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Running Head: ECONOMIC REFORM IN VENEZUELA
Donning the Golden Straitjacket:
Why Economic Growth for Venezuela will not be a “Mexican Miracle”
And the Impact that Venezuelan Decisions on the Geopolitical Landscape
Daniel Sehlhorst
University of Notre Dame
Naval Academy Foreign Affairs Conference
United States Naval Academy
10 April 2015
Introduction
In an age of poverty, borderline hyperinflation and abysmal economic productivity, Venezuela requires a
pragmatic reform strategy in order to secure a more peaceful, secure and prosperous future for Venezuela. In
choosing policies in the realm of political economy, there are by necessity tradeoffs, but it is possible to maximize
economic opportunity through well-structured public policy. Currently, it seems that President Nicolás Maduro is
hoping that Venezuela will experience a similar burst of inwardly-focused growth to that which Mexico enjoyed
with the Mexican Miracle from 1945 to 1970, but I argue that because the Venezuelan economy is more similar to
La Década Perdida in the 1980s, Venezuela’s route to economic recovery requires taking liberalization measures
as the Mexican government did in the early 1990s.
Moreover, the stability of South America, both economically and politically, could depend on a smooth
transition from crisis to long-term strength. In a country where former President Hugo Chavez is treated like a
god-like figure, continued instability or rapid policy shifts could both cause a violent uprising. With the oil
alliance, PetroCaribe, subsidizing economies across the Caribbean, policy shifts could have broader implications in
the geopolitical landscape, as well.
The Mexican Miracle
Between 1945 and 1970, Mexico’s economic policies were inwardly focused, fostering development by
imposing high import tariffs and encouraging internal productivity. Its growth was built upon an incredibly
effective education system at the time. The country’s youth enrollment in school grew by three times during the
period from 1920 to 1940.1 As this generation entered the workforce in the 1940s, the economic output of
Mexico rose steeply. From 1940 to 1981 Mexico’s Gross Domestic Product grew at an average rate of 6.1 percent
per year.2
A Mexican Miracle requires that a population is large enough to create demand that makes domestic
industry possible. While this is easier in Mexico, with a population of 122 million versus Venezuela’s 30 million, it
is possible for Venezuela to support industry with its population. With that said, the challenges to economic
growth are more complicated, and the real changes are attributable to economic policies and domestic realities.
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La Década Perdida
In the 1980s, Mexico experienced a period of financial crisis. During the petroleum crisis of 1973, the
price of petroleum skyrocketed. As a result, the Mexican government began to rely heavily on oil exports to the
United States to support the country economically. When José López Portillo served as President beginning in
1976, this financial stability was being undermined by falling prices.3 Without diverse income, Mexico experienced
high inflation and the peso would be devalued by over 500 percent.
Economic liberalization brought a respite to an ailing Mexican economy. It was not until Mexico entered
the General Agreement of Trade and Tariffs (GATT) in 1986 after a sustained effort to court foreign investment
by President Miguel de la Madrid that inflation was brought under control. Substantial economic growth did not
begin until after a massive currency devaluation by President Carlos Salinas de Gortari in 1993, which sparked a
financial crisis due to its rapid nature, and Mexico’s subsequent entrance into the NAFTA agreement in 1994.
In Theory: The Impossible Trinities
In political economy, choices are built on economics theories. There exists a theory known at the
Impossible Trinity, or the Mundell-Fleming Trilemma. It says, more or less, that a nation’s public policy can only
secure two of three economic benefits when it comes to global trade: full capital mobility, fixed exchange rates or
domestic monetary autonomy.4 As a result of these choices and the globalization process, states must also pick
between two options in what Dani Rodrik called the Political Trilemma: deeply integrated national economies,
democratic politics over economic policy or existence as a nation state with sovereign policies that cause
transaction costs and regulatory discontinuities.5
Fixed exchange rates, in Venezuela’s case the bolívar being overvalued, will be favorable the consumers
to some degree, but hurt exporters and producers.6 This, in turn, turns Venezuela’s economy inward by imposing
high import barriers. This logic is central to the Mexican Miracle-style trade barriers. On the other hand, floating
exchange rates, in Venezuela’s case the bolívar would likely be weak against other currencies, will be favorable for
exporters and producers, but more challenging for consumers. Venezuelan leaders desire a Venezuelan economic
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boom, but more importantly, they know that accepting a floating currency will reduce their ability to defy the
international community for fear of economic retaliation. An important caveat to the logic for a fixed exchange
rate is that black markets and rapid inflation undermine the benefit, which will be discussed more below.
