tag:blogger.com,1999:blog-62203642011-04-21T16:23:53.822-04:00Economics, History, Politics, and Random Thoughts.Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.comBlogger1891100tag:blogger.com,1999:blog-6220364.post-1126360057221868402005-09-10T09:39:00.000-04:002005-09-10T09:47:37.226-04:00

Will be political. "Impeach Bush" is the number one search on Technorati...and take a look at the blogpulse trend.I can't imagine that a cornered president and republican-controlled congress will be tightening the purse strings in the future, so a supply shock will be met with a demand shock. I can't imagine this is good for the price level..

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com2tag:blogger.com,1999:blog-6220364.post-1116984624233501452005-05-24T21:26:00.000-04:002005-05-24T21:30:24.240-04:00

I found this part of the FOMC's latest minutes amusing. Apparently, some governors are basing their monetary policy decisions because you just can't bet against the US economy.Although downside risks to sustainable growth had become more evident, most members regarded the recent slower growth of economic activity as likely to be transitory. In this regard, the ability

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115687668433898792005-05-09T21:14:00.000-04:002005-05-09T21:14:28.576-04:00

Budget airlines are starting to appear in many different countries in the developing world. The results are incredibly positive for millions of people who are suddenly finding it affordable to fly. In most places, travel that once took several days on a bus is being reduced to just a few hours. It's a brand new transportation revolution. BBC NEWS | World | South Asia | India flies into budget

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115600426933460232005-05-08T15:28:00.000-04:002005-05-08T21:00:27.176-04:00

The IMF just finished its article IV consultations with Equatorial Guinea and the press release has some interesting facts. Growth is booming thanks to the dramatic increase in oil production, but unfortunately the boom isn't easy to handle. The real exchange rate is appreciating substantially, and the inflows of foreign exchange are generating an explosion in the money supply. Unbelievably,

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115333894542341512005-05-05T18:58:00.000-04:002005-05-07T00:54:51.906-04:00

This news is really depressing. That's all I have to say.Colombia has handed over to the US two American soldiers suspected of trafficking weapons to paramilitaries.The United States said the allegations were "extremely troubling" and would be investigated fully.Colombian authorities said they found 31,000 rounds of ammunition when they arrested the two men at an apartment near Bogota on

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115256886225082182005-05-04T21:34:00.000-04:002005-05-04T21:41:47.470-04:00

Real interest rates in the developed world are low or negative, and this probably reflects a very low return on capital. This, and the abundance of savings just about everywhere except for the US, is driving capital to places where it used to be very scarce. Case in point: a dam gets built in Laos, a country with GDP per capita of less than $400, and where 70% of the population earns less than $2

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115255034117392352005-05-04T21:03:00.000-04:002005-05-04T21:03:54.263-04:00

Open source software is taking hold in Brazil, and I suppose it could help reduce the extraction of monopoly rents (at least it will be an interesting experiment in what happens when open source is given an artificial boost. ...now, far from Brazil, I find an open source wedding. Interesting concept... Brian & Ruby's Wedding

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115167927820485462005-05-03T20:47:00.000-04:002005-05-03T20:52:07.983-04:00

The BBC news is reporting on environmental havoc being caused by a plague of beavers.Yet beavers are not native to South America. Around 50 of them were introduced here from Canada in the 1940s. Argentina's then military rulers hoped that they would multiply and create a fur industry - in earlier centuries beaver pelts were among the most valuable in the world.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115084372807895902005-05-02T21:33:00.000-04:002005-05-02T21:39:32.806-04:00

QQ, one of the most popular instant messaging client in China, has added the word “march” (游行) to their list of banned words, preventing users from sending any messages that contains the prohibited word.This from a post on Chinese bloggers' reactions to the recent anti-Japanese protests from Global Voices Online.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1115080224775785832005-05-02T20:22:00.000-04:002005-05-02T20:30:24.776-04:00

The Asia Times has an interesting article about multinationals from developing countries.Companies from India, China, Brazil and Malaysia are among those busily investing around the world. According to the annual World Bank report titled Global Development Finance released

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114909064348658022005-04-30T19:25:00.000-04:002005-04-30T21:10:44.146-04:00

Holding international reserves has benefits for countries, as they serve as pledgeable collateral for international borrowing. Deciding the appropriate level of reserves is, for a country, akin to the process a company goes through when deciding its level of cash. There are benefits in that creditors will demand a lower risk premium to more liquid companies. There are costs, most importantly the

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114735525467634262005-04-28T20:45:00.000-04:002005-04-28T20:47:03.306-04:00

The Washington Post has a nice story about how free meals offered at schools are encouraging parents to send children to school.In Dataan, in the northwestern state of Rajasthan, 59 percent of girls drop out of school before finishing fifth grade, according to government statistics. But school records in Dataan show a 23 percent increase in girls' enrollment and attendance since the program began

