At 14:59 22/02/2007, yoshie wrote:
I've been following inflation stories about Iran and Venezuela (as
well as India, China, Mexico, etc.).
Both governments clearly want to avoid raising interest rates and
curtailing social spending, orthodox solutions to inflation. But if
not those, what else can they do? I've been reading about the Chavez
government threatening to jail hoarders, removing three zeroes from
the bolivar, lowering VAT, threatening to nationalize grocery
distribution and retail, etc., but they don't seem to be working.
Too soon to say whether the campaign vs stores hoarding necessities
is working. That is to be policed by neighbourhood committees. The
lowering of the VAT certainly lowers prices and the shift to a new
Bolivar reflects 20 years or so of inflation and will occur next year
in the context of a strong economy with high reserves (so an
auspicious time to create a strong Bolivar)./m
--
Yoshie
<http://montages.blogspot.com/>
<http://mrzine.org>
<http://monthlyreview.org/>
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6
Currently based in Venezuela.
NOTE NEW PHONE NUMBERS
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