Page 94 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 80-98

Service sector does not follow the same trend as resource sector (Fig.7). Generally,

services sector contributes from 35 to 50% of country’s GDP. So, there is no opportunity to

clearly detect the following symptom: 3) Growth of the services sector.

Analysis of Venezuelan currency appreciation is rather complicated. First of all, there was a

strong devaluation in 1983. Second, there was a money reform in 2007 when 1000 Bolivars were

exchanged to 1 Bolivar Fuerte (VEB). And third, since 2003 the adoption of exchange control has

been established with the fixed VEB-USD exchange rate which changed several times and which

is highly deviating from the black market exchange rate in the country. In order to make a review

of Venezuelan currency exchange rate, much more sophisticated analysis is required.

So, the symptom: 5) appreciation of local currency in the present survey cannot be clearly

identified.

For the analysis of the symptom 6) growth of real wage rate in the absence of real wage

rate historical data an indirect indicator – GDP per capita is used. This approach is based on the

statement of Berry (2008: 162) regarding the real wage rate in Venezuela: “during the fast

growth period, wages appear to have risen more or less commensurate with the growth of output

per capita.” where output per capita is a function of GDP per capita.

Fig.11. GDP per capita in Venezuela in 1980-2012 in current USD.

Korobeinikov, 2014, based on statistical data of World Bank

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