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114727293819852192005-04-28T18:28:00.000-04:002005-04-28T18:28:13.820-04:00

I won't claim to know how to ensure a soft landing, but I am sure that tax cuts are not the way to turn around the current account. Republicans Reach Deal on $2.6 Trillion Budget Plan

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114650236833699012005-04-27T21:03:00.000-04:002005-04-27T21:03:56.833-04:00

Brazil's central bank is trying to meet its inflation target of 5.1% this year, but there are plenty of obstacles. Not only are oil prices pressuring inflation, but the currency keeps wanting to appreciate, in part thanks to the great balance of payments situation in which the country finds itself. There can also be too much of a good thing. The new-found economic stability, microeconomic

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114563741460302872005-04-26T21:02:00.000-04:002005-04-26T21:02:21.460-04:00

Yes, we live in an era of global imbalances. Fortunately, there are plenty of selfless Japanese businessmen that will help to close the current account deficit.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114560765324702172005-04-26T20:12:00.000-04:002005-04-26T20:12:45.323-04:00

Shiv Sena is a hindu nationalist party named after a seventeenth century Maharashtrian warrior king. It was formed during a time when immigrants from South India were taking jobs away from the Maharashtrian youth. It has been accused of instigating anti-muslim riots during 1992 and 1993. They can be pretty backward. To give you an idea, here is a piece from the front of the Times of India's

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114476160854039172005-04-25T20:42:00.000-04:002005-04-25T20:56:24.853-04:00

Ecuador's president sacked the supreme court, then took it back, and then congress sacked the president. The constitution says the vice president must serve out the rest of the term, but the public is demanding new elections. Talk about a constitutional crisis. Oh, and the new minister of finance has pulled the country out of trade negotiations and wants to restructure the country's external

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114393252934114362005-04-24T21:40:00.000-04:002005-04-24T21:40:52.933-04:00

It looks like the removal of textile quotas will be too much change all at once for the global economy. Not only is there backlash in the US, but also in Europe, not to mention a great deal of fear in other places like Central America, Colombia, Peru, Turkey, and other nations with significant textile industries. Unfortunately, China's reluctance to revalue could bring momentum behind the drive

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114351166138876242005-04-24T09:59:00.000-04:002005-04-24T09:59:26.136-04:00

Indicative of changing times, a traditional Muslim family in this Uttar Pradesh capital arranged their daughter's nikaah ceremony over the Internet. Shabnam, the 26-year-old bride, said Qubool hai (I accept) to groom Abdul Kalaam in front of a web camera Friday. While Shabnam was sitting in a cyber cafe in Lucknow's walled city, Kalaam positioned himself before a webcam thousands of miles away

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1114297206730879022005-04-23T19:00:00.000-04:002005-04-23T19:00:06.730-04:00

Henry Blodget actually makes some interesting observations about the coexistence of democracy and capitalism in China. China's growth miracle is an uncomfortable rhynoceros in the living room for those people who argue that strong competition and capitalism can only exist in the context of a democratic state. Indeed I know a few people who would welcome a collapse in the Chinese economy as

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1113961992880360082005-04-19T21:53:00.000-04:002005-04-19T21:53:12.880-04:00

The New York Times > Financial Times > Business > Oil-rich Gulf investors flex their muscles in Europe

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1113959235810571212005-04-19T21:07:00.000-04:002005-04-19T21:07:15.810-04:00

The government of Brazil keeps a lid on fuel prices in order to control inflation. Petrobras, the state oil company, absorbs the loss, so the subsidy is shared between the government and private shareholders. Prices are far enough from competitive now, and private oil companies are suffering.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1112148992151315812005-03-29T21:15:00.000-05:002005-03-29T21:16:32.153-05:00

US scatters bases to control Eurasia

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1111527345259804962005-03-22T16:35:00.000-05:002005-03-22T16:35:45.260-05:00

So says the FOMC. This theme should be with us for years, until the current account deficit disappears, and the US no longer needs to dilute the currency in order to service its net foreign liabilities. FRB: Press Release--FOMC statement and Board discount rate action--March 22, 2005

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1111499419804093212005-03-22T08:50:00.000-05:002005-03-22T08:50:19.803-05:00

Wholesale and producer prices are more representative of the prices of tradable goods, so it makes sense to see them accelerate, especially at more primary stages of production. U.S. February Producer Prices Rise 0.4%; Core Rate Up 0.1%

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1111455480596719632005-03-21T20:38:00.000-05:002005-03-21T20:38:00.596-05:00

