Chavez Evaporates Venezuelan Bolivar And Leads Country Into Darkness

Hugo Chavez, president of Venezuela, started 2010 off by devaluing the Venezuelan bolivar by 50% from 4.3 per dollar from 2.15 per dollar, along with several other silly little limits.  This is continuing the theme of currency devaluations from late 2008 and 2009.  But the evaporation of currency is not only limited to third . . . → Read More: Chavez Evaporates Venezuelan Bolivar And Leads Country Into Darkness

Exchange Rate Regime of Systemically Important Countries

Many people believe that the exchange rate regime (i.e. the monetary policy regime) of each country is its own sovereign choice.

In the Great Depression, we saw the harmful effects of the exchange rate mercantalism that is feasible with fiat money. This was a key motivation for Keynes and others in their design of . . . → Read More: Exchange Rate Regime of Systemically Important Countries

Rebalancing in the Baltics – A Preliminary Assessment

“In my view … it is impossible to understand this crisis without reference to the global imbalances in trade and capital flows that began in the latter half of the 1990s.” Bernanke (2009)

Executive Summary

Compared with the average quarterly value of GDP in 2007-08, the first two quarters of . . . → Read More: Rebalancing in the Baltics – A Preliminary Assessment

Armenian Currency Goes Poof

On 3 March 2009 in the space of a few hours the Armenian dram evaporated from about 300 per dollar to about 400 per dollar and 275,000 drams per ounce of gold to approximately 365,000 drams per ounce of gold.  This rapid 30% currency poofing is like when the Kazakhstan currency went poof but without . . . → Read More: Armenian Currency Goes Poof