Monetary policy strategies for Latin America

The authors examine possible monetary policy strategies for Latin America that may help lock in the gains the region attained in the fight against inflation in the 1990s. Instead of focusing the debate about the conduct of monetary policy on whether the nominal exchange rate should be fixed or flexible, the focus should be on whether the monetary policy regime appropriately constrains discretion in monetary policymaking. Three basic frameworks deserve serious discussion as possible long-run strategies for monetary policy in Latin America. The authors examine the advantages and disadvantages of a hard exchange-rate peg, monetary targeting, and inflation targeting, in light of monetary policy's recent track record in several Latin American countries, looking for clues about which of the strategies might be best suited to economies in the region. The answer: It depends on the country's institutional environment. Some countries appear not to have the institutions to constrain monetary policy if discretion is allowed. In those countries, there is a strong argument for hard pegs, including full dollarization, that allow little or no discretion to monetary authorities. In countries such as Chile, which can constrain discretion, inflation targeting is likely to produce a monetary policy that keeps inflation low yet appropriately copes with domestic and foreign shocks. Monetary targeting as a strategy for Latin America is not viable because of the likely instability of the relationship between inflation and monetary aggregates, of which there is ample international evidence. No monetary strategy can solve the basic problems that have existed in Latin American economies for a long time. The authors welcome the recent move in Latin American countries toward inflation targeting, but say no policy will succeed unless government policies also create the right institutional environment.Financial Intermediation,Payment Systems&Infrastructure,Fiscal&Monetary Policy,Economic Theory&Research,Banks&Banking Reform,Financial Intermediation,Banks&Banking Reform,Economic Stabilization,Economic Theory&Research,Macroeconomic Management

The Role of opinion leaders in the diffusion of new knowledge: the case of integrated pest management

The paper reviews the literature on the characteristics and impact of opinion leaders on the diffusion of new knowledge, concluding that there is no clear evidence on whether opinion leaders are more effective if they are similar in socio-economic attributes to the other farmers rather than superior to would-be followers. A multivariate analysis of the changes in integrated pest man- agement knowledge in Indonesia among follower farmers over the period 199198 indicates that opinion leaders who are superior to followers, but not excessively so, are more effective in transmit- ting knowledge. Excessive socio-economic distance is shown to reduce the effectiveness of diffusion. The paper then derives operational implications of the empirical results

Debt Intolerance

This paper introduces the concept of "debt intolerance," which manifests itself in the extreme duress many emerging market economies experience at levels of indebtedness that would seem manageable by advanced country standards. The paper argues that "safe" external debt-to-GNP thresholds for debt-intolerant countries depend on the country's default and inflation history and may be as low as 15 percent in some cases. Debt intolerance is linked to the phenomenon of serial default that has plagued many countries over the past two centuries. Understanding and measuring debt intolerance is fundamental to assessing the problems of debt sustainability, debt restructuring, capital market integration, and the scope for international lending to ameliorate crises. The paper makes a first pass at quantifying debt intolerance, including delineating debtors' "clubs" and regions of vulnerability, based on a history of credit events for a large number of countries going back to the 1820s.macroeconomics, Debt Intolerance

Addicted to Dollars

Dollarization, in a broad sense, is increasingly a defining characteristic of many emerging market economies. How important is this trend quantitatively and how important is it for the conduct of monetary policy and the choice of exchange rate regimes? Though these questions have become a hot topic in both the theory and policy literature, most efforts are remarkably uninformed by evidence, in no small part because meaningful data has been lacking, except for a very narrow range of assets. This paper attempts to move the discussion forward and shed light on the critical questions by proposing a measure of dollarization that is broad both conceptually and in terms of country coverage. We use this measure to identify trends in the evolution of dollarization in the developing world in the last two decades, and to ascertain the consequences that dollarization has had on the effectiveness of monetary and exchange rate policy. We find that, contrary to the general presumption in the literature, a high degree of dollarization does not seem to be an obstacle to monetary control or to disinflation. A level of dollarization does, however, appear to increase exchange rate pass-through, reinforcing the claim that fear of floating' is a greater problem for highly dollarized economies. We also review the developing countries' record in combating their addiction to dollars. Concretely, we try to explain why some countries have been able to avoid certain forms of the addiction, and examine the evidence on successful de-dollarization.

