Gotowa bibliografia na temat „Transaction cost economics”

The transaction cost economics has accumulated a mass of dogmatic concepts and assertions that have acquired high stability under the influence of path dependence. These include the dogma about transaction costs as frictions, the dogma about the unproductiveness of transactions as a generator of losses, “Stigler—Coase” theorem and the logic of transaction cost minimization, and also the dogma about the priority of institutions providing low-cost transactions. The listed dogmas underlie the prevailing tradition of transactional analysis the frictional paradigm — which, in turn, is the foundation of neo-institutional theory. Therefore, the community of new institutionalists implicitly blocks attempts of a serious revision of this dogmatics. The purpose of the article is to substantiate a post-institutional (alternative to the dominant neo-institutional discourse) value-oriented perspective for the development of transactional studies based on rethinking and combining forgotten theoretical alternatives. Those are Commons’s theory of transactions, Wallis—North’s theory of transaction sector, theory of transaction benefits (T. Sandler, N. Komesar, T. Eggertsson) and Zajac—Olsen’s theory of transaction value. The article provides arguments and examples in favor of broader explanatory possibilities of value-oriented transactional analysis.

This paper compares the economic efficiency of firm-agency governance structures for pollution reduction using transaction costs economics. Two governance structures are analyzed with the transaction costs approach: command and control regulation (CCR) and negotiated agreements (NAs). We propose that the choice of governance structure depends on the strategies firms pursue given the attributes of their transactions and their market opportunities. The application of transaction cost economics analysis leads to different choices of regulatory instruments. Firms in more mature, stable industries are likely to choose command and control, while firms in new, dynamic sectors are more likely to opt for negotiated agreements. Frequency of transactions is a key factor in firm choice.

This paper considers farmland conversion for the purpose of urban development as a series of transactions and discusses the determinants of appropriate governance structures for governing farmland conversion in terms of process efficiency. Towards this end, the paper develops a theoretical framework for analysing the process of farmland conversion based on transaction cost economics. The framework covers transactions, transaction attributes, governance structures and performance with the aim of minimising transaction costs. The paper also demonstrates the usability of the framework by creating a corresponding quantitative model for a case study in China. Furthermore, it identifies factors that influence the transaction costs associated with farmland conversion in China and explains why the related governance structures are chosen.

Purpose The basic concept of transaction cost theory is that firms like to conduct transactions in a channel with lower transaction costs. Therefore, the purpose of this paper is to use the transaction cost perspective to identify which conditions cause companies to choose between outbound open innovation (hierarchy governance) and inbound open innovation (market governance). Design/methodology/approach Accordingly, transaction cost economics was used to relate the choice and implementation of open innovation using a sample of 250 electronics and information start-ups in China. Structural equation modeling was used to conduct confirmatory factor analysis to evaluate measurement model, while logistic regression analysis was used to test the hypotheses. Findings As expected, the dedicated asset specificity, human asset specificity, behavioral uncertainty, transaction frequency, and small number exchange were positively associated with outbound open innovation. Originality/value The contribution of this paper lies in explaining the role played by transaction cost economics in the process of open innovation for start-ups through empirical analysis.

The present study examines the management of transaction risks in supply chains. Risk management studies often ignore the wider supply chain context in which individual transactions take place. However, risk management strategies which are suitable to use when only a single transaction is considered may be inappropriate when other transactions in the supply chain are taken into account. This study addresses this issue by examining: (1) how risks arise as a result of interdependencies between the various transactions making up the supply chain; and (2) what types of contractual-based strategies actors can use to manage their risk exposure. To realize these aims, the study applies an extended Transaction Cost Economics (TCE) framework with a supply chain orientation. The framework illustrates how different types of interdependencies - pooled, sequential and reciprocal - expose companies to different sources of risk. Three strategies companies can use when facing barriers to risk minimization in sequentially interdependent supply chains are analyzed: risk transferring, risk altering and risk sharing. Examples from the agri-food sector are discussed to demonstrate the functioning of these strategies.

Thesis (Ph. D.) -- University of Maryland, College Park, 2007.
Thesis research directed by: Economics. Title from t.p. of PDF. Includes bibliographical references. Published by UMI Dissertation Services, Ann Arbor, Mich. Also available in paper.

