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Blog #8

What I think about the course

This have been a particular year since the pandemic has changed the way we teach and learn. We were expecting face to face classes but everything happened in a different way. We had to adapt quickly. However, it didn´t stop us in the learning road.

Even though the situation, I can point out many aspects thas I learn in this course: English for economics 3.

One aspect to remark is the technical language I learned and the context it is used.

I also improved my knowledge in economic field, and I really liked that. I was able to plan and manage my time and develop stronger communication skills

I improved my pronunciation. I can express  myself better than I did before and   it makes me easier to understand what is other people saying. I enjoyed working with my classmates because I learned a lot from them.

The professor is very knowledgeable about the topics and she transmits very well the information. Besides, she plans very dynamic lessons that make the group focus on the topic.

I am very thankful for this because at the beginning I was afraid for the course to be boring, but at the end my worries disappeared.

If somebody asked me for this course, I would recommend to take it with the professor Monica. 

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Blog #7

Hyperinflation

Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy.

Some countries that struggled with hyperinflation are Zimbabwe, South Sudan and Venezuela.

In the case of Zimbabwe, the hyperinflation began in February 2007. Zimbabwe's peak month of inflation is estimated at 79.6 billion percent month-on-month, 89.7 sextillion percent year-on-year in mid-November 2008.

In Venezuela, the struggle with high rates of prices started under the government of Hugo Chaves, and continued under Nicolas Maduro´s administration. The inflation rate in this country exceded 1 million percent in 2018.

For South Sudan, the Highest leve lof infation was 549.40 percent. Although the hyperinflation in South Sudan was lower tan the hyperinflation in Venezuela and Zimbabwe, the society continues facing problems like poverty and hungry.

Central Bank independence.

Central bank independence refers to the freedom of monetary policymakers from direct political or governmental influence in the conduct of policy.

One of the main reasons that the people and the pollicymakers decided to give Independence to the Central Banks is that in the past, poor central banking policies ultimately lead to governments outspending their own budget constraints, and that had consequences on the economy of the countries.

One of the consequences were diminish purchasing power, that causes cripling hyperinflation, like what happened in Zimbabwe, Soth Sudan and Venezuela.

For some Banks, mantain a low and stable inflation allows to provide a climate that is more favourable to sound, sustained economic growth and job creation. When inflation is low, consumers and businesses are better able to make long-range plans because they know that the purchasing power of their money will hold and will not be steadily eroded year after year.

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Blog #6

The importance of the Central Bank of Costa Rica

History

Banco Central de Costa Rica was founded in 1950 as a response of the increasing banking and economic activities in the country. It was created with the purpose of being the main authority in the field. It substituted the institution in charge at that time: Departmento Emisor. This last one belonged to the Banco Nacional de Costa Rica. In 1948, with the nationalization of the private banking (reception of public’s deposits) and the necessity of giving to the new National Banking System an accurate organic integration and a good orientation from the government, it was urgent to establish the Banco Central as an independent organ in charge of managing the economic and monetary policies.

Its role in Costa Rica’s economy

It is in charge of regulating exchange and monetary policies and it is part of the National Banking System. Its main duties are:

1.       Act as a state bank

2.       Control the monetary issue

3.       Give loans to commercial banks and to the government

4.       Manage the monetary policy

5.       Manage the financial policy

6.       Handle currency exchanges

The Central Bank must analyze the current situation in the country, in order to design strategies and policies that allow them to meet their objectives.

These policies must ensure the proper functioning of the country´s economy and boos economic growth in a healthy way.

The Central Bank can´t finance the State to reduce the deficit, but it can draw attention when punlic finances are out of balance.

https://www.bccr.fi.cr/seccion-sobre-bccr/rese%C3%B1a-hist%C3%B3rica 

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Blog #5

Bonds

A bond is a form of debt. You can loan your money to a company or to the goverment and they make the promise to pay you back your money and more because of the interest rates.

If you are thinking about to buy a bond, first you should compare the different types of bonds in the market.

In markets.businessinsider.com you can see the name of the different kind of bonds, the yield, the relative change, the absolute change and the trade time.

Also, you can search a specific bond by the name, de type, the rating, the yield and the different countries.

In my case, I prefer to buy a bond from Frontier Communications Corp. That has a yield of 96.0161%. In second place, I have the option to buy a bond from Diamond Offshore Drilling Inc., that has 90.1523% of yield. This information is from the date 21 june 2020.

