Everyday the blogosphere offers an enormous amount of in-depth analysis on any imaginable topic. The world of macroeconomics and economic forecasting is no exception. To keep themselves updated on the latest information, our in-house team of economists scan the world wide web and gather what they consider the most interesting, appealing, informative or just curious blog posts from experts in the field of global economics. Here’s the list of the Top 4 posts from this week. Check it out!
- Caracas Chronicles – Anabella Abadi y Bárbara Lira: ‘PDVSA’s sad third place‘
TheThe oil reserves in Venezuela are supposed to be the largest in the world and, although the country’s oil is considered very heavy by international standards, it is relatively easy to extract. Despite these advantages, PDVSA fell to the third position among Latin America’s 500 largest companies from the top post, which it held for several years. The authors of this post highlight the ongoing downturn that afflicts the oil industry in Venezuela. Although Petrobras and Pemex, the largest companies of the region, produce less barrels of crude per day, they have much higher revenues. Against this backdrop, the authors not only claim that someone is doing something wrong, but they point Minister of Petroleum and Mining and President of PDVSA Rafael Ramirez as the main culprit for this fiasco. – Ricard Torné
- VOX – Pranjul Bhandari & Jeffrey Frankel: ‘Central banks in developing countries should consider targeting nominal GDP’
Central banks, especially in developing countries, still seek transparent and credible communication. Yet signalling intentions through forward guidance or commitment sometimes creates undesirable constraints. This column argues that central bank pronouncements phrased in terms of nominal GDP are less likely to run afoul of the supply and trade shocks so common in developing countries, compared to pronouncements phrased in terms of inflation. – Carl Kelly
- Money and Banking – Stephen G. Cecchetti and Kermit L.Schoenholtz: ‘To RMB or not to RMB? Lessons from Currency History’
China is the world’s largest trader and (on a purchasing power parity basis) is about to surpass the United States as the world’s largest economy. China already accounts for about 10% of global trade in goods and services, and over 15% of global economic activity. So, as China takes its place as the biggest economy on the globe, will its currency, the renminbi (RMB), become the most widely used international currency as well? Will the RMB supplant the U.S. dollar as the leading reserve currency held by central bankers and others, or as the safe-haven currency in financial crises? – Carl Kelly
- Washington Center for Equitable Growth (Blog) – Brad DeLong: ‘Just What Is Europe’s Economic Destiny?’
In this post, Brad DeLong writes that in the middle of 2011 it was possible to say that Germany had recovered from the crisis and that the remaining problems of southern Europe were the result of their own weaknesses, and that German growth was about to resume. However, in nearly three years after the crisis hit, no significant growth in industrial production has been seen in Germany. He continues explaining that back in 2010-2011 he used to think that Europe’s real problem was the chaos in the south, which in turn was good for the German economy. He exemplifies that every time a police car was torched on the streets of Athens, the euro dropped in value at another container of machine tools left Hamburg. But, he argues, that has not been true for three years. – Ricardo Aceves
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