Does the Fed Follow Its Own Rules?

By Daniel Fernández on May 22, 2017

One of the most interesting discussions in the field of monetary theory concerns the role central banks play in the economy. There are multiple views regarding different issues: from questioning the mere existence of the central bank to the actual role a central bank should take.

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Cheap Oil and Why OPEC Can’t Do Anything About It

By Edgar Ortiz on May 4, 2017

Beyond the behavior of speculators or OPEC—which some consider a cartel, if there is anything we can learn is that the fall in oil prices responds to the forces of supply and demand. On the demand side, lower economic activity throughout the world, specially in China, has lowered the price of oil. Projections by the International Energy Agency show how demand weakened in 2014, although it rebounded in 2016.

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Beyond the Bitcoin Hype: Limitations of Bitcoin and Blockchain Technology

By Olav Dirkmaat on May 1, 2017

A lot has been written about the benefits of cryptocurrencies such as Bitcoin and blockchain technology. Blockchain technology will no doubt revolutionize the world. It should be no coincidence that one of our recent guests to Universidad Francisco Marroquín, Nick Szabo, has labeled blockchain technology “the Napster of finance.” While recognizing the value of cryptocurrencies and blockchain technology,

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Mexico’s Complex Investment Panorama

By Jorge Eduardo García García on April 19, 2017

Mexico is going through a complex scenario, both in its internal and external environment. Last year was one of the most complicated ones for the Mexican peso. And things remain unclear for 2017: external factors influenced mainly by the US electoral process and its outcome have compromised Mexico’s economic performance.

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Are Oil Prices to Blame for the Venezuelan Crisis?

By Daniel Fernández on April 19, 2017

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.

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Correa’s Ecuador Versus Peru

By Edgar Ortiz on March 29, 2017

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?

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The Poor Economic Criterion for a Remittance Tax

By Estefanía Luján Padilla on March 23, 2017

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.

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The Astonishing Differences Between Spain’s 1993 and 2007 Crises

By Daniel Fernández on March 15, 2017

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.

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This Is What Businesses Are Doing with Record Corporate Debt

By Olav Dirkmaat on March 13, 2017

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.

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Understanding the Surplus

By Jorge Eduardo García García on January 26, 2017

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).

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