The Overkill Evening News


I was kind of shocked to read in a note that the IMF had said, in its latest World Economic Outlook Report, that Venezuela’s “hyperinflation” would speed up in the coming years.

After all, hyper-inflation, while not quite a term of art, is something very different. Economists differ in defining it, but they would all agree that Venezuela is most certainly not experiencing it yet.

It sucks that prices are going up 30% per year. But that’s not Weimar, paycheck-in-a-wheelbarrow territory. So I was a bit stunned to find that the IMF had used that term.

Only they hadn’t. Globovisión simply made it up.

Look, the IMF’s forecast was pretty damning. But the extent of their analysis of the Venezuelan economy was the little table that is pictured in the post. In order to tell the story of the Hugo Chávez debacle, you don’t need fancy words with pompous greek prefixes.

All you need is a little table showing Venezuela next to its neighbors.

All the rest is overkill.

#13 – Writing about economics is easier than writing about Peru. At least I know some economics.

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  1. Inflation keeps on feeding himself. When expectations grow, så gorw the inflation.

    The problem with Venezuela is not strictly economical, but political. To stop the inflation you need to restrict consumption, and this is not a happy idea. If needed, you can use social programs, to release pressure, but anyway it is painful.

    Galbraith, in ‘Money: Whence it came, where it went’ , says that people could accept the pain of reducing inflation, when inflation itself becomes unbearable. He quotes USA in the civil war. Not messing with politics at this one, but the same happened in Peru, regarding economic policy to reduce inflation in the 90’s.


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