Chavez is seeking to limit the amount of reserves that the central bank can hold, which on the surface doesn't seem to be a huge issue, given that countries that let their currencies float shouldn't accumulate reserves. But then again, Venezuela's exchange rate doesn't float, and the central bank intervenes in the foreign exchange market, so dollars do tend to accumulate on its balance sheet.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1111420554897915722005-03-21T10:55:00.000-05:002005-03-21T10:55:54.896-05:00

Fed Governors are catching on to the fact that the problem the US economy is likely to face is inflation, rather than deflation. This despite the fact that job creation isn't exactly booming, wage pressure is low or non-existent, and monetary aggregates don't look like they're getting out of control. What, then, is the problem? The problem, of course, is that the way that the US has chosen to

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1111250393144896552005-03-19T11:39:00.000-05:002005-03-19T11:39:53.146-05:00

Argentina was able to restructure its debt under particularly favorable circumstances, but now it believes it can get away with all sorts of economic mistakes, even the ones that led to its misfortunes during the 1980s. Real interest rates are negative, the government is trying to keep the exchange rate artificially cheap, and in order to control inflation the government is resorting to price

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1111105120980817542005-03-17T19:15:00.000-05:002005-03-17T20:38:17.433-05:00

Politically unstable countries have a harder time taxing their citizens, and governments that expect to last for only a short time face lower costs of fiscally irresponsible policies. For both reasons, politically unstable countries are more likely to resort to inflationary finance. This IMF paper has some evidence:...a higher degree of political instability, measured using several political and

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110939256061204382005-03-15T20:46:00.000-05:002005-03-15T21:18:37.366-05:00

Perhaps this is a good thing. All the success of Shanghai might actually get the residents of Mumbai to bite the bullet and engage in creative destruction. The main problem with Mumbai, as I have posted in this blog here and here, is the sea of slums, the dwellers of which "are encouraged and protected by political parties of every hue as they provide a huge catchment area for votes. " Indeed the

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110844169309969752005-03-14T18:49:00.000-05:002005-03-14T18:49:29.310-05:00

Brazil's victory at the WTO in the case against the US cotton subsidies has left India and China with a good taste in their mouth. Cotton prices will be cheaper, benefiting both countries. Now it looks like Brazil might bring up US soybean subsidies at the WTO, another case in which India and especially China have a big interest. Things are looking tough for the farmers of the US. India

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110767899363940442005-03-13T21:38:00.000-05:002005-03-13T21:38:19.363-05:00

True in China, and anywhere else.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110765693611759592005-03-13T21:01:00.000-05:002005-03-13T21:02:16.740-05:00

"[One possibility is that] the Americans will decide to use the atomic bomb while they have it and the Russians haven't....In any case this is, I think, the least likely outcome of the three, because a preventive war is a crime not easily committed by a country that retains any traces of democracy."From Julian Sanchez

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110757907273202122005-03-13T18:51:00.000-05:002005-03-13T18:52:22.850-05:00

The FT is highlighting fears of massive credit problems, and consequently massive economic problems. I am more sanguine, and tend to believe in the power of printing money. That said, there is a trade-off between inflation and unemployment...or so they say.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110665525304505622005-03-12T15:58:00.000-05:002005-03-12T17:12:05.306-05:00

Ben Bernanke seems to stretch his argument a bit when he tries to convince us that the string of current account deficits that the US has accumulated since the mid-90s are the result of a "savings glut" in the emerging markets.Bernanke tells us that the crises that plagued emerging markets during the 90s and 00s (Mexico, Asia, Russia, Argentina) rendered these countries shy to consume, and

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110658791621028722005-03-12T15:16:00.000-05:002005-03-12T15:19:51.623-05:00

Some common features of inflations:• It takes a long time for people to catch on to what is happening, even during the more dramatic episodes of inflation. At first, firms believe that what they are witnessing is genuine pricing power. That is, that they have oligopolistic positions.• Inflations tend to happen in the context of adverse balance of payments and aversion to taxation. The extreme of

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110583967629265092005-03-11T18:31:00.000-05:002005-03-11T18:32:47.630-05:00

A recent BIS study provides some convincing evidence that Asian currencies show behavior that is inconsistent with the hypothesis of a “Bretton Woods II”. Asian countries appear to peg not against the dollar, but rather against a trade-weighted basket of currencies. This seems to me like very appropriate behavior, and also suggests that they are not as willing to finance infinite US savings

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110499530443054272005-03-10T18:48:00.000-05:002005-03-10T19:05:30.446-05:00

The Mckinsey Quarterly includes a survey of the world's capital markets that makes for very interesting reading.On size... global capital markets are huge: we calculate that the world's financial assets now total more than $118 trillion and will exceed $200 trillion by 2010 if current trends persist. The stock of global financial assets has grown faster than the world's GDP, indicating that

