Are Oil Prices to Blame for the Venezuelan Crisis?
Many analysts are venturing to link the crisis that plagues the Venezuelan economy with the fall in the price of crude oil. With oil being one of the most important commodity in Venezuelan production and the country’s main export product, it seems that the fall in the price would bring any country with an economic structure similar to Venezuela’s into a crisis. Similarly, many assume that the problems in Ecuador have the same root as those in Venezuela, although less pronounced.
Read MoreCorrea’s Ecuador Versus Peru
It seems that 2006 was a long time ago—the year when Rafael Correa was not yet president of Ecuador. Nevertheless, there was an Ecuador before him: a troubled country that had seven presidents in only 10 years. With elections just around the corner, what economic model will mostly benefit Ecuadorians?
Read MoreThe Poor Economic Criterion for a Remittance Tax
With the persistence of the new president of the United States to build a wall and his expectation to make Mexicans assume the cost, new creative initiatives to find a way to make them pay it are starting to emerge.
Read MoreThe Astonishing Differences Between Spain’s 1993 and 2007 Crises
It seems that the echoes of Spain’s Great Recession will never end. Despite the country’s strong growth for at least two years, the general feeling seems to be that of a country consumed by the resonance of its own misfortune.
Read MoreThis Is What Businesses Are Doing with Record Corporate Debt
Last year, non-financial companies issued $674.3 billion in corporate debt, a new record high. Low interest rates are wrecking the allocation of capital: the increase in debt is not used to invest, but rather to distribute cash to shareholders. However, there is one important caveat to this whole scheme that will threaten the U.S. economy.
Read MoreUnderstanding the Surplus
The main problem arises when a government deficit comes with a primary balance deficit. The primary balance is the difference between government revenue and expenses, without taking into account the cost of the debt (interests).
Read MoreWhy Didn’t the Depreciation of the Yen Help Exporters?
Why didn’t the depreciation of the yen help exporters? Primarily, because large exporters are also large importers.
Read MoreTrump’s Victory Confirms the Peso’s Weakness
As long as people are pessimistic about the future of the Mexican economy, the peso will continue to fall. It is still uncertain what Donald Trump’s government can and will do.
Read MoreSwitzerland as a Protection Against Uncertainty: A Problem for Its Domestic Market?
When it comes to the equity market, the Swiss Market Index (SMI) continues to trade 10% below the figure for 2007. Despite the economy’s strong growth since then, the multiples at which the shares are currently listed are lower from those of 2007.
Read MoreMexico’s Depreciated Peso and a Formula That Doesn’t Work
Mexico’s position and its depreciated currency is not unique in the world; since 2014 Japan has also lost about 28% of the yen’s value against the dollar and its exports have fallen around 10% since.
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