cost reduction competition and industry performance in many markets firms compete over time by expending resources with the purpose of reducing their costs sometimes the cost reducing investments operate directly on costs in many instances they take the form of developing new products that deliver what customers need more cheaply therefore product development can have the same ultimate effect as direct cost reduction in fact if one thinks of the product as the services it delivers to the customer in the way that lancaster pioneered then product development often is just cost reduction

on the international spillovers of us quantitative easing this article analyses the effects of the federal reserve s quantitative easing qe on global portfolio flows differentiating across recipient region of the flows type of flow and qe rounds furthermore the analysis differentiates between the impact of qe expansionary announcements and the actual market operations the analysis shows that qe1 resulted in slight rebalancing towards the us while qe2 and qe3 resulted in rebalancing towards non us assets this suggests that qe increased the pro cyclicality of flows outside the us in particular into emerging market equities the results also suggest a link between us macro financial conditions and the transmission of qe to portfolio flows

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

agriculture led growth foodgrains versus export crops in madagascar abstract this article compares the growth generating power of alternative agricultural development strategies in madagascar projections from a semi input output model and a recently developed social accounting matrix suggest that both paddy and export crops stimulate strong linkages with other sectors of the malagasy economy but since paddy output can be increased at lower cost investment in rehabilitating small irrigated rice perimeters generates 40 to 100 more gdp than a comparable investment in coffee production paddy also generates greater employment and a more equitable income distribution

the determinants of growth the growth theories of the 1950s and 1960s emphasized capital accumulation and technical progress as explanations of growth more recently theoretical attention has focused on the understanding of progress in terms of learning human capital in the tradition of k arrow and investment in research following h uzawa these newer developments have made some but only limited progress the experience of developing countries suggests that the agenda should be broadened to include the efficiency of factor use infrastructure broadly interpreted and sectoral allocation these aspects together with the kaldorian concern for dynamic increasing returns provide substantial promise for future research copyright 1991 by royal economic society

daily monetary policy shocks and new home sales abstract the conventional notion of a monetary policy shock as a surprise change in the fed funds rate is misspecified the primary news for market participants is not what the fed just did but is instead new information about the fed s future intentions revisions in these anticipations show up instantaneously in long term mortgage rates home sales do not respond until much later this paper attributes this delay and hence much of the hump shaped response of economic activity to monetary policy to cross sectional heterogeneity in search times this framework allows one in principle to measure policy impacts at the daily frequency

dynamics of the cobweb model with adaptive expectations and nonlinear supply and demand the price quantity dynamics of the cobweb model with adaptive expectations and nonlinear supply and demand curves is analysed we prove that chaotic dynamical behaviour can occur even if both the supply and demand curves are monotonic the introduction of adaptive expectations into the cobweb model leads to price quantity fluctuations with a smaller amplitude however at the same time the price quantity cycles may become unstable and chaotic oscillations may arise we present a geometric explanation why chaos can occur for a large class of nonlinear monotonic supply and demand curves

the economics of development a survey i the subject our definition of the subject will be the use of economic analysis to understand the economies of poor or developing countries this includes in particular how standards of living in the population are determined and how they change over time and further how policy can or should be used in the influence of these processes the definition contains in principle much or most of analytical methods in economics insofar as they can be put to use in the examination of the issues of interest this is as it should be but it poses a problem for a survey in a journal a comprehensive treatment is infeasible so we shall follow a different route the survey will focus on what i take to be the major themes and approaches which characterise the productive aspects of the subject there is therefore no pretence at being exhaustive the purpose is rather to highlight some of the advances many of these have been of real substance there are a number of possible purposes for a survey and it is important to be clear at the outset for whom it is intended what it is and what it is not this survey is addressed to economists and students of economics who know the tools of their trade but not necessarily how they have been applied to and fashioned for the analysis of the economics of developing countries it is a description of the ways in which problems can be productively formulated and approached in terms of examples chosen for their intrinsic importance and interest the vastness of the subject means that we have to be highly selective it does not seek to provide a summary evaluation of the current view of the appropriate response to immediate policy questions it is not a history of thought nor a research manifesto nor an attempt to adjudicate or settle the major debates where they arise naturally from the major purpose some judgements on these subjects will be offered but they do not themselves constitute the primary intent of this survey there are three lines of enquiry or sets of questions which have i suggest been distinctive of the most fruitful work in development economics they will

modeling agricultural growth multipliers agriculture s potential as an engine of third world growth depends in large part on the size of the production and consumption linkages it stimulates in rural regions current estimates of agricultural growth multipliers within rural regions vary widely not only because economic structures differ across regions but also because the array of fixed price models most commonly used embody widely differing basic assumptions among fixed price models the semi input output formulation projects the most plausible multipliers but even they overstate the magnitude of growth multipliers by 10 to 25 according to the price endogenous model developed here

interpreting the macroeconomic time series facts the effects of monetary policy existing theory and evidence on the effects of monetary policy are reviewed substantial room for disagreement among economists remains new evidence based on multivariate time series studies of several countries is presented while certain patterns in the data consistent with effective monetary policy are strikingly similar across countries others particularly the tendency of interest rate increases to predict high inflation are harder to reconcile with effective monetary policy

