Times change: development advice will never be the same again. Why would any country buy the bitter medicine to limit goverment debt or forgo purchases of goverment debt by the country's central bank? Industrialized countries, who have strongly pushed such strong medicine, now instruct their central banks to purchase goverment debt and generate unprecedented fiscal deficits. The justification: extraordinary economic times. I would bet that any finance minister of a country where the majority of citizens lives on a dollar would argue that s/he is facing extraordinary times...
The response to industrialized countries' policies has been swift. Credit rating agencies warn the UK goverment that it is in danger of loosing its pristene bond rating (because of excessive debt) and the US is being lectured about the dangers of printing money (by a developing country).
Interest parity can help us predict the future value of the British Pound (what is your prediction of the forward premium?). The Mundell Fleming Model (augmented to include price changes, see Chapter 19) or the Dornbush Overshooting Model (Chapter 20) come in handy to understand fluctuations in output, prices, and exchange rates as the US Central Bank engages in purchases of massive amounts of treasury bills to inject liqudity into the US economy.
Back to development advice: the events remind me of the cafeteria at the IMF's Washington D.C. headquarters in the 1980s, where meals were ridiculously subsidized, but every IMF program advised developing countries against subsidizing food.