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110422173545939782005-03-09T21:36:00.000-05:002005-03-09T22:11:35.486-05:00

There is a budget deficit that's being financed by foreign central banks. There is an aversion to taxation, but a love of spending. The dollar is trending weaker. Commodity prices are rising. The Fed's mandate is to contain inflation, but also to keep growth going.It's little wonder people are starting to sell bonds.ABC News: Treasury Yields Jump on Inflation Fears

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110336093220326382005-03-08T21:41:00.000-05:002005-03-08T21:42:12.230-05:00

Gasoline prices will rise further instead of fall, as most people expected last year. People are starting to believe that energy prices will be high for a long time to come, and the belief that input prices have risen permanently rather than temporarily will make them more likely to pass these costs on to consumers.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110332971460920202005-03-08T19:31:00.000-05:002005-03-08T20:49:31.460-05:00

Grain reserves are not looking good, and soybean prices are rising. The last time this happened, inflation shot up to 5%. Food is the largest source of inflation in China.At the same time, inflation pressure is surging in places like Argentina and Brazil, where liquidity is abundant thanks to an overflow of dollars.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110328186896366572005-03-08T19:29:00.000-05:002005-03-08T19:29:46.896-05:00

Developing countries are increasing trade with each other at a dramatic pace. They are also increasing diplomatic and military ties, along with investment flows, which now flow south-south as well as north-south. A summit between Brazil, India, and South Africa is the latest manifestation of this theme.-

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110249335082820652005-03-07T21:33:00.000-05:002005-03-07T21:43:13.320-05:00

Rather than the deflation, the real risk to the US economy is inflation. Slowly, more and more people are starting to believe it. Today, I found that Nouriel Roubini's web site has an entire section devoted to the topic. People are starting to catch on to the theme that will dominate over the coming decade.It seems clear that the US is in a position of excessive indebtedness, with its net foreign

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110238881251646822005-03-07T18:41:00.000-05:002005-03-07T18:41:21.250-05:00

Welcome to Zopa - The first lending and borrowing exchange

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110139443923467442005-03-06T15:04:00.000-05:002005-03-06T19:31:45.393-05:00

The Times of India quotes Intel's CEO: "If the world's best engineers are produced in India or Singapore, that is where our companies will go," Barrett says without batting an eyelid. "This is the reality in the modern world. We locate facilities where we can find or import talent."The concerns have to do with slippage in the US education system, along with an improvement in the higher education

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110134966928411222005-03-06T12:54:00.000-05:002005-03-06T13:49:26.930-05:00

The Washington Post's Marcela Sanchez writes about the disappointment that residents of Colombia's Caribbean coast, in particular Cartagena, feel in the wake of liberalization. They have access to things like sewers and running water, but they have to pay for it and employment is scarce. Contreras, 44, and her husband, Luis, struggle to pay for this luxury of running water, not to mention the

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110068360356519462005-03-05T19:13:00.000-05:002005-03-05T19:19:20.360-05:00

Warren Buffet's letter to shareholders once again warns of the fact that, if you live on debt, at some point you have to pay it back, and that paying it back won't be much fun. The FT quotes him here: Mr Buffett stepped up his warning about the US trade deficit and the need to finance it with foreign investment, devoting more than two full pages of the annual report to the topic. “This

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1110049123912056852005-03-05T13:45:00.000-05:002005-03-05T13:58:43.913-05:00

I was under the impression that the Chinese government's attention to urban housing issues was so efficient that there really isn't much of a slum problem. Indeed, when I visited one year ago I really didn't see much urban poverty, although a short trip to the countryside did reveal quite squalid conditions.The post below on the "latin americanization" of China inspired me to do a bit more

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109982467715986782005-03-04T19:17:00.000-05:002005-03-04T22:07:29.210-05:00

We've all heard about China's new rich, we've all heard about the growth, and about the inequality. This is the first time, however, that I see somebody raising the possibility that there could be a "Latin Americanization" of China. George Gilboy and Eric Heginbotham write:China’s economic reforms have created what Sun Liping of Tsinghua University calls a “cloven society.” The new rich and

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109980858767580472005-03-04T18:14:00.000-05:002005-03-04T19:01:32.460-05:00

While the US is busy thinking about tariff barriers on steel and keeping Canadian beef away from US consumers, the developing world is busy liberalizing its economies.Thus, we see that Brazil eliminated tariffs on steel imports today, and that India cut its top tariff to 15% from 20% in its latest budget.Shouldn't the US lead by example?