With full capital mobility, the Race to the Bottom hypothesis posits that state policy would tend to
converge to capital-preferred policy.7 In Venezuela’s case, this would be particularly true for foreign investors,
considering that Venezuela is not a capital-rich country. According to the Heckscher-Ohlin model, countries
following a capital-preferred policy will specialize in their abundant factor endowment for export.8 In Venezuela,
this will be oil, first and foremost, which introduces new issues. Because the typical resource in labor-rich
countries, labor, is overshadowed by oil, a Mexican Miracle in Venezuela today becomes impossible.
From Theory to Analysis: The Economic Realities in Venezuela
Going back to Rodrik’s Political Trilemma trade-offs, there are three possible conditions. By limiting
economic integration, states would be choosing a structure similar to the Bretton Woods agreement, claiming the
benefits of domestic monetary policy autonomy and a fixed exchange rate. This is most similar to what Venezuela
is doing today, and to the Mexican Miracle, except a variety of circumstances are mitigating the benefit of a strong
currency for consumers, as will be discussed below. By giving up mass politics, countries adopt a condition for
which Thomas Friedman coined the term ‘Golden Straitjacket,’9 in which nations don’t have the ability to make
economic choices, but must take the best options according to the market.10 In this situation, the benefits of
monetary policy autonomy and full capital mobility are in play. Because President Maduro and his party do not
want to relinquish domestic power, they resist the Golden Straitjacket.
Currently, though, Venezuela is limiting its own potential by only utilizing one of the tools above to the
fullest — domestic monetary autonomy via the nationalized Central Bank. While Venezuela is attempting to
utilize fixed exchange rates, this tool is fragmented with a three-tiered exchange system. While the official rate sits
at 6.3 bolívars per dollar for essential food and medicine, the Sicad (Sistema Cambiario Alternativo de Divisas) II
system is auctioning some dollars at a rate around 50 bolívars and the black market price has soared above 80
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bolívars. As a result, the strength of the fixed exchange rate in fostering a Mexican Miracle-type growth is
weakened.
When it comes to political economy, there are often time-consistency problems. Keeping a fixed
exchange rate can be in a country’s best interests in the short term for a number of reasons. A pegged currency
can create a stable atmosphere11 for foreign investment by bolstering demand and lowering inflation rates. Even
with a pegged currency in Venezuela, the inflation rate has soared, foreign direct investment has plummeted and
imports are far below demand. The reasons for currency controls — encouraging domestic industry and
preventing capital flight — are unraveling as countries limit business operations in Venezuela12 and oil continues
to overwhelmingly dominate Venezuelan exports,13 just as they did in Mexico in the 1980s. These complications
also made a transition difficult in Mexico, eventually leading to a devaluation nosedive that caused the 1995 crisis.
A fixed exchange rate can effectively achieve the goals above in the short term, but it will not work well if
the disparity continues to be so large. The reason firms are willing to conduct business in a country with a fixed
exchange rate that falsely swells the buying power of a foreign currency is because conducting business in that
environment is still profitable. However, the disparity is reducing profitability for some companies and the supply
of U.S. dollars in Venezuela is drying up.14 This reflects how other elements in the Venezuelan economy have
crippled capital mobility, primarily the capital controls imposed by the government.
Simply reconstructing a stricter peg and fostering growth is not the answer. A number of other
disadvantages exist when holding the currency fixed to the U.S. dollar. Fixed exchange rates encourage the
formation of a black market as it becomes overvalued, as occurred in the Mexican (1995), Asian (1997) and
Russian (1997) financial crises. A pegged currency can also produce a foreign currency shortage because
maintaining a pegged currency often requires strong capital controls. More problematic, however, is that
Venezuela exports more than it imports from the U.S., driving a typical balance-of-payments issue, where
American products become relatively less expensive and Venezuelan products more expensive15, further
exacerbating Venezuela’s currency problems. In the long term, Venezuela’s best choice is a transition to a floating
currency.
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Systemic Inefficiency Causing Inflation
Today, Venezuela is failing to achieve its full potential largely due to fundamental, systemic policy
weaknesses that disable economic markets from meeting the demands of its consumers. Venezuelan economic
policy looks like Mexico’s during its Miracle, imposing high import barriers. Venezuela has flirted with reform,
but inevitably decided to the choose power over the best interests of the populace. In the past two years,
Venezuela replaced its Finance Minister twice. In April 2013, Jorge Giordani was replaced by a reformer, central
bank chief Nelson Merentes16, but in January of this year, Merentes was supplanted by army brigadier general
Rodolfo Marco Torres,17 for the widely speculated purpose of shoring up the support of the army after the death
of former President Hugo Chavez in March 2013, rather than to implement necessary economic reform.