Eurobonds

The difference between a bond and a Eurobond is that the Eurobond is denominated in a currency that it´s different tan the home currency of the country or the market in which it is issued.

Frequently, the Eurobonds are grouped by their currency, like the eurodollar or the Euro-yen bonds.

The main importance of a Eurobond is that they can help the countries or the organizations to raise capital while having flexibility to issue them in a different currency. Besides, the market of Eurobonds  has more flexibility tan the domestic markets.

In Costa Rica, the government made progress in 2019 to place US$1.5 billion bond in Eurobonds, in an effort to revive the economy of the country.

https://markets.businessinsider.com/bonds 

https://qcostarica.com/slowly-but-surely-costa-rica-bond-issue-heads-for-port/

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Blog #4

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Blog #3

Ruth Smith

San José, Costa Rica

May 08, 2020

 Dear Mr. Gerardo Fuentes, mayor of Guácimo:

Our country has found itself facing one of the greatest challenges on recent times. At this time, we are in an economic slowdown. Besides, we have to face the onslaught of a pandemy.

I want to extend my sincere apologies for those who are facing difficult situations as a consequence of the national emergency.

I know the pressure on our governments is extreme, and the impact on people around the world continues growing. Despite the fact that the outlook seemed unfavorable, this is not the time to give up and lose everything we have achieved so far.

Some recommendations to deal with what is currently happening are:

·         Strategies that allow the participation of various community agents in disaster response.

·         Transparency on forecasting models and data that influence government strategies.

·         Publish proactive information for affected communities, including economic and social support.

In view of positive advances that we have had in relation to public health and the fight against this viral disease, it is time to join forces and move forward together as a society to combat the difficulties that still lie with us. To achieve economic recovery, it is necessary we think about those measures that allow us to generate growth in short term, reforms that increase our growth potential and measures that allow us to recover the confidence of the population.

Let me tell you that I am ready to provide the logistical support that the community needs.

Sincerely,

 Ruth Smith

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Blog #2

Retail Banking 

First of all, let´s define what is retail banking. As Kimberly Amadeo said: “ Retail banking provides financial services for individuals and families.” That is the main characteristic of retail banking. 

The banking industry is constantly changing, thanks to globalization and advances in technology. 

What are Retail Banking top trends? 

In an article published by The Financial Brand, they expect that the three most important trends for the retail banking industry in 2020 are going to be:

1. Removing friction from the customer journey

2. Use of big data. AI, AA and cognitive computing

3. Use of Aping and Open Banking

What do consumers want?

Consumers everywhere have come to rely on their ability to conduct business anytime and anywhere. For years, banks have been challenged to improve their digital experiences resulting in higher customer acquisition of banking applications.

Today, young people may take for granted to bank anywhere on their phones.

What is Retail Banking doing?

Technological advancements are continuing to influence the future of banking around the world.

According to Business Insider Intelligence, 39% of retail banking executives say that reducing costs is where technology has the greatest impact, compared to only 24% who say  it's improving customer experience.

Mobile banking has become the go-to method for users to make deposits, account transfers, and monitor their spendings and earnings.

it's crucial for the banking industry to be informed and stay ahead.

https://thefinancialbrand.com/93137/2020-retail-digital-banking-trends-priorities-experience-data-branches-payments-ai-cloud-innovation/

https://www.thebalance.com/what-is-retail-banking-3305885

https://www.businessinsider.com/future-of-banking-technology

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Why Is Economics Important?

Today we can find many majors and sometimes it's difficult for us to choose one. You can take into account your preferences, the opinion of other people or if you see yourself doing something for the rest of your life.

In my personal case, I chose Economy because I have some kind of experience in Finances. I found this field really interesting, so I wanted to know more about it.

Economics is the study of how the societies use the resources that are scarce to satisface the necesities of the people which are unlimited.

There are two main branches of this broad discipline: macroeconomics and microeconomics.

Common economic factors include interest rates, inflation, taxes, recessions, unemployment and supply and demand. These variables of the economy need to be considered in many types of decision-making

The methods used in the discipline, enables students to develop critical thinking based on arguments that allow them to ask what is the best option for each situation.

It is interesting to find that with a lot of numbers and ecuations you can explain what it's going on in a part of the life of a person, a company, an industry or a country and help in the process of find solutions to their problems.

Economic analysis provide to individuals tools to use their resources in the most efficient way, and contributes in the making of policies including health care, fight poverty or reduce inequality.

For me that is the best part of economy: help others.

https://youtu.be/nWPrMmv1Tis