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Moscow

World economy 17th March 2014

Russia, an Italy with 8,500 atomic bombs

WASHINGTON | By Pablo Pardo | According to the IMF, Russia and Italy have about the same nominal GDP, though, if you adjust it to its purchase parity power, the Russian economy may be 50% greater than Italian. Still, Russia has two and a half times the population of Italy, which explains why its nominal GDP per capita is half of Spain’s (even in real terms, Spaniards are 60 percent richer than Russians). So, Vladimir Putin has managed to achieve for its country a global importance that, taking its economy into account, it does not deserve.

No Picture

World economy 14th March 2014

Why Monetary Expansion Is Not Enough

MADRID | By Luis Arroyo | Journalist Paul Krugman recently published an illuminating article by Samuelson about the (in)efficiency of the monetary expansion by its own when the liquidity trap has been reached. It is a very clear explanation about the problem of the money: central banks don’t create money if banks don’t want to give credit.

China Picking the Low Hanging Fruit of Reform

World economy 11th March 2014

China: Omnipresent Scarcity

China is reaching a crucial point in which both the Communist Party and the citizens must define what they want to be and in which direction they want to move. The human costs of three decades of rampant growth are huge and the country is facing pressing challenges such as environmental pollution, deep social inequalities and weak employment opportunities. It may be time for China to start figuring out the puzzle of allocating resources in a country of 1.3 billion people.

chinesedraak

World economy 8th March 2014

China: Eyes on the Prize

BEIJING | By Andy Xie via Caixin | Poor economic data in China will make the short-sighted howl, but policymakers know it is really a sign of rebalancing – and raising per capita incomes.

No Picture

World economy 6th March 2014

Inflation indexing and Bitcoin rhetoric

FRANKFURT | By Dr. Beate Reszat | The other day, the New York Times provided us with an example of how fads and fashions can be used to draw attention to, and win acceptance for, an economic argument. In his article ‘In Search of a Stable Electronic Currency’ Nobel laureate Robert Shiller proposed the introduction of an inflation-indexed unit of account similar to the Chilean unit of development or unidad de foment (UF) which is existing since the 1960s. The article is in large parts a summary of the ideas of an academic paper the author published in 1998. In short, its main argument says that recent progress in computer technology has considerably widened the possibilities of inflation indexing which would allow for a better pricing, contracting and risk management in an economy.

No Picture

World economy 6th March 2014

Beige Book, Gray Economy

WASHINGTON | By Pablo Pardo | Federal Reserve’s Beige Book is like a breeze of fresh air for those who think that economic analysis relies too much on data and math. The famous Book is made just by using non-systematic, non-quantitative inputs. Maybe that is not too effective to estimate until the last decimal the future evolution of the GDP deflator, but it is extremely precise to determine the current state of affairs of the economy.

No Picture

World economy 4th March 2014

The FOMC Board: Secrecy and Obscurantism Do Not Make for Good Democracy

SAO PAULO | Guest post by Benjamin Cole at Historinhas | No serious democrat contends that obscurantism, opacity and secrecy are handmaidens of good government. Indeed, closed doors are properly and universally regarded as cardinal sins, while transparency and accountability as gateways to working democracies. Yet the public is barred from meetings of the most powerful economic policymaking body in the United States—the Federal Open Market Committee, the decision-making body of the Federal Reserve Board, wherein monetary policy is decided.