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109977017780280292005-03-04T17:56:00.000-05:002005-03-04T18:13:51.646-05:00

It turns out that the PRI, the party that ruled Mexico for 70 years before the presidency of Vicente Fox, has eliminated a rule barring its members from supporting private investment in the energy industry. This could pave the way for a move that I thought wouldn't be possible for a long time, though it is still unlikely to happen under President Fox's lame duck mandate: that energy reform might

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109903203079083342005-03-03T21:23:00.000-05:002005-03-03T21:26:43.080-05:00

The economist has a survey this week, and they argue that the biggest difference, the political difference, is not the key to the growth divergence between the two giants.Here is the survey, and what follows is a quote. I can't help but to think of the fable of the tortoise and the hare. Yes, India might take its time with reforms, but it sure seems to have a more effective way to deal with its

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109896294251447192005-03-03T19:23:00.000-05:002005-03-03T21:08:25.080-05:00

The economist wonders whether there are really winds of change in the Middle East. Could it be that neo-conservatives were right in predicting a "domino effect" of democracy? First Iraq, then Palestine has elections, and then Lebanon throws out a pro-syria government?They think not... How far-reaching is this new spirit? The Arab world is large and diverse, so there is always a risk of

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109893561446315202005-03-03T18:46:00.000-05:002005-03-03T18:46:01.446-05:00

China issues human rights report on the US

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109817432898857982005-03-02T21:37:00.000-05:002005-03-02T21:37:59.550-05:00

US ports are terribly congested writes the FT. Surging trade with China is increasing the strain on Los Angeles and Long Beach, which together receive nearly 80 per cent of traffic to the western US. The Pacific Maritime Association, which represents west coast ports, predicts import volumes will increase by a further 14 per cent on average this year the same rate as last year.Container ships

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109805340334583512005-03-02T18:15:00.000-05:002005-03-02T21:39:54.276-05:00

The US is plotting to kill me, says Chavez, and they want to make it look like a suicide.Go figure. The sad thing is it's probably true. It's not quite clear whether we should laugh or cry.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109729214686195312005-03-01T19:00:00.000-05:002005-03-01T21:06:54.830-05:00

This is the question that the London Review of Books asks as it reviews two new books on the Kenya Emergency, a period at the end of the British empire where behavior was, well, less than exemplary. Of course, the review article begins by citing Niall Ferguson, who has argued that the British empire was actually a good thing because, among other things, countries under British rule had access to

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com1tag:blogger.com,1999:blog-6220364.post-1109720685450998212005-03-01T18:44:00.000-05:002005-03-01T20:53:10.926-05:00

"BJP offers cow urine as cure all," reads a headline in the Times of India today. The BJP, of course, is a hindu nationalist party, hence the cows. According to the paper, A new goratna (cow products) stall at the BJP's souvenir shop is rapidly outselling dry political tracts, badges, flags and saffron-and-green plastic wall clocks with the face of former prime minister Atal Behari Vajpayee. The

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109645534258049312005-02-28T21:52:00.000-05:002005-02-28T21:52:14.256-05:00

India has permitted FDI in the real estate sector. I have commented below that India's ridiculous rules and regulations when it comes to land are at the heart of the lack of adequate housing that keeps half of Bombay's population in fetid slums. Nobody wants to develop land if they are not sure that somebody won't come up to them a few years later and say "this is not yours." The

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109641164379534182005-02-28T20:39:00.000-05:002005-02-28T20:46:16.773-05:00

What's the best way to get your exports going? Recently I've heard a lot of support for government intervention to protect industries, infant or otherwise. The Asian tigers, in particular South Korea, practiced a lot of interventionism, and still do, and have a lot to show for it. On the other hand, there are plenty of examples of situations where state intervention led only to lazy industries

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109630553354889882005-02-28T17:15:00.000-05:002005-02-28T17:42:33.360-05:00

Having come back from Mumbai (Bombay, as most people I met there like to call it), I'm still in awe of the sheer numbers. I'd been there before, but somehow this time the numbers really hit me. I'm reminded of two great descriptions of Mumbai's population issue, in no particular order, first from deeshaa. Numbers. That is reason number one for my discomfort with the city. Metropolitan

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109566289800473082005-02-27T23:51:00.000-05:002005-02-27T23:51:29.800-05:00

Robert Appleby took some fantastic pictures of Bombay's slums. I've just returned from Bombay, and believe me, the visual part is only a small fraction of the whole experience... and I didn't even go into a slum. Housing does not get built because it is simply not a worthwhile proposition. There are obsolete rent control laws that keep some prime apartments and office buildings at less than

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1109565401798419712005-02-27T23:36:00.000-05:002005-02-27T23:36:41.796-05:00

The Devil's Excrement shows how the Venezuelan propaganda machine gets out of hand. A poster celebrating the first 100 days of a "revolution" governor has been photoshopped to make a crowd look bigger.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108835357014363032005-02-19T12:47:00.000-05:002005-02-19T12:49:17.016-05:00

I'll try and post, if I can...