Major defence projects have a reputation of cost increases, time delays and in some cases not meeting user requirements. The aim of this study was to discover the factors which create the difficulties in UK defence acquisition projects. The dataset used in this research are seventeen, National Audit Office: Value for Money reports of major defence projects. Qualitative Software NVivo 8 was used to organise passages from the reports into categories of factors representing the defence acquisition process. A content analysis method was applied to the categories in order to highlight their quantitative and qualitative significance. A Transaction Cost Economics approach was taken to formulate the research propositions, which were tested using the qualitative content analysis.The fundamental transformation in defence procurement leads to post-contract asset specificity. There is a lack of substitute suppliers in defence procurement due to the high switching costs. There are three reasons given for this development in defence: (1) a legacy of the privatisation policy in the defence industry; (2) ownership transfers of specialised assets under the prime contracting approach and; (3) the transaction-specific investments by the MoD. The prime is able to take advantage of transaction-specific and relation-specific investments in the transaction for future contract tenders, due to the pre-contract asset specificity which results. This sequence of events is identified as the cause of the bilateral dependency condition in defence acquisition.Uncertainty and asset specificity, to a lesser extent, were identified as the major causes of transaction-costs in defence acquisition. These transaction-costs were given as the causes of failures in meeting the value for money criteria of defence projects. The MoD has responded, in recent time, to project failure through a governance trade-off from a traditional market-based transaction towards a bilateral governance approach. A focus of this bilateral governance approach is the application of Smart Acquisition principles and the IPT mechanism (joint MoD-Industry teams). In order to strengthen and support the IPT mechanism it is argued that a relational contracting approach should be taken. Traditional contracting approaches weaken the joint team working, whereas relational contracting applies partnership principles of better communication, cooperation and collaboration.

Exporting plays an imperative role in many firms growth and survival. For that reason, a profound understanding of export operations is of interest to researchers as well as practitioners. Choosing the export mode is one of the most important strategic decisions a firm makes when exporting to its foreign markets. This decision may affect the firm s resource allocations and shape the possibility of future foreign expansion, and thus has potential performance implications. This study acknowledges that export mode choices should contribute to the firm success initially and on a continuous basis. Hence, it recognises the interlinked nature of export mode operations, and, for the first time, adapts a holistic view on export operation modes. Introducing the portfolio logic, this study investigates antecedents of the export mode portfolio and its performance implications. Two different theoretical approaches of transaction cost economics (TCE) and real options (RO) were used to distinguish different possible export mode portfolios of a firm. The study model is empirically tested using data from 250 Chinese export firms. From the TCE perspective, the finding suggests that firms' levels of investment uncertainty and export marketing capability are the main drivers of an internalised export mode portfolio. From the RO theory viewpoint, on the other hand, the result indicates that firms' levels of endogenous uncertainties (i.e. cultural uncertainty and technological uncertainty) are positively related to the intensity of use of Joint-Investment export modes in the portfolio of firms. In ddition, as expected, the greater the preponderance of exogenous uncertainties (i.e. investment uncertainty and demand uncertainty) the higher the proportion of No-Investment export modes in the portfolio of the firm. Further analysis of firms' export performance reveals that firms shaping their export mode portfolios according to the predictions of real options out-perform firms that shape their export mode portfolio based on TCE considerations. More specifically, firms that reduce their endogenous uncertainty, by engaging more in Joint- Investment modes of export operation across their portfolio, benefit from higher profit performance. The new model developed in this study provides a tool that enables scholars to give better advice to exporters on how they can structure their export mode portfolio for enhanced export profit.

This thesis tests Oliver Williamson’s proposition that transaction cost economics can explain the limits of firm size. Williamson suggests that diseconomies of scale are manifested through four interrelated factors: atmospheric consequences due to specialisation, bureaucratic insularity, incentive limits of the employment relation and communication distortion due to bounded rationality. Furthermore, Williamson argues that diseconomies of scale are counteracted by economies of scale and can be moderated by adoption of the multidivisional organisation form and by high internal asset specificity. Combined, these influences tend to cancel out and thus there is not a strong, directly observable, relationship between a large firm’s size and performance. A review of the relevant literature, including transaction cost economics, sociological studies of bureaucracy, information-processing perspectives on the firm, agency theory, and studies of incentives and motivation within firms, as well as empirical studies of trends in firm size and industry concentration, corroborates Williamson’s theoretical framework and translates it into five hypotheses: (1) Bureaucratic failure, in the form of atmospheric consequences, bureaucratic insularity, incentive limits and communication distortion, increases with firm size; (2) Large firms exhibit economies of scale; (3) Diseconomies of scale from bureaucratic failure have a negative impact on firm performance; (4) Economies of scale increase the relative profitability of large firms over smaller firms; and (5) Diseconomies of scale are moderated by two transaction cost-related factors: organisation form and asset specificity. The hypotheses were tested by applying structural equation models to primary and secondary cross-sectional data from 784 large US manufacturing firms. The statistical analyses confirm the hypotheses. Thus, diseconomies of scale influence the growth and profitability of firms negatively, while economies of scale and the moderating factors have positive influences. This implies that executives and directors of large firms should pay attention to bureaucratic failure.

