Economics

Back to homepage
Economics Finance North America

Killing the Dollar: A Side-Effect of COVID and its Cures?

Since the end of World War II, the US dollar has consistently functioned as a safe harbour for investors caught by any sort of turbulence. Thus, no one was surprised by its appreciation at the height of the current pandemic, which began in April 2020. And no one will be surprised if vaccine makers’ promises to end the pandemic null all those gains. Yet, the currency’s status and reputation have been weakening since the demise of the Bretton Woods Accord in 1974 to the point that, as a side-effect, COVID and its cures may be lethal for the dollar’s international dominance.

Economics Latin America

Rumours of reform: the likelihood and consequences of currency reform in Cuba

Indications have been growing that the Cuban government intends to move forward with sweeping reforms to the country’s currency and exchange rate systems. These reforms will certainly involve the unification of the country’s current dual currency system. Nevertheless, such a change is easier said than done and will almost certainly be painful in the short term.

Economics International

The Uncertain Future of the EU-Mercosur Trade Agreement

In June 2020, the EU and the Mercosur trade bloc, which consists of Argentina, Brazil, Paraguay and Uruguay, concluded negotiations over the Political Dialogue and Cooperation part of their Association Agreement, after the free trade section was completed in June 2019. With a number of EU member states and civil society organisations voicing concerns about the environmental impact of the deal, its ratification is becoming more unlikely in the short-term.

China Economics

China’s pivot towards domestic-driven growth: not as easy as Xi hopes

China desperately wants to and must recover from its long-lasting dependence on exports as a means of economic growth. This is the objective of the dual-circulation strategy, which is set to become Beijing’s escape plan from the feared middle-income trap. However, with domestic consumption still weak, China is unable to survive without a good injection of public investment to boost its economic engine. The rush of rapid supply-side growth is hard to give up for a country used to abnormally high levels of GDP growth. 

Economics Latin America

IMF Money? Colombia’s Listening!

After a year of bad news due to the  COVID-19 pandemic and its economic repercussions, Colombia’s fortune is finally improving: at the end of September, the IMF expanded Colombia’s credit line from USD 10.8 billion to USD 17.2 billion.

Economics Europe

European monetary policy faces another crisis: Is the ECB effectively leading the way?

In a little over a decade the European Central Bank found itself fighting three considerable crises: the Great Recession in 2008, the sovereign-debt crisis in 2011-2012 to today’s pandemic-induced recessions. The Euro is a project without precedent and under Mario Draghi the ECB was a leading actor in world monetary policy. In 2019, Christine Lagarde became the new president of the ECB.  How does she compare?

Asia Pacific Economics

‘Suganomics’: What can we expect?

Japan’s new Prime Minister Yoshihide Suga, who took up office on 16th September, faces the challenge of revitalizing an economy still reeling from the effects of COVID-19. There are indications that Suga will continue many elements of his predecessor Shinzo Abe’s ‘Abenomics’ policy. Nevertheless, his economic policies are likely to diverge from Abe’s in a few key areas, owing to the influence of the COVID-19 pandemic and Suga’s tenure as Minister for Internal Affairs and Communications.

Economics Latin America

Crisis besets Venezuela: A failing regime?

Economic downturn, trading tensions with the USA, and international sanctions have all begun to play a role in the destruction of the Maduro regime. The possible results of this are civil unrest, economic collapse and ultimately, a failed state.

Economics Latin America

Brazil: How is South America’s biggest economy poised to behave?

Last week Brazil’s COPOM (Committee for Monetary Policy) met to discuss the current economic environment, not only in Brazil but around the world. The meeting had one overall result, which was to maintain current interest rates. The country’s Taxa Selic will stay at 2% p.a. Although this event might not seem newsworthy, it tells us a great deal about the recovery of the South American economy.

Economics North America Under The Radar

Currencies: Is the Dollar in Danger?

Recent declines in the dollar have once again raised questions about its status as the de facto global reserve currency. But the current depreciation in the greenback is more the result of a perfect short-term storm, as opposed to a permanent global retreat from the dollar.