Should Venezuela Default?

Should Venezuela Default?

September 5, 2014

Ricardo Hausmann for Project Syndicate

CAMBRIDGE – Will Venezuela default on its foreign bonds? Markets fear that it might. That is why Venezuelan bonds pay over 11 percentage points more than US Treasuries, which is 12 times more than Mexico, four times more than Nigeria, and double what Bolivia pays. Last May, when Venezuela made a $5 billion private placement of ten-year bonds with a 6% coupon, it effectively had to give a 40% discount, leaving it with barely $3 billion. The extra $2 billion that it will have to pay in ten years is the compensation that investors demand for the likelihood of default, in excess of the already hefty coupon.... Read more about Should Venezuela Default?

Reducing Colombia’s large regional gaps

Reducing Colombia’s large regional gaps

August 22, 2014

Eduardo Lora

Colombia is currently one of the most dynamic economies in Latin America. In the first quarter of this year, growth was an impressive 6.4%, and for the full year will reach at least 5%. Abundant oil and mining revenues have been the main driver of the expansion. With a strong fiscal position and a monetary policy that enjoys credibility, the country has avoided squandering this boon. But it still has much...

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Ukraine’s real problem, in four graphs

Ukraine’s real problem, in four graphs

June 8, 2014

Marcela Escobari for the Boston Globe

WHICH WAY will Ukraine turn? With Russia’s recent military aggression taking so much of the spotlight, it’s easy to forget that Ukraine’s political unrest this year began with domestic protests over a question key to the future of its 45 million people: whether to tie their fortunes more closely to Russia, or to Western Europe.

As a former Soviet republic with many Russian speakers,...

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