Macroeconomics

So you want to do your bit for the planet? Here is some food for thought…

Climate change, water shortages, rising global pollution levels and food insecurity have made environmental sustainability the most pressing concern of our time. Improvements in production systems and agriculture, and advances in clean technology, will certainly help, but as the global population becomes more conscious of the issues facing us as a human race, we begin to ask ourselves what it is that we can do to help preserve our planet for centuries to come. More than in anything else, the answer to that lies in the diet choices we make.

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Salar de Uyuni and REA – What´s Wrong with the Picture?

An old joke goes that a worse thing than being exploited by capitalism is not being exploited by capitalism at all. Under-exploitation by capitalism could probably be placed somewhere in the middle and an example of it can be seen in the area around a small town of Uyuni in Bolivia. Starting from there, you can take a trip between one and four days long and visit (among other things) the Salar de Uyuni (the famous Salt Flats) and Reserva Eduardo Avaroa (REA) National Park. The Salt Flats, which are the largest and highest in the world, are one of the most beautiful places on the planet. They constitute one of the brightest objects on the earth´s surface and are visible from space. The whole REA area is a natural wonderland supported by one of 12 most important watersheds in South America. The permanent lagoons Read More »

The Relevance of Productivity: From Macro to Micro

CG_MachicadoA longstanding question in economics is why some countries are much wealthier than others. Recent studies show that one part of the answer has much to do with differences in productivity levels among countries. Since the seminal work of Solow (1), an important concern in economic literature has been how to measure productivity. If productivity has a strong influence on growth and welfare in the long run, having a good productivity measure is a crucial element.

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What to do about YPFB?

Thinking to get at once all the gold the goose could give, he killed it and opened it only to find – nothing” By Aesop, The Goose with the Golden Eggs

During the last 5 years we have experienced a spectacular oil-price boom (see Figure 1), which has been thoroughly exploited by the Bolivian government to increase public revenues. Between 2002 and 2007, government revenues from the upstream hydrocarbon sector increased by a factor of 7, lately accounting for more than a third of all government revenues (www.upf.gob.bo ).

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The Need for a Revolution

CG Machicado

Nowadays everybody in Bolivia talks about revolution and the first thing that anyone can imagine, and has seen in the last days, is people fighting and killing each other. I do not want to talk about that kind of revolutions, instead I will talk about another revolution that Bolivia should achieve: A productive revolution in the agricultural sector.

A longstanding question in economics is why some countries are so much richer than others. GDP per capita in Asia grew during the last four decades at 5.2 percent, in the OECD at 3.3 percent and in Latin America at 1.2 percent. In fact the performance in Latin America has been very poor(see table).

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Bolivia back in the international headlines

By Raphael Jeronimo Calderon

“Bolivia’s Evo Morales stands on the brink of a ruinous civil war in his attempts to refound the Andean nation as a socialist state” states British The Guardian (1). RIA Novosti, the Russian news agency, writes Bolivia descends into chaos – Dead and wounded as a result of turmoils” (2). “8 dead during riots in Bolivia” covers the Austrian PR-Inside (3) and Qatari Al-Jazeera, as well as Spanish El Pais quoted Alfredo Rada, describing the events as “massacre” (4). Even UN Secretary-General Ban Ki-moon felt the need to comment on the present situation in Bolivia, stating that he is “deeply concerned about the violent clashes and the resulting loss of life in Bolivia, as well as the attempts to disrupt the nation’s economic infrastructure”(5).

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Is Bolivia’s fiscal policy pro-cyclical?

A pessimist sees the difficulty in every opportunity;
an optimist sees the opportunity in every difficulty.

Winston Churchill

Last week, Fundación Milenio (FM) presented its Economic Report for the first semester of 2008. The numbers look great, with high economic growth (6.1% for the first trimester), booming exports (58.3% more than same period last year), a rapidly growing trade surplus (117.4% more than same period last year), increasing tax revenues (26.5% higher than last year), falling external debt (31.1% lower than 12 months ago), increasing foreign reserves (55.5% higher than 12 months ago), and an enviable public sector surplus (2.5% of GDP).

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Quo Vadis Torch?

By Flavio Machicado

If doubts whether the Chinese economy is in fact the new world power lingered like nicotine on a wedding gown the morning after, the upcoming Beijing Olympics will eliminate all delusions. The unipolar hegemony shortly held by the US withers away before our very eyes, and preeminence in the post-American world is being distributed amongst a host of nations. This redistribution notwithstanding, the wellbeing of the new big boys in Asia – India and China – hinges on growth in the greatest consumer society to ever engulf the planet, and both tremble before the possibility of a recession made in USA.

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How to Explain a Building Boom in a Stagnant City

La Paz is one of the slowest growing cities in Bolivia, in terms of population. Every year, twice as many people move away from the city than move into it from other regions (1). Between 1992 and 2001, the city’s population grew a modest 11%, compared to the 60% growth of El Alto and Santa Cruz de la Sierra, and the 40% growth of the total urban population (see Table 1).

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If I were the mayor….

“Putting off an easy thing makes it hard.
Putting off a hard thing makes it impossible.”
George Claude Lorimer

If I were the mayor of almost any growing town or city in Bolivia, I would engage in land speculation with the municipality’s resources. I would buy up cheap land in strategic places and build streets, install water, sewage, electricity, and in general prepare for ordered urbanization. Then I would sell the plots for about 10-20 times what it cost me to prepare them.

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