Fibre sourcing is a critical strategic question for all sawmills and pulpmills, but the degree of supply integration though long-term contracts and forest ownership varies widely. The purpose of this research was to investigate the extent to which forest-mill integration patterns can be explained by the transaction cost economics (TCE) theory. TCE theory holds that organizations will choose transaction governance forms that minimize transaction costs. The TCE factors expected to influence that choice can be grouped into three categories; transaction frequency, market uncertainty, and asset specificity. Interviews with various industry representatives suggested that factors from all three categories are relevant to the question of forest-mill integration. A survey was conducted of mills in New Zealand and Sweden, providing data on their supply mix and various TCE factors. Of an estimated population of approximately 450 mills, 136 mills were sampled and 88 responded to the survey. Fractional logit models were developed to explore the factors that may influence the integration decision. Considerable evidence was found for the importance of TCE factors in driving fibre supply integration. The evidence was strongest for factors related to asset specificity, including forest owner concentration and the specificity of a mill's fibre requirements. Transaction frequency appears less important; while integration was found to be significantly associated with the number of mills an organisation has within the supply basin, the influence of mill capacity was found to vary. There was weak evidence for the importance of uncertainty, and perhaps only through the impact of forest owner concentration on market conduct. Integration was found significantly higher for pulpmills than sawmills, and higher in Sweden than in New Zealand. The latter result is difficult to explain by TCE theory, and suggests that non-TCE factors play a significant role. Survey responses also indicated that non-TCE factors are important. Further research is required to enlarge the sample size and better understand the role of TCE factors in forest-mill integration.

The liberalisation of transport capacities and prices of land-based transport of goods in Europe in the 1990s led to an increasingly market-orientated decision process for the users of piggyback transport services. However, the empirical research has not yet examined the contracts co-ordinating German piggyback transport chains in this changed environment. This analysis seeks to explain the four types of contracts most commonly used in German piggyback transport by relating them to the theory of transaction cost economics (TCE). The qualitative case study approach adopted here derives from the tradition of Oliver Williamson’s research. The hypothesis of the thesis relates the different contract designs to the type of transport service: the higher the specificity of an asset to fulfil the transport service required by the freight forwarder, the higher the tendency to vertically integrate piggyback transport services. Put differently, the following question is answered: ‘do the contracts used by freight forwarders to acquire the transport service of rail operators result in the lowest transaction costs o f the existing contracts for the specific haulage requested?’ The thesis models these transaction attributes o f the rail transport services for piggyback according to TCE and subsequently assigns them to the contract design elements o f the four types o f contracts. The first two contracts are efficient in all transport services they co-ordinate and the third is efficient to a large extent in terms o f the volume o f services co-ordinated. The fourth contract type cannot currently be designed in a way efficient for TCE.

The global oil market dwarfs other commodity markets. Its size and role in the energy and industrial value chains underscore its significant economic and geopolitical impacts. Thus, the consequences of oil price fluctuations extend far beyond the oil industry and can be viewed as a barometer of trends in the global economy. Several oil price benchmarks currently compete in the global market. The most popular ones, such as Brent or West Texas Intermediate (WTI), are backed by a sufficient supply of the underlying crude. They also meet the criteria for efficient trading, hedging and speculating — including having sufficient liquidity, developed futures markets, low transaction costs and strong institutional support.

More than 60 countries in the world have already implemented instant payment systems (IPS). However, in many cases they have been operational mainly for person-to-person transactions. This study looks at the challenges IPS may face in developing economies like Colombia as they advance further into the person-to-business transactions space. Using a survey on Colombian merchants (IV-2020), the study explores the factors associated with merchants´ propensity to adopt instant payments and those associated with the adoption of current electronic payment alternatives. It shows that IPS will need to have a broad strategy to penetrate the person-to-business space, as they will have to compete with the low marginal costs and immediacy that cash already offers and the high levels of informality in the commerce sector, especially for micro businesses. Furthermore, IPS will have to meet the high expectations merchants have about instant payments enabling access to other financial services, enhancing their competitiveness, and increasing their bottom line.

As part of the study and analysis of domestic and foreign practice of foreign trade in goods and freight forwarding, a characteristic of a conditional forwarding company is given that is able to provide a cargo owner customer with a reduction in costs in the transport component in the price of the customer’s goods. The object of the study is: the market of trade, transport operations and freight forwarding services. The objectives of the research, based on the methods of analysis and synthesis, are: research and analysis of the current state of the issue of interaction between the customer and the forwarder in the freight forwarding market.

This project is a continuation of US 2081-91. Together they develop a conceptual and empirical framework to analyze alternative forms of water reform that lead to efficient pricing of water. Our analysis demonstrates that the transition from water rights systems to water trading may lead to improved resource allocation even when overall availability of water resources declines. We introduce two systems of water trading, passive markets and active markets, and show that passive markets lead to efficient resource allocation with lower transaction costs. We demonstrate that both methods of trading are superior to block pricing. We identify the political economic situations that would lead to each type of water resource allocation. Examples from Israel and California are used to demonstrate the conceptual results.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.