EXCHANGE-RATE POLICIES FOR DEVELOPING COUNTRIES: WHAT HAVE WE LEARNED? WHAT DO WE STILL NOT KNOW?

The 1997–1998 Asian crisis, with its offshoots in Eastern Europe and Latin America, has reignited the debate about appropriate exchange-rate policies for developing countries. One widely shared conclusion from this episode is that adjustable or crawling pegs are extremely fragile in a world of volatile capital movements. The pressure resulting from massive capital flow reversals and weakened domestic financial systems was too strong even for countries that followed sound macroeconomic policies and had large stocks of reserves. As a consequence, the polar regimes of a "hard pegs" (such as a currency board), or a clean float, are enjoying new popularity. This paper argues that, while currency boards or even dollarization may be justified in some extreme cases, they are not appropriate for all developing countries. The recommendations formulated on the basis of the Mundell-McKinnon criteria for the optimum currency are considered still sensible today. Currency boards face serious implementation problems. One is the choice of the currency to peg to and at what rate; another is the need to ensure stability of the domestic financial system in the absence of a domestic lender of last resort. Floating appears to have wider applicability. As Friedman already argued in the early 1950s,if prices move slowly, it is both faster and less costly to move the nominal exchange rate in response to a shock that requires an adjustment in the real exchange rate. But for exchange-rate flexibility to be stabilizing, it has to be implemented by independent central banks whose commitment to low inflation is credible. Ongoing depreciations that follow from imprudent of opportunistic monetary behaviour will surely come to be expected by agents, and hence will have no real effect; occasional depreciations that respond exclusively to unforecastable shocks will, almost by definition, have real effects. But floating also faces questions of implementation. Given that no central bank completely abstains from intervention in currency markets, what principles should govern such intervention? The paper elaborates on a number of points in this regard on which recent experience is likely to be instructive, but on which more research is needed. Finally, any exchange-rate regime, and especially one of flexible rates, requires complementary policies to increase its chances of success. In this context, some have suggested the use of capital controls; less controversial is the need for prudential regulation of the financial system and for counter-cyclical fiscal policy.

Alternative Monetary Rules in the Open-Economy: a Welfare-Based Approach

Using an optimizing model we compare alternative monetary policy rules and exchange rate regimes for a small stochastic open economy with imperfect competition and short run price rigidity. The criteria to choose among rules and regimes are obtained using a welfare criterion derived from the utility function of the representative agent. The main findings of this paper are that, depending on what shocks affect this economy, the effects of inflation targeting on output and inflation volatility depend crucially on the exchange rate regime and the inflation index being targeted. With regard to the exchange rate, we find that the loss in agents’ welfare is much higher under managed exchange rates than under flexible rates in presence of real shocks, while for nominal shocks the reverse is true. As far as the definition of inflation targeting index is concerned, domestic inflation appears to outperform the CPI. Finally, flexible inflation targeting is welfare superior to strict targeting.

La disciplina fiscal y la elección de régimen cambiario

(Disponible en idioma inglés únicamente) La opinión convencional es que los tipos de cambio fijos permiten una mayor disciplina fiscal que los tipos flexibles, pero las experiencias recientes en Europa, la experiencia de los países subsaharianos en los años 80 y los antecedentes de los intentos de estabilización en América Latina suscitan dudas sobre esta opinión. Para analizar este acertijo presentamos un modelo intertemporal estándar con perfecta movilidad del capital y flexibilidad de precios, en el que la política fiscal es determinada de manera endógena por una autoridad fiscal maximizadora.

Quid pro Quo: National Institutions and Sudden Stops in International Capital Movements

The paper explores the incidence of sudden stops in capital flows on the incentives for building national institutions that secure property rights in a world where sovereign defaults are possible equilibrium outcomes. Also thepaper builds upon the benchmark model of sovereign default and direct creditor sanctions by Obstfeld and Rogoff (1996). In their model it is in the debtor country’s interest to “tie its hands” and secure the property rights of lenders as much as possible because this enhances the credibility of the country’s romise to repay and prevents default altogether. It incorporate two key features of today’s international financial markets that are absent from the benchmark model: the possibility that lenders can trigger sudden stops in capital movements, and debt contracts in which lenders transfer resources to the country at the start of the period, which have to be repaid later. The papershows that under these conditions the advice “build institutions to secure repayment at all costs” may be very bad advice indeed.

Must Original Sin Cause Macroeconomic Damnation?

Original sin, coupled with other financial imperfections, causes macroeconomic penance of two kinds: adverse shocks have larger and more persistent effects and monetary policy becomes less effective as a shock absorber. But macroeconomic damnation is not inevitable: in some cases, suitable changes in money and exchange rates can still partially stabilize output, investment and consumption.

