Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

Achieving universal health coverage goals in Thailand: the vital role of strategic purchasing

Abstract: Strategic purchasing is one of the key policy instruments to achieve the universal health coverage (UHC) goals of improved and equitable access and financial risk protection. Given favourable outcomes of Universal Coverage Scheme (UCS), this study synthesized strategic purchasing experiences in the National Health Security Office (NHSO) responsible for the UCS in contributing to achieving UHC goals. The UCS applied the purchaser–provider split concept where NHSO, as a purchaser, is in a good position to enforce accountability by public and private providers to the UCS beneficiaries, through active purchasing. A comprehensive benefit package resulted in high level of financial risk protection as reflected by low incidence of catastrophic health spending and impoverished households. The NHSO contracted the District Health System (DHS) network, to provide outpatient, health promotion and disease prevention services to the whole district population, based on an annual age-adjusted capitation payment. In most cases, the DHS was the only provider in a district without competitors. Geographical monopoly hampered the NHSO to introduce a competitive contractual agreement, but a durable, mutually dependent relationship based on trust was gradually evolved, while accreditation is an important channel for quality improvement. Strategic purchasing services from DHS achieved a pro-poor utilization due to geographical proximity, where travel time and costs were minimal. Inpatient services paid by Diagnostic Related Group within a global budget ceiling, which is estimated based on unit costs, admission rates and admission profiles, contained cost effectively. To prevent potential under-provisions of the services, some high cost interventions were unbundled from closed end payment and paid on an agreed fee schedule. Executing monopsonistic purchasing power by NHSO brought down price of services given assured quality. Cost saving resulted in more patients served within a finite annual budget.

Cryptocurrencies, network effects, and switching costs

Abstract: "Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions. " --Timothy May, 1992 Recent technological advances have significantly lowered the cost of processing electronic payments. Electronic banking and digital wallets (also called e-wallets) allow individuals to transfer funds securely. Whereas these services were used almost exclusively for remote transactions in the past, the widespread adoption of smartphones has made it easier to make and receive payments in person with electronic bank accounts and digital wallets. More recently, the development of inexpensive card-reading devices has enabled virtually anyone to accept electronic payments. (1) With a simple click, tap, or swipe, individuals can now transact without having to handle physical cash or write checks. At the same time, there has been a growing concern over the safety and stability of some of the most widely used currencies. Successive rounds of quantitative easing in the United States have been met with opposition, as some users of the dollar fear the currency will be worth significantly less in the future. Similarly, instability in Europe prompts fears of devaluation or outright collapse of the euro. Although many continue to put their trust in dollars and euros, uncertainty abounds. In this context, a small but vocal minority has turned to cryptocurrencies. Cryptocurrencies are digital alternatives to traditional government-issued paper monies. Cryptography is used to ensure transactions are secure, to prevent users from spending the same balance more than once, and to govern the supply of digital notes in circulation. Some cryptocurrencies are decentralized, thereby enabling quasi-anonymous transactions and making it difficult for governments to regulate. Moreover, the electronic nature of cryptocurrencies means they are relatively easy to use across international borders. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, why have cryptocurrencies failed to gain widespread acceptance? I offer a simple explanation based on network effects and switching costs. In order to articulate the problem that agents considering cryptocurrencies face, I employ a simple model developed by Dowd and Greenaway (1993). The model demonstrates that agents may fail to adopt an alternative currency when network effects and switching costs are present, even if all agents agree that the prevailing currency is inferior. The limited success of bitcoin--almost certainly the most popular cryptocurrency to date--serves to illustrate. Of course, bitcoin has some properties that many would view as undesirable. For example, it is not supported by a sovereign nation and might be prone to hacker attacks. Its value has also fluctuated significantly over the last few years. (2) Although these features may be all that is required to account for its failure to gain widespread acceptance, proponents of bitcoin often take its superiority for granted. The model explored herein demonstrates that, even if bitcoin is superior, it might still fail to gain widespread acceptance. After briefly surveying episodes of successful monetary transition, I conclude that cryptocurrencies like bitcoin are unlikely to generate widespread acceptance in the absence of either significant monetary instability or government support. I. A MODEL OF CURRENCY ACCEPTANCE WITH NETWORK EFFECTS AND SWITCHING COSTS In order to explore currency competition, monetary unionization, and currency substitution, Dowd and Greenaway (1993) develop a simple model of currency acceptance. Their approach differs from earlier models in two important respects. First, they assume money is subject to a network effect. …

Can real exchange rate undervaluation boost exports and growth in developing countries? Yes, but not for long

Abstract: A policy of managed real undervaluation may have been an important factor behind the success of East Asia's export-led growth model. But current discussions over the value of China's currency demonstrate the controversy this kind of policy can generate. Although a managed real undervaluation can enhance domestic competitiveness, it is difficult to sustain both economically and politically in the post-crisis environment. The authors show that a real undervaluation works only for low-income countries, and only in the medium term.

Medium- to Long-Run Implications of High Food Prices for Global Nutrition

Abstract: The combined food, fuel, and financial crises of 2007-2009 had severe and widespread negative impacts around the world. Two key questions challenging governments were: how long would the high prices last and with what effects on food security and nutrition over the longer run? This paper considers the drivers of the crisis and explores if, unlike past shocks, the recent price increases reflect structural changes in food price formation that will have lasting global implications. New cross-commodity relationships allowed prices to spike, although there was no shortage of food at the global level nor indeed a significant downturn in recent yields. Yet recent record levels of farm production were also mirrored by growing numbers of people chronically undernourished and/or micronutrient deficient. The gap between supply and need was underpinned by growing urban demand, consumption of processed and higher-value foods (including meat), biofuel policy, and purchasing power erosion, but also by short-term market-distorting policies implemented by governments responding to perceived shortages of food. Thus, the impact of future food price crises will depend largely on what policymakers chose to do in response to the peaks and what they do not do during the troughs. Appropriate investments are urgently needed not just in smallholder developing country agriculture, but in effective food policies and targeted programming that can reverse the recent negative trends in nutrition and that support access globally to improved diet quality as well as food quantity.