beyond capital fundamentalism harrod domar and the history of development economics the origins of capital fundamentalism the notion that physical capital accumulation is the primary determinant of economic growth have been often ascribed to harrod s and domar s proposition that the rate of growth is the product of the saving rate and of the output capital ratio it is argued here that development planners in the 1950s reinterpreted and adapted the growth formula to their agenda in order to calculate capital requirements development economists at the time lewis hirschman rostow and others were aware that harrod s and domar s growth models addressed economic instability based on keynesian multiplier analysis which differed from their concern with long run growth in developing economies harrod eventually applied his concept of the natural growth rate to economic development he claimed that the growth of developing economies was determined by their ability to implement technical progress not by capital accumulation subject to diminishing returns domar pointed out that the incremental capital output ratio was more likely a passive result of the interaction between the propensity to save and technological progress instead of a causal factor in the determination of growth

complex economic dynamics obvious in history generic in theory elusive in data summary the capacity of nonlinear dynamic models to mimic qualitative features of economic data is illustrated with an adaptive version of the neoclassical growth theory implications for econometric methodology are discussed emphasizing structural estimation and qualitative inference

external shocks u s monetary policy and macroeconomic fluctuations in emerging markets estimated structural vars show that external shocks are an important source of macroeconomic fluctuations in emerging markets furthermore u s monetary policy shocks affect interest rates and the exchange rate in a typical emerging market quickly and strongly the price level and real output in a typical emerging market respond to u s monetary policy shocks by more than the price level and real output in the u s itself these findings are consistent with the idea that when the u s sneezes emerging markets catch a cold at the same time u s monetary policy shocks are not important for emerging markets relative to other kinds of external shocks

decentralized industrialization and rural development evidence from taiwan after 3 decades of growth widespread poverty persists in underdeveloped countries one of the major characteristics of the poor is that a disproportionate number of them are located in rural areas since a large number of the rural poor have limited or no access to productive agricultural land raising agricultural productivity alone may be insufficient to reduce rural poverty consequently attention has now turned to rural nonfarm activities as a possible source of rural employment and income this paper uses evidence from taiwan to show that the level of rural nonfarm ac

a cautious price adjustment mechanism chaotic behavior abstract it is well known that adjustment processes like tatonnement can show erratic dynamic behavior the prices can make big jumps and vary over a wide range a discrete tatonnement process in a simple two goods economy is studied with only one price adjusted it is shown that the interval in which the price varies can be restricted to a neighborhood of an equilibrium price with big jumps excluded if the relative price adjustment is restricted by a maximal rate of increase or decrease of the price within the interval any type of erratic dynamics remains possible

short memory and the ppp hypothesis abstract the purchasing power parity ppp puzzle has been framed in recent years in terms of half lives of real exchange rate shocks that exceed 3 years recent studies have attempted to solve that puzzle by adopting nonlinear stochastic models of real exchange rates the notion of half life is fundamentally linear and therefore is inappropriate for those nonlinear models we provide operational algorithms for estimating more general measures of persistence that are appropriate for nonlinear as well as linear models memory in mean and memory in distribution we study three parametric models autoregression threshold autoregression and exponential smooth threshold autoregression our monte carlo simulations suggest that all three models can produce biased estimates of persistence measures depending on the true data generating process in addition the sample size is found to be too small for reliable nonparametric estimation suggesting that we need to impose parametric structure in the empirical application all three parametric models provided general support for the long term ppp hypothesis suggesting that there is no puzzle and questioning the need for recently introduced nonlinear models

the impact of domestic and global trade liberalisation on five southern african countries we compare the impact of alternative domestic and global trade liberalisation scenarios on five economies in southern africa the study applies a computable general equilibrium model that employs standardised 12 sector social accounting matrices for malawi mozambique tanzania zambia and zimbabwe the approach incorporates stylised features such as own household consumption and marketing margins that are of particular importance when a majority of agricultural producers are not sufficiently integrated into formal markets and thus rely on own production to meet their daily diets hence improved infrastructure implies lower marketing costs and better market integration which translates to increased production opportunities the comparison of the results across all five countries reveals that common policy measures have different impacts depending on the underlying economic structures

modernizing peasant agriculture lessons from el palmar colombia abstract this paper examines the short run and anticipated long run output and income results of the modernization of production in a colombian peasant community el palmar the study finds that in the short run there were increases in output and in producer income as well as increases in local employment and trade opportunities which benefited land poor households however the incidence of extreme poverty in the community was still high after 10 years of modernization the gains from modernization had been limited by the failure of the projects to achieve stable low risk increases in the productivity of peasant resources and many producers had pulled back from adoption of full technological packages in favor of selective and limited adoption the lessons from the community of el palmar are applied to an assessment of the peasant modernization program of the colombian government where it is shown that the problems encountered in el palmar are reflective of problems with the colombian modernization strategy in general the conclusion drawn is that the income gains that can be achieved from the modernization of peasant production in the context of peasant land scarcity and the poor market conditions for traditional peasant products are limited