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108691348105501312005-02-17T20:37:00.000-05:002005-02-17T20:49:08.110-05:00

Here is a review of this book, which asks how Christianity became the religion of the rich and powerful, or rather how the rich and powerful can claim to be righteous Christians.I've always had a hard time listening to religious conservatives, mainly because of that camel and the eye of the needle thing.The problem with religious conservatives is not that they invoke religion too much, but that

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108689883529725752005-02-17T20:18:00.000-05:002005-02-17T20:24:43.530-05:00

Trying hard to get membership in the axis of evil...Adding insult to injury, Caracas has entered into a widely publicized agreement for a team of sales representatives from the Venezuelan state oil company PDVSA (Petroleos de Venezuela) to be trained by Iranian advisers on strategies for penetrating the Asian market. While Iran has long been one of Venezuela's closest allies in OPEC, Chávez has

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108688131784145692005-02-17T19:48:00.000-05:002005-02-17T19:55:31.786-05:00

Yes, we all know that. Here are some more facts. 64m tons of meat were consumed in China in 2004 compared to 38m tons in the US 258m tons of steel were used in China in 2003 compared to 104m in the US China's factories and homes burned 40% more coal than in the US The number of PCs in China is doubling every 28 months.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108606367534543002005-02-16T21:15:00.000-05:002005-02-16T21:12:47.536-05:00

The geopolitical environment is getting more complicated by the minute. Some snippets:Russia, it appears, sells two things: oil and weapons. It is quite indiscriminate about its customers, and in addition to Venezuela, Russia is selling weapons to Syria....and also yesterday, Iran and Syria announced an alliance. Rapidly the international political environment is changing. India and China are

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108348071016422932005-02-14T22:45:00.000-05:002005-02-14T22:42:56.536-05:00

In an earlier post, I linked to an account of life in Bombay because I found it a particularly good example of the type of institutional baggage that can retard economic efficiency and hence development. I had a hard time finding a good definition of institutions, and relied on Avner Greif’s.I’ve just found one that I really like and it comes from Douglass North, naturally. This is the beginning

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108426615398906162005-02-14T19:16:00.000-05:002005-02-14T19:16:55.396-05:00

According to this article, people born within 100 years from now will live to 5,000. I really don't see why not, given all the advances in our understanding of aging. The article also hits on the immediate question that pops into my mind: how do you fund retirement when the lifespan is so uncertain, not to mention long? Will a privileged class be able to live these exorbitant lifespans, while

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108336249768344702005-02-14T18:59:00.000-05:002005-02-14T18:57:44.560-05:00

The Economist points out how the price of cocaine has fallen in the developed world despite all of the government efforts to stem supply.in the United States a gram of cocaine wholesaled for $38 in 2003, down from $48 in 2000 and from $100 in 1986, with no fall in purity. In Britain, cocaine is cheaper than ever: in 2003 it retailed for about £46 per gram ($75), down from £57 ten years

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108330606379669372005-02-13T16:33:00.000-05:002005-02-13T16:36:46.380-05:00

This somehow rings a bell...The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. - Ernest Hemingway

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108330023228093962005-02-13T16:19:00.000-05:002005-02-13T16:27:42.836-05:00

I have observed during the whole time I have been in Lanarkshire that any rise in the rate of discount at the Bank of England has been immediately, or at least shortly, followed by an increase both of crime and of civil suits and, if it continues long, or mortality and typhus fever. So much so, that, as I am an official member of the prison board and of most of the Charities I have always made it

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108312244258642202005-02-13T11:09:00.000-05:002005-02-13T11:30:44.260-05:00

President Chavez is learning from his counterpart in North Korea, it appears. Yesterday he branded the US a "Terrorist State" after the Bush administration expressed serious concerns over recent deals to buy weapons from Russia. The Bush administration is worried that some of the 100,000 small arms that Venezuela is buying from Russia might end up in the hands of Colombian guerrillas.Carlos

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108263050689351132005-02-12T21:50:00.000-05:002005-02-12T21:53:35.766-05:00

One of Saturn's moons looks just like the death star.Saturn's diminutive moon, Mimas, poses as the Death Star - the planet-destroying space station from the movie Star Wars - in an image recently captured by NASA's Cassini spacecraft.A giant crater 138 kilometres across dominates the landscape of Mimas and represents almost one-third of the moon's diameter.Scientists first noticed Mimas's

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108228316297912042005-02-12T12:10:00.000-05:002005-02-12T12:28:57.133-05:00

