba, […]

Emerging Markets: What Has Changed?

This is what has changed in the EM space, in our view: 1) Brazil is hiking, but reluctantly 2) Turkey is cutting, and resolutely 3) China will further relax the FX trading band 4) Philippines will further relax FX trading limits 5) Korea announces a big stimulus package 6) Colombia announces a medium stimulus package […]

What to Expect from a Post-Chavez Venezuela

It’s unlikely that ailing Venezuelan President Hugo Chavez will return to power after missing his Thursday inauguration because of ongoing cancer treatment in Cuba. That leaves Vice President Nicolas Maduro in de facto power of a country that has moved further away from Washington and closer to rogue regimes like Syria and Iran. In the […]

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