Typically, an inward focused policy would foster domestic production, but Venezuela has an additional
problem that prevents Venezuelan growth. Venezuelans suffer from what political economists call “Dutch
disease” or the “resource curse,” where the economy centralizes around a profitable natural resource and fails to
develop other productive industries. Workers follow rent-seeking behavior by flocking to the petroleum industry,
the most profitable sector, rather than develop small businesses.
The problem with relying on oil, as Mexico did during the 1980s, is that price fluctuations can cripple an
economy. The problem becomes thornier in Venezuela because of social programs tied to ,. Under Chavez, a
number of domestic subsidies were provided to lower the cost of food, health care, foreign travel and electronic
goods, making life for average Venezuelans more affordable. These subsidies are paid from the nationalized oil
company, Petróleos de Venezuela, S.A., the best source for obtaining U.S. dollars for the Sicad II system, but the
company cannot even gather enough revenue to fund the programs. As a result, Venezuela has been forced to
print massive quantities of money, swelling the money supply by approximately 70 percent in 2014,18 further
escalating inflation as the bolívars chase a decreasing number of imported goods.19 Mexico fell into a similar trap
in the 1980s after their growth in oil sales in the 1970s, and Mexico required liberalization to exit their recession.
As a result of Dutch disease, domestic production is not sufficient to supply domestic demand for basic
supplies, such as food staples. Since Chavez took office in 1999, the number of factories has decreased from
11,117 to 7,093.20 Venezuelans are dependent on imports for a number of goods, including toilet paper, sugar,
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milk and certain medicines, according to BBC.21 Because buying U.S. dollars is only possible through a
government currency agency22, and the agency often only auctions off small amounts of dollars for specific
imports and foreign travel, companies are unable to purchase quantities of goods on the world market that meet
domestic demand. There is some speculation that the Central Bank is unwilling to auction enough dollars because
it does not possess a sufficient supply of dollars.
The lack of supply of goods and dollars with which to purchase them has torched the economy with high
inflation. According to the Central Bank of Venezuela, the annual inflation rate rose from 60.9 percent in May to
62.2 percent in June, settling at 62 percent in July.23 This data, however, was released after a months-long hiatus
from transparency, raising suspicion that inflation could be significantly higher. As a result of poor economic
policy, Venezuela is exposing itself to unrest and instability that could topple its government, such as the antigovernment demonstrations early this year that interrupted supply chains and augmented already high inflation.24
Foreign investment is no answer, as foreign firms are increasingly hesitant to trade with Venezuela. There
is a clear reason why firms are unwilling to trade dollars at the fixed exchange rates set by the government: it has
overvalued the bolívar by nearly 15 times in the past year, with the black market price peaking at 88 bolívars per
dollar during the February unrest25, compared to the official rate of 6.3 bolívars. The Bank for International
Settlements of Basel estimates the overvaluation of the bolívar at 91 percent.26 Firms might be willing to operate
despite the disparity if they could exchange their bolívars for U.S. dollars and repatriate the money, but the
Venezuelan government has not allowed this at market volumes, enacting severe capital controls especially in the
last five years.27 While the much higher Sicad II exchange rate, which auctioned dollars for 51.86 bolívars in
March,28 is in operation for approximately 7 to 8 percent of currency exchanges29, it is not sufficient to source
enough dollars to the importers to boost supply to a level that would dampen inflation. Its operation also creates
fear that a massive devaluation is impending, which further limits foreign direct investment in Venezuela.
The effects of this restriction are devastating on Venezuelans. First, if companies are unable to access
dollars, foreign firms are unwilling to provide sufficient imports and domestic firms are unable to purchase the
imports that are available. Second, it creates demand for a black market dual economy for goods and encourages
manipulation of foreign currency allowances to secure bolívars at black market rate, something that President
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Maduro has railed against repeatedly.30 According to recent language, President Maduro believes that this is a
boycott of the system31, but individual actors are only willing to pay such high prices because it is the sole method
to secure scarce products. Third, foreign investors are unwilling to finance local businesses, which blocks access
to cheap capital and liquidity for Venezuelan small businesses.32
There are several “spiraling” factors at play in the Venezuelan economy that should be of particular
concern. First, high inflation creates short-term demand, as consumers want to stock up on supplies today before
the prices spike. The short-term demand actually pushes inflation even higher and accelerates the inflation
process. Rationing is not the solution, however, because it will fuel an explosion in the black market.
