The financial markets have reacted frantically to Russia’s invasion of Crimea – the rouble has weakened despite the Central Bank of Russia intervening massively to prop it up, share prices on the Moscow stock exchange have collapsed and there are reports of significant capital flight from Russia. The West has decided on a travel ban … Read more
Crimea yesterday voted to rejoin Russia and the West vowed to retaliate by initially imposing sanctions on a select group of Russian officials, assets and bank accounts. It’s anyone’s guess what the second phase of sanctions might look like. No matter the details, the US and Europe can’t reverse what appears to be an overwhelmingly … Read more
For a year, President Xi Jinping and Premier Li Keqiang have talked about the Chinese dream, while outlining massive reforms to pave the way for the realization of the dream. As the Two Sessions took place in Beijing, China’s leaders took a hard look at the challenges ahead. Is the Chinese dream still reachable? After … Read more
How many times since the start of the Great Recession have you heard a story like this one, from USA Today? Heather Rolley’s primary occupation is motherhood, but it doesn’t pay the bills. So most days, after she takes her daughter and two sons to school, the 36-year-old divorcee heads to work. Some days it’s … Read more
Only a year ago, Nigeria’s BRIC future still seemed reachable. Today, domestic threats are increasing, while the international environment is far more challenging. A decade ago, Goldman Sachs’s BRIC analysts included Nigeria among the potential BRIC successor economies. A few years later, the government released its transformation agenda, aimed at making Nigeria one of the … Read more
In my recent seminars at US universities, Brazil’s disappointing growth in the last three years (2.7% in 2011, 1.0% in 2012 and 2.3% in 2013) have often been a surprise to many. Apparently, the good years of 2003-2010, in which Brazil grew an average of 4% per year, created the idea that Brazil was not … Read more
One of the concerns that inflation hawks continue to discuss is the potential for trouble when banks start lending out all that liquidity that’s sitting on their balance sheets. At that point, we’re told, inflation will return with a vengeance and the Fed’s great monetary stimulus will become a burden. But inflation remains subdued, with … Read more
Here’s one simple chart which illustrates why I think Japan style deflation is now more or less inevitable in Spain. Curiously it comes from the Ministry of Employment and illustrates the relation between the movement in average wages caused by actual movements in the real wage and those caused by what is known as the … Read more
On February 15 The Economist printed an interesting article about Argentina: “The tragedy of Argentina. A century of decline” with the subtitle, “One hundred years ago Argentina was the future. What went wrong?” As usual in that magazine, it is a nicely written article. But it is not, in my view, an accurate interpretation of … Read more
What a convoluted title! Still, the lack of formal elegance might just be compensated for by its communicative efficacy. The aim of the above header is to link two names in people’s minds, both of them Italian: Mario Draghi and Matteo Renzi. Naturally the idea is not original, the FT’s Peter Spiegel recently published an … Read more