Wednesday, 13 August 2014

Venezuela's correlations

Here you can see in red the standard deviation of GDP growth for several countries with data from 1990 until now. I used World Bank data up to 2013 and I used the ECLAC projections for 2014 and, for Norway, my educated guess. As you can see, Venezuela stands as a particularly unstable country and Argentina follows. Reality will prove worse as ECLAC GDP growth for Venezuela is likely to be extremely optimistic at -0.5%/

The links between the countries represent the Pearson correlation Pearsons r correlation between GDP of those nations. The correlation is rather weak but there seems to be something there with Panama, Ecuador and Colombia, even though the relationship with each one of those countries develops at different levels. For instance: Panama is one of the main benefactors of Venezuela's investment money, including money to be laundered but exports much less than Colombia. Norway and Venezuela, on the other hand, hardly have anything together but both countries benefit from high oil prices. The difference  is that Norwegians have sustainable development as core policy and Venezuelan politicians don't even grasp the idea.

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