Fact or artefact : the impact of measurement errors on the farm size - productivity relationship

This paper revisits the role of land measurement error in the inverse farm size and productivity relationship. By making use of data from a nationally representative household survey from Uganda, in which self-reported land size information is complemented by plot measurements collected using Global Position System devices, the authors reject the hypothesis that the inverse relationship may just be a statistical artifact linked to problems with land measurement error. In particular, the paper explores: (i) the determinants of the bias in land measurement, (ii) how this bias varies systematically with plot size and landholding, and (iii) the extent to which land measurement error affects the relative advantage of smallholders implied by the inverse relationship. The findings indicate that using an improved measure of land size strengthens the evidence in support of the existence of the inverse relationship

Through the lens of Sgr A*: identifying strongly lensed Continuous Gravitational Waves beyond the Einstein radius

Once detected, lensed gravitational waves will afford new means to probe thematter distribution in the universe, complementary to electromagnetic signals.Sources of continuous gravitational waves (CWs) are long-lived and stable,making their lensing signatures synergic to short mergers of compact binaries.CWs emitted by isolated neutron stars and lensed by Sgr A$^*$, thesuper-massive black hole at the center of our galaxy, might be observable bythe next generation of gravitational wave detectors. However, it is unknownunder which circumstances these sources can be identified as lensed. Here weshow that future detectors can distinguish lensed CWs and measure allparameters with precision $\sim 1-10\%$ for sources within $2-4$ Einstein radiiof Sgr A$^*$, depending on the source's distance. Such a detection, whichrelies on the relative motion of the observer-lens-source system, can beobserved for transverse velocities above 3 km/s. Therefore, the chances ofobserving strongly lensed neutron stars increase by one order of magnitude withrespect to previous estimates. Observing strongly lensed CWs will enable novelprobes of the galactic center and fundamental physics.<br

Monetary Policy Strategies for Latin America

The paper examines possible monetary policy strategies for Latin America that may help lock-in the gains in the fight against inflation attained by the region during the 1990s. We start by calling for a refocus of the debate about the conduct of monetary policy away from thinking that it is about whether the nominal exchange rate should be fixed or flexible. Instead we argue that the focus should be on whether the monetary policy regime appropriately constrains discretion in monetary policymaking. This focus suggest that there are three basic frameworks that deserve serious discussion as possible, long-run strategies for monetary policy in Latin America: a hard exchange-rate peg, monetary targeting, and inflation targeting. We look at the advantages and disadvantages of each of these strategies and then examine the recent track record of monetary policy in some Latin American countries for clues as to which of the three strategies might be best suited to economies in the region.

Retromode imaging modality of epiretinal membranes

(1) Purpose: To determine the characteristics of macular epiretinal membranes (ERM) using non-invasive retromode imaging (RMI) and to compare retromode images with those acquired via fundus autofluorescence (FAF) and fundus photography. (2) Methods: Prospective observational case-series study including patients with macular ERM with no other ocular disease affecting their morphology and/or imaging quality. We compared RMI, FAF and fundus photography features by cropping and overlapping images to obtain topographic correspondence. (3) Results: In total, 21 eyes (21 patients) affected by ERM were included in this study. The mean area of retinal folds detected by RMI was significantly higher than that detected by FAF (11.85 ± 3.92 mm2 and 5.67 ± 2.15 mm2, respectively, p &lt; 0.05) and similar to that revealed by fundus photography (11.85 ± 3.92 mm2 and 10.58 ± 3.45 mm2, respectively, p = 0.277). (4) Conclusions: RMI appears to be a useful tool in the evaluation of ERMs. It allows for an accurate visualization of the real extension of the retinal folds and provides a precise structural assessment of the macula before surgery. Clinicians should be aware of RMI's advantages and should be able to use them to warrant a wide range of information and, thus, a more personalized therapeutic approach

Liquid–liquid phase separation of tau: From molecular biophysics to physiology and disease

Biomolecular condensation via liquid–liquid phase separation (LLPS) of intrinsically disordered proteins/regions (IDPs/IDRs), with and without nucleic acids, has drawn widespread interest due to the rapidly unfolding role of phase-separated condensates in a diverse range of cellular functions and human diseases. Biomolecular condensates form via transient and multivalent intermolecular forces that sequester proteins and nucleic acids into liquid-like membrane-less compartments. However, aberrant phase transitions into gel-like or solid-like aggregates might play an important role in neurodegenerative and other diseases. Tau, a microtubule-associated neuronal IDP, is involved in microtubule stabilization, regulates axonal outgrowth and transport in neurons. A growing body of evidence indicates that tau can accomplish some of its cellular activities via LLPS. However, liquid-to-solid transition resulting in the abnormal aggregation of tau is associated with neurodegenerative diseases. The physical chemistry of tau is crucial for governing its propensity for biomolecular condensation which is governed by various intermolecular and intramolecular interactions leading to simple one-component and complex multi-component condensates. In this review, we aim at capturing the current scientific state in unveiling the intriguing molecular mechanism of phase separation of tau. We particularly focus on the amalgamation of existing and emerging biophysical tools that offer unique spatiotemporal resolutions on a wide range of length- and time-scales. We also discuss the link between quantitative biophysical measurements and novel biological insights into biomolecular condensation of tau. We believe that this account will provide a broad and multidisciplinary view of phase separation of tau and its association with physiology and disease