Here is another wrench in the works of the Argentine debt restructuring negotiations. It shows how collective action isn't really as efficient as people sometimes think, because it is easier for some parties to make certain kinds of commitments, or to get organized and lobby in favor of their interests, than for others.Right now, the Argentine government is trying to get its creditors to accept

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108169389103034502005-02-11T19:49:00.000-05:002005-02-11T19:51:49.736-05:00

The New York Times ran a profile of Roberto Madrazo, the man who will most likely be the PRI's candidate for president. The PRI, by the way, ruled Mexico for 70 years before its reign was broken in the last elections. Many claimed that Mexico had finally matured into a modern democracy. But unfortunately things haven't gone according to planned. Now President Fox is considered a failure, and his

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108080925143596942005-02-10T19:15:00.000-05:002005-02-10T19:24:01.916-05:00

Total trade between India and China is still small, at US$13.6 billion, but it is growing at an explosive pace: 73%y/y. This is evidence of the dynamism in both economies. If we assume that increasing trade leads to better allocation of resources in both places, then this is good news for both of them. Read more here

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1108079785398865262005-02-10T18:56:00.000-05:002005-02-10T18:57:41.416-05:00

This type of thing really hurts credibility. Foreigners, in particular central banks, trust (to a certain extent) that the US will not dilute the value of the world's reserve currency, and this will make them trust a little less. In other words, things like this make it more difficult to finance the current account deficit. story

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107916131953528902005-02-08T21:32:00.000-05:002005-02-08T21:30:20.946-05:00

The debate over the privatization of social security, even among economists, seems very political to me. As much as I like to disagree with the Bush administration, I have to say that a plan to privatize social security makes sense. Not the current plan, but some sort of plan. Paul Kasriel puts it very well: I strongly am advising my adult children, Marisa and Matt, to urge their congressmen and

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107914449075950182005-02-08T21:00:00.000-05:002005-02-08T21:00:49.076-05:00

This Bloomberg article is really bizarre. According to the writer, "Mexico's peso fell to a one-week low on speculation inflation slowed more than economists estimate in January, which could prompt the central bank to hold off additional interest rate increases." Strange... I can hear the investors now "gee, what a disappointment, the central bank is actually being successful in bringing down

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107908873855118612005-02-08T19:27:00.000-05:002005-02-08T21:39:36.413-05:00

The Globalist features an adaptation from Sukehu Mehta's Maximum City that is quite revealing about institutions in India. In particular, this is quite revealing if we think of institutions as Avner Greif has defined them. In other words, what Mehta writes is revealing when we think of institutions in the context of an approach that: ...emphasizes the importance of social variables: (non-physical

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107827661817981032005-02-07T20:54:00.000-05:002005-02-07T20:54:21.816-05:00

It turns out that Chinese companies are huge investors outside the country. Engineering and construction projects alone accounted for a whopping US$17.5 billion, an amount larger than all of the FDI that was received by Brazil. This makes sense to me, as China needs to recycle the massive inflows that are threatening monetary policy, and China needs access to commodities.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107827306105730142005-02-07T20:48:00.000-05:002005-02-07T20:48:26.106-05:00

The Indian government is liberalizing its economy at a break-neck pace. The latest is the allowance of foreign direct investment in retail pension funds. The more transforming move will probably be the liberalization of the retail sector, which has been plagued with glaring inefficiencies due to the inability of any retailer to gain sufficient scale. I have posted before about how

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107825384950272092005-02-07T19:56:00.000-05:002005-02-07T20:17:35.546-05:00

The 1820s witnessed the first large wave of sovereign lending to Latin America. The lending went to many different countries in Latin America that found themselves newly independent and in need of infrastructure. As Alan Taylor notes, This was a time of potentially fortuitous coincidence of wants. The borrower was capital scarce, with funds needed for nation-building and economic development. The

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107823510470904812005-02-07T19:45:00.000-05:002005-02-07T19:47:02.573-05:00

China is poised to develop a "meltdown-proof" nuclear reactor.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107742510306767892005-02-06T20:58:00.000-05:002005-02-06T21:15:10.310-05:00

Robert Mundell explains how, under a dollar standard, the dominant currency country does not have to be bound by a balance of payments constraint because other countries will accumulate dollar reserves. This is the point that Ronald Mckinnon makes here. It is also what Charles De Gaulle referred to as the "exorbitant privilege" of the US. Under a dollar standard the United States would, unlike

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107705625770217862005-02-06T10:58:00.000-05:002005-02-06T11:00:25.770-05:00

It would not be very surprising to Robert Mundell that the US is seeking more exchange rate flexibility in China. After all, the dominant country in the international monetary system gets all the advantages of flexible exchange rates, and none of the drawbacks. Why? Because the liabilities of the residents of the dominant currency countries will be denominated in the domestic currency. After all,