Second, when a black market is formed, the prices are already higher than market exchange rate because
the demand is high enough to risk illegal transactions. As inflation continues, the black market prices will only
continue to rise, which exacerbates the imbalance between the bolívar and the dollar. As a result, the supply of
dollars in Venezuela will continue to decrease and make firms less willing to operate in the country. Several
companies have ceased or reduced operations in the country, and if this continues, Venezuela will only become
less connected to the globalized economy.33 This does not serve the needs of the nation because the global market
is the only place where Venezuelans can acquire goods at the lowest possible prices. This scarcity further increases
demand for black market goods and fuels inflationary pressures.
The Sicad II system presents another threat. With the new system, investors are uncertain about where
the dollars would come from, considering that many firms will be competing for the limited dollars.34 Uncertainty
only drives down bond prices that could be a potential source of funding. If the supply of dollars continues to
decrease, repeated devaluations may be the only option in the future, something that is both financially damaging
and politically unpopular in the short run.
The fourth, and perhaps most frightening threat, is tied up in a theory known as the price-wage spiral,
which is a type of built-in inflation. A price-wage spiral occurs when inflationary expectations become so
prevalent that inflation becomes unstoppable. As business owners raise prices, wage earners must push their
nominal after-tax wages high to keep up with rising prices of the consumer price index.35 This threat may be
avoided by taking quick action against inflation, but will require drastic measures if it does occur.
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Curtailing Inflation: How to Undertake a Controlled Transition
In order to eliminate the fixed exchange rate, the overvalued bolívar must be devalued, just as Mexico did
in the early 1990s. However, doing so during a climate of rapid inflation only further degrades the buying power
of the bolívar and opens the market to hyperinflation. Mexico’s 1995 financial crisis was caused by a rapid
devaluation, rather than a strategic process of devaluation. To experience a soft landing, Venezuela must
simultaneously conduct a controlled devaluation of the bolívar, work to augment its market value through
domestic economic growth and curb inflation. It cannot initially accept a floating currency because the black
market value is so different from the official pegged rate. Because a pegged currency does protect against inflation
to some degree, it is essential to utilize this protection during the transition.
In order to promote domestic economic growth and dampen inflation, revenues must also be increased
so the government no longer needs to print massive quantities of bolívars to fund its domestic aid programs. To
boost revenue, Venezuela must shoulder some risks with its regional political capital. Under President Hugo
Chavez, the oil alliance PetroCaribe was established in 2005, lending oil to Caribbean countries at interest rates as
low as one percent and costing Venezuela up to $2.3 billion yearly.36 This could be mediated to some extent by
selling oil through a transparent, competitive bidding process, rather than giving away oil for next to nothing,
especially for countries in the alliance. Continuing to allow these countries to postpone payment will still be
feasible to a lesser extent than today. The upfront costs on these loans for PetroCaribe countries must be increased
for most nations in the alliance in order to alleviate Venezuela’s financing issues. Another benefit to this source of
funds is that most Caribbean countries are experiencing lower inflation than Venezuela, meaning their money will
hold more value when converted to U.S. dollars. Other government subsidies must also be reconsidered under
the current financial constraints. The oil subsidy instituted under Chavez is clearly no longer sustainable when so
many bolivars must be printed to secure the programs.
Maintaining an oil subsidy under current oil prices will continue to be devastating to the Venezuelans
economy, and the PetroCaribe program only further bankrupts the state for some meager political influence. While
these changes can only be taken with strong political backing and an educated articulation of long-term growth
for Venezuela, failing to make these changes will have much more disastrous implications. If the PetroCaribe
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program instantly collapses without any advance notice, or if the oil subsidy is pulled out from under consumers,
there could be broad economic turmoil or rampant domestic political unrest.
It is imperative to strengthen institutions in order to move away from a fixed exchange rate. To weaken
the black market and quell fears, the solution requires transparency. This includes banking and market
transparency, restraining corruption and increasing accountability through democratic processes. Measures must
be taken against rent-seeking behavior that undermines local business, including flocking to the cities to fight for
oil wealth37, by ensuring that oil is not the only profitable sector. Secret bank accounts and corruption that allows
oil magnates to avoid taxation are examples of behavior that must be eliminated. To stabilize the currency
exchange, policy statements should be released indicating the amount of dollars that will be available on the Sicad
II system, and must be followed to the letter. To bolster foreign businesses that provide imports, dollar access will
have to be substantially higher than what is available today.
