Article Category: Our Chief Economist

THE ARCHETYPICAL model of political competition is the Downs equilibrium. Originally it was the Hotelling model of spatial competition between firms. The Downs equilibrium is also known as the median voter theorem (MVT). It has been understood after the fact that the model yielded a Nash equilibrium in pure strategies, or in complicated versions it...

ONCE AGAIN America is leading the way. The direct income support stimulus packages are piling up, indirect tax incentives are also accumulating. Biden isn’t stopping, and apparently won’t stop before getting the country out of crisis for good and maybe even provide a welfare buffer zone ahead of his one-term service time. Good, but is...

AS I HAVE CLAIMED BEFORE, an old style balance of payments crisis isn’t in the cards. However, an FX funding squeeze is a flat, open, crystal-clear reality, and there is more to come. It isn’t only the current account deficit that matters, nor do tourism revenues – or lack of it thereof. It is the...

Incoming data suggest there are incongruities almost everywhere. There is no way so many jobs could be created in a business world surrounded by so many uncertainties. Indeed, industrial production figures don’t square with employment data. Inflation is another conundrum. The real issue isn’t whether inflation is about two times higher than the official print....

YES, IT IS. IT IS SO ESPECIALLY in an economy where head-on CPI inflation is a lot higher than what it was, say, 17 years ago. Hence, a decade and a half of ‘inflation targeting’ didn’t end up anywhere near the target. It is also important for the advanced world, and they take it seriously...

FIRST, industrial production is still strong but has been losing steam since of February – already. Calendar- and seasonally-adjusted production is flat. Second, unemployment is very high and, according to the broad definition, almost up to 30%. More accurately, it stands at 28.9%. Third, inflation is high and even rampant in the short run. It...

THE SITUATION IS AWKWARD, even by the Turkish standards. Clearly neither inflation is under control nor is the exchange rate. And yet there is talk about rate cuts. This could only lead to a ‘chaotic’ trajectory – in the technical sense. This means non-linearity, complex dynamics and eventually chaos. Because the exchange rate is by...