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107701958218558832005-02-06T09:59:00.000-05:002005-02-06T09:59:55.473-05:00

The New York Times: China Denies It Had a Role in Sale of Yukos Gas Unit: "oil" The Chinese now claim the had nothing to do with the sale of Yuganskneftegas. Rosneft issued a qualified denial, saying on Wednesday that it received a $6 billion prepayment as part of a long-term oil supply contract with the Chinese National Petroleum Corporation, but that the money was not intended to buy

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107651202668504482005-02-05T19:40:00.000-05:002005-02-05T21:20:01.353-05:00

Investment in India is becoming very popular. Foreign direct investment alone will likely reach US$15 billion this year, almost tripling from last year. That would put India among the world's top recipients of FDI, although nowhere near China's level. The FDI is a sign that foreigners are quite pleased with India's economic management, and more importantly of the continued deregulation that is

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107564323075436002005-02-04T19:42:00.000-05:002005-02-04T19:47:12.776-05:00

Here is the post I promised describing Ronald McKinnon's view on the current international monetary dilemma. McKinnon argues that the conventional wisdom that “china must revalue” in order to correct the US trade imbalance is plain wrong. Not because china isn’t big enough, but rather because currency revaluation will not do anything to reduce China’s trade surplus with the US. McKinnon

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107560729352937382005-02-04T18:42:00.000-05:002005-02-04T18:45:29.353-05:00

It's not just hedge funds... ordinary Chinese are joining in the speculative attack in favor of the Chinese currency. Like most people in China, Allen Huang will ring in the Lunar New Year next week by visiting with relatives, handing out red envelopes of money and indulging in a weeklong festival of foods. He'll also take part in what's become another tradition among Taiwanese here: loading up

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107487725669162842005-02-03T21:48:00.000-05:002005-02-03T22:28:45.670-05:00

This conference at the San Francisco Fed looks quite interesting. I wish I could go. As an aside, it strikes me that the group of people who say interesting things about the international monetary system is really quite small. The same names pop up over and over again. Why is it so difficult to be creative about this topic? The conference begins with some very influential papers by Michael

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107398129288325142005-02-02T21:35:00.000-05:002005-02-02T21:37:46.536-05:00

Pictures would be nice on the blog... this is the first try. I just made this chart with the IMF's World Economic Outlook database online.

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107394135484926782005-02-02T18:53:00.001-05:002005-02-02T20:41:52.563-05:00

In the previous post, I linked to Amartya Sen's arguments in favor of more provision of public health care spending in India. Sen recognizes, however, that it is important to improve the regulation and supervision of the system, which is plagued with corruption. Here is another real dilemma. The state of Massachusetts has just released a report that details how employers have an incentive to

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107389404227399222005-02-02T18:53:00.000-05:002005-02-02T19:10:04.226-05:00

The Hindu interviews Amartya Sen, who has just finished a survey of India's public health care system. He isn't pleased (not surprising). The Indian government spends far less on health care as a proportion of its budget than most other developing countries, says Sen. At the same time, the health care system is riddled with corruption. Doctors don't show up, and when they are there they

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107307755336885232005-02-01T20:29:00.000-05:002005-02-01T21:07:59.310-05:00

Quote of the day: "They [the Chinese] understand property rights in Russia are not the most important rights, and they are more interested in guaranteeing supplies."A Russian analyst quoted in a BBC story on the role of China in the sale of a unit of Yukos. China (Chinese state-owned banks, actually) provided the financing for little known Rosneft to purchase the Yukos unit. In return, China has

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107305488461632562005-02-01T19:36:00.000-05:002005-02-01T19:56:14.196-05:00

The Chinese economy is growing very fast, some say overheating, in large part because credit is growing very quickly. Credit is growing very quickly in turn because the central bank is accumulating reserves at an awesome pace. The central bank is accumulating reserves in order to keep the currency from appreciating. The US runs a big trade deficit with China because China's currency is kept cheap

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107221872211223282005-01-31T20:34:00.000-05:002005-01-31T20:37:52.210-05:00

I now have an e-mail address: blaahg@gmail.com

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0tag:blogger.com,1999:blog-6220364.post-1107220251156919182005-01-31T20:01:00.000-05:002005-01-31T20:10:51.156-05:00

So, how does the US fix its fiscal mess (supposing that it wants to fix the fiscal mess)? Here is what the OECD recommended in a survey last year. Restraining both discretionary and mandatory spending, while necessary, is unlikely to be sufficient to restore the budget to balance over the longer term. To the extent that revenues have to be raised, this should be done primarily by broadening the

Shttp://www.blogger.com/profile/11152022396149918277noreply@blogger.com0