To curtail the devaluation of the bolívar, it is important to foster domestic industry other than oil
extraction. This will be difficult due to the strong case of Dutch disease, or resource curse, that Venezuela has,
but will be possible by using government intervention to cultivate an export-oriented development model, similar
to success in Mexico and East Asia in the 1980s and 1990s.38 It will also be crucial to put away stabilization funds
when oil prices are high for the purpose of mediating economic turmoil when oil prices plummet, as Joseph
Stiglitz has recommended for developing economies.39 Rising domestic production should reverse the devaluation
slide of the bolívar.
In order to move between the current peg and a floating bolívar, Venezuela should utilize a crawling peg
to devalue the currency periodically against the dollar. In this way, market panic can be avoided by not enacting an
instantaneous adjustment to market value. Hopefully, as inflation slows with the decreased demand from adjusted
subsidies, greater Sicad II operation and bolstered domestic industry, the disparity between the bolívar and the
dollar will diminish as the bolívar increases in value. At some point in the future, the crawling peg and rising black
market bolívar value will converge, at which point a floating currency can be established. This will prevent a
financial crisis similar to Mexico’s in 1995.
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A Greater Venezuelan Future
One disquieting fact demands that reform come immediately: Venezuela truly is on the brink of
hyperinflation. Immediate efforts must be taken to curb inflation. It is then imperative to begin institutional
change to transition from a fixed exchange rate to a floating currency. While inward focused development in the
model of the Mexican Miracle will not be effective, donning the Golden Straitjacket will open Venezuela to
growth and stability. By donning the Golden Straitjacket, Venezuela can achieve optimal economic growth,
resolve local unrest and garner greater respect among the nations of the world. The path to reform must be
marked by transparency and comprehensive political support to ensure that domestic unrest or broad economic
turmoil do not erupt.
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Easterlin, R. "Why Isn't the Whole World Developed?", Appendix Table 1. The Journal of Economic History,
Vol. 41 No. 1, 1981
2 Julio A. Santaella, “Economic Growth in Mexico: Searching for Clues to its Slowdown,” Inter-American
Development Bank, December 1998. Accessed at http://www.iadb.org/regions/re2/santafin.pdf.
3 Raphael Bergoeing, Patrick J. Kehoe and Timothy J. Kehoe, “A Decade Lost and Found: Mexico and Chile
in the 1980s,” University of Minnesota, September 2001, revised March 2007. Accessed at
http://www.econ.umn.edu/~tkehoe/papers/mexico-chile.pdf.
4 Thomas Oatley, International Political Economy, Pearson (New York, NY), pp. 255.
5 Dani Rodrik, “How Far Will Economic Integration Go?,” Journal of Economic Perspectives, American Economic
Association (Nashville, TN), pp. 180.
6 Jeffrey Frieden, “Globalization and Exchange Rate Policy,” International Political Economy, edited by Jeffrey
Frieden, David Lake and Lawrence Broz, W. W. Norton and Company (New York, NY), pp. 290-1.
7 Daniel Dresner, “Globalization and Policy Convergence,” International Political Economy, edited by Jeffrey
Frieden, David Lake and Lawrence Broz, W. W. Norton and Company (New York, NY), pp. 203.
8 Thomas Oatley, International Political Economy, Pearson (New York, NY), pp. 52.
9 Thomas Friedman, The Lexus and the Olive Tree, Farrar, Straus and Giroux (New York, NY), pp. 86.
10 Dani Rodrik, “How Far Will Economic Integration Go?,” Journal of Economic Perspectives, American
Economic Association (Nashville, TN), pp. 182.
11 Thomas Oatley, International Political Economy, Pearson (New York, NY), pp. 205.!
12 William Neuman, “Profits Vanish in Venezuela After Currency Devaluation,” The New York Times (New
York, NY), July 8, 2014. Accessed at http://www.nytimes.com/2014/07/09/business/profits-vanish-invenezuela-after-currency-devaluation.html?_r=0.
13 Venezuela: Risk Assessment Overview,” The Economist Intelligence Unit, updated November 27, 2014.
Accessed at
http://country.eiu.com.proxy.library.nd.edu/article.aspx?articleid=1112549895&Country=Venezuela&topic=
Risk&subtopic=Credit+risk&subsubtopic=Overview&aid=1&oid=1112549895.