Availability and accessibility of opioids for pain and palliative care in Colombia: a survey study

Introducción: El acceso a medicamentos esenciales, incluidos los opioides, es un componente del derecho a la salud. Objetivo: Identificar las barreras de disponibilidad y acceso a los opioides para dolor y cuidados paliativos. Métodos: Encuesta virtual a prescriptores colombianos. Las barreras de disponibilidad se analizaron para cada centro (distribución y/o dispensación ) y las barreras de acceso se analizaron por tipo. Los análisis descriptivos se realizaron utilizando frecuencias relativas. La sig-nificancia dentro de categorías y regiones se midió utilizando la prueba exacta de Fischer. Resultados: De los 1208 prescriptores invitados, 806 (66.7%) respondieron la encuesta. Disponibilidad: el 76,43% reportó barreras. La barrera más citada fue la relacionada con las “farmacias autorizadas por las aseguradoras de salud”, donde los opioides con frecuencia no están disponibles. Acceso: el 74,6% reportó barreras. Se citó con mayor frecuencia la “Dificultad para obtener la autorización de pago de medicamentos por parte de las aseguradoras”. Se observaron diferencias significativas entre regiones y “costos” (p=0,02). La falta de coordi-nación entre las entidades de adquisición y distribución afecta la disponibilidad. La limitada conciencia y los procedimientos burocráticos afectan la accesibilidad. Conclusiones: Existen barreras de disponibilidad y acceso a los opioides en Colombia, las cuales están relacionadas con la estructura dispo-nible para garantizar un suministro equitativo. Desde el punto de vista de los prescriptores, los problemas relacionados con la disponibili-dad de las farmacias, la prescripción y el costo de los medicamentos, obstaculizan el tratamiento adecuado del dolor.Abstract Introduction: Access to essential medicines, including opioids, is a component of the right to health. Objective: To identify barriers to opioid availability and accessibility for pain and palliative care. Methods: Online survey with Colombian prescribers. Availability barriers were analyzed for each facility (distribution and/or dispensing). Accessibility barriers were analyzed by type. Descriptive analyses were conducted using relative frequencies. Significance within categories and regions was measured using Fisher's exact test. Results: Out of 1,208 prescribers invited, 806 (66.7%) completed the survey. Availability: 76.43% reported barriers. The most cited barrier was “Pharmacies authorized by health insurance companies”, where opioids are frequently unavailable. Accessibility: 74.6% reported barriers. Most frequently cited was “Difficulty securing payment authorization for medication from health insurance companies”. Significant differences were observed in terms of regions and “Cost” (p=0.02). Lack of coordination among procuring and distributing agencies affects availability. Limited awareness and bureaucratic procedures affect accessibility. Conclusions: There are barriers to opioid availability and access in Colombia, related to the existing structure for guaranteeing equitable supply. From the perspective of healthcare providers, problems related to pharmacy availability, prescription and cost of medicines hinder pain treatment

Evaluación financiera aplicando el método CAMEL en la Cooperativa de Ahorro y Crédito Chibuleo Ltda., cantón Ambato, provincia Tungurahua, periodo 2018

El presente trabajo de titulación fue realizar una evaluación financiera aplicando el método CAMEL en la Cooperativa de Ahorro y Crédito Chibuleo Ltda., cantón Ambato, provincia Tungurahua, período 2018, con el propósito determinar la posición financiera de la COAC y el mejoramiento de la toma de decisiones empresariales para la mitigación de los riesgos empresariales. En el desarrollo de la evaluación financiera a la cooperativa se aplicó métodos y técnicas de investigación, como la observación para diagnosticar la situación actual de la entidad, además se realizó una entrevista al gerente y encuestas al personal administrativo y financieros de la entidad para obtener información primaria. Por el cual, se identificó una serie de deficiencias, tales como: mantiene una inadecuada provisión de cuentas incobrables, deficiente recuperación de cartera vencida y decrecimiento en la colocación de créditos por parte de los oficiales de negocios. Como resultados finales, se determinó que la gestión administrativa y financiera para captar, colocar y recuperar cartera vencida es adecuada, es así que el índice de morosidad es moderado. Se concluyó que el personal de la cooperativa no cumple con las metas de recuperación de cartera lo que provoca que el grado de morosidad se incremente y genere iliquidez financiera. Se recomendó a la máxima autoridad de la cooperativa acatar las recomendaciones del informe financiero e implementar un plan de acción con la finalidad de garantizar el crecimiento económico de la organización y lograr las metas planteadas.The present thesis work carried out a financial evaluation through the application of the CAMEL method at the Cooperativa de Ahorro y Crédito Chibuleo Ltda. (COAC), located in Ambato canton, Tungurahua province, term 2018, in order to determine the financial position of the institution and the improvement of the decision making process to mitigate business risks. During the financial evaluation of the institution, research methods and techniques were applied, such as the observation technique to diagnose its current situation, in addition, an interview to the manager and surveys to the administrative and financial staff in order to obtain primary information. Thus, a series of deficiencies were identified, such as: the institution shows an inadequate provision for debts, poor recovery of past due loans and a reduction in the placement of loans on account of business executives. As a final result, it was determined that the administrative and financial management to attract, place and recover past due portfolio is adequate so that the risk of default to recover due loans is moderate. It was concluded that the employees do not meet the portfolio recovery goals, which causes that the default ratio increases and generates financial illiquidity. The highest authority of the institution was recommended to follow the recommendations established in the financial report to implement an action plan in order to guarantee the economic institutional growth and achieve the objectives planned