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Neuman, “Profits Vanish in Venezuela After Currency Devaluation,” New York Times.
15!Thomas Oatley, International Political Economy, Pearson (New York, NY), pp. 208-11.
16 Daniel Wallis, “Central bank's Merentes named new Venezuela finance minister,” Reuters News (London,
UK), April 23, 2013. Accessed at http://www.reuters.com/article/2013/04/22/us-venezuela-electionmerentes-idUSBRE93L01S20130422.
17 Anatoly Kurmanaev and Corina Pons, “Venezuela Looks to Army General to Damp Spiraling Prices,”
Bloomberg News (New York, NY), January 16, 2014. Accessed at http://www.bloomberg.com/news/2014-0116/venezuela-names-new-finance-minister-promises-currency-reform.html.
18 Michelle Caruso-Cabrera, “Creating Inflation is Easy, Just Look at Veneuela,” CNBC News (Englewood
Cliffs, New Jersey), October 13, 2014. Accessed at http://www.cnbc.com/id/102082864.
19 Tom Blackwell, “Venezuela crippled by 56% inflation and social unrest, but filling a car with gas still
‘cheaper than a bus ticket’,” The National Post (Toronto, Canada), April 4, 2014. Accessed at
http://news.nationalpost.com/2014/04/04/venezuela-crippled-by-56-inflation-but-filling-a-car-with-gas-stillcheaper-than-a-bus-ticket/#__federated=1.
20 Minaya and Vyas, The Wall Street Journal.
21 “What's behind Venezuela's economic woes?”, BBC News (London, UK), January 15, 2014. Accessed at
http://www.bbc.com/news/world-latin-america-25745959.
22 BBC News.
23 Vyas, The Wall Street Journal.
24 Kejal Vyas, “Venezuela Annual Inflation Rose to 63.4% in August,” The Wall Street Journal (New York, NY),
September 9, 2014. Accessed at
http://www.wsj.com/articles/venezuela-annual-inflation-rose-to-63-4-in-august-1410309020.
25!John Paul Rathbone, “Venezuela finance minister Rodolfo Marco Torres on charm offensive,” Financial
Times (London, UK). April 1, 2014. Accessed at http://www.ft.com/intl/cms/s/0/8c042bce-b8c3-11e3835e-00144feabdc0.html#axzz3Lp0aDwmN.
26 Víctor Salmerón, “Venezuelan bolivar in the most overvalued currency in the world,” El Universal (Caracas,
Venezuela), July 7, 2014. Accessed at http://www.eluniversal.com/economia/140707/venezuelan-bolivar-isthe-most-overvalued-currency-in-the-world.
27 Neuman, “Profits Vanish in Venezuela After Currency Devaluation,” New York Times.
28 Jonathan Wheatley, “Investors cheer after Venezuela eases foreign exchange controls,” The Financial Times
(London, UK), March 25, 2014. Accessed at http://www.ft.com/intl/cms/s/0/c6a2b874-b42a-11e3-a10200144feabdc0.html#axzz3Lp0aDwmN.
29 Wheatley, Financial Times.
30 BBC News.
31 BBC News.
32!Sergio Schmukler, “Financial Globalization: Gain and Pain,” International Political Economy, edited by Jeffrey
Frieden, David Lake and Lawrence Broz, W. W. Norton and Company (New York, NY), pp. 320.
33 Neuman, “Profits Vanish in Venezuela After Currency Devaluation,” New York Times.
34 Wheatley, Financial Times.
35 Alexandra Guisinger, lecture entitled “Society-centered v. State-centered explanations of Monetary and
Exchange Rate Policies,” University of Notre Dame, October 16, 2014.
14
36
“Single point of failure,” The Economist (New York, NY), October 4, 2014. Accessed at
http://www.economist.com/news/americas/21621845-venezuelas-financing-programme-leavesmany-caribbean-countries-vulnerable-single-point.
Carlos A. Rossi, “Oil Wealth and the Resource Curse in Venezuela,” International Association for Energy
Economics (Chicago, IL), 3Q 2011, pp. 14.
38!Thomas Oatley, International Political Economy, Pearson (New York, NY), pp. 139-40.
39 Joseph Stiglitz, “We can now cure Dutch disease,” The Guardian, August 18, 2004. Accessed at
http://www.theguardian.com/business/2004/aug/18/comment.oilandpetrol.
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