chaos significance mechanism and economic applications imagine a bargaining model say involving diplomats negotiating tariff levels or a disarmament treaty in which each party has been instructed by higher headquarters to respond to each new offer by her opposite number with a counteroffer that is to be calculated from a simple reaction function provided in advance both negotiating parties are prohibited from revealing their own reaction functions to the other if the perfectly deterministic sequence of offers and counteroffers that must emerge from these simple rules were to begin to oscillate wildly and apparently at random the negotiations could easily break down as each party not understanding the source of the problem came to suspect the other side of duplicity and sabotage yet all that may be involved as we will see is the phenomenon referred to as chaos a case that is emphatically not pathological but in which a dynamic mechanism that is very simple and deterministic yields a time path so complicated that it will pass most standard tests of randomness chaos has become a subject of great interest to specialists and nonspecialists alike besides economics it has entered the literature of geometry physics ecology and meteorology it has been written about at length in the new york times magazine and scientific american as well as technical publications this article seeks to describe what it is how it works and what it means for economics

the rural non farm economy prospects for growth and poverty reduction summary policy makers have high expectations for the rural non farm economy rnfe given high income shares growing employment and frequently low capital requirements they see the rnfe as a potential pathway out of poverty for their rural poor yet available evidence suggests that pro poor rural non farm growth does not occur automatically for the poor to benefit from rural non farm growth policy makers must stimulate buoyant rural economies with robust non farm income growth not simply low productivity employment moreover the poor must gain access to growing market niches fluid labor markets provide one important bridge linking the rural poor to growing non farm opportunities

genetic engineering and trade panacea or dilemma for developing countries abstract advocates of the use of genetic engineering techniques in agriculture contend that this new biotechnology promises increased productivity better use of natural resources and more nutritious foods opponents are concerned about potentially adverse implications for the environment and food safety in response to consumer reactions against genetically modified gm foods in some countries crop production is being segregated into gm and non gm varieties this analysis finds that world markets for maize and soybeans adjust well to these changes and also that developing countries will divert their trade patterns in response to preference changes in important trading partner countries

critical survey savings and economic growth in neoclassical theory in neoclassical economics economic growth depends upon savings the paper discusses problems with this conventional view and how these have been tackled from pre solowian authors up to the recent new or endogenous growth theory egt these difficulties became particularly clear with the solow swan model of growth in which the savings rate did not affect the rate of growth in the absence of exogenous circumstances savings would only depress the marginal productivity of capital forcing the economy towards a stationary state the paper interprets egt as an attempt to react to this gloomy theoretical prospect the paper examines various difficulties with this attempt

have increases in federal reserve transparency improved private sector interest rate forecasts yes this paper shows that since the late 1980s u s financial markets and private sector forecasters have become 1 better able to forecast the federal funds rate at horizons out to several months 2 less surprised by federal reserve announcements 3 more certain of their interest rate forecasts ex ante as measured by interest rate options and 4 less diverse in the cross sectional variety of their interest rate forecasts we also present evidence that strongly suggests increases in federal reserve transparency played a role for example private sector forecasts of gdp and inflation have not experienced similar improvements over the same period indicating that the improvement in interest rate forecasts has been special

a note on controlling a chaotic tatonnement abstract the paper studies the possibility of targeting or controlling a chaotic tatonnement by suitable perturbations of the law of motion the analysis is in the context of a parametric class of exchange economies which are shown to constitute the logistic family of dynamical systems under the tatonnement process computer simulations suggest that the control method is effective in attaining neighborhoods of competitive equilibria for many members of this class of economies in a decentralized manner

misperception driven chaos theory and policy implications abstract in a large economy it is extremely difficult if not impossible to immediately grasp the state of our surrounding environment with precision since we normally have access only to a subset of relevant information in this paper we introduce this information imperfection into an ordinary model of endogenous business cycles and examine how it would affect the dynamic nature of the model we in particular present a mechanism by which observation errors result in chaotic fluctuations in a model that would behave regularly otherwise thereby indicating the importance of potential misperception about the current state in a qualitative sense also our model is tractable enough to explicitly derive a policy index of chaotic fluctuations under some conditions this feature of the model allows us to draw some policy implications regarding the observability of macroeconomic state variables

mapping technological trajectories of the green revolution and the gene revolution from modernization to globalization abstract the dynamics of technology development along the technological trajectories of the green revolution and the gene revolution could be explicated by the social morphologies of modernization and globalization the green revolution was shaped by the exigencies of modernization while the gene revolution is being shaped by the imperatives of neo liberal economic globalization innovation development and diffusion of technologies followed different trajectories in these two realms because of being part of different innovation systems considerations of private gain and profit in the form of high returns to shareholders of agro biotech corporations of global reach largely determine the dynamics of technological innovation in the gene revolution technology transfer and local adaptive work in the green revolution was carried out in the international public domain with the objective of developing research capacity in post colonial third world agriculture to increase food production to avert hunger led political insurrection during the cold war differentiating these two trajectories is important not only due to the normative implications inherent in comparing the impacts of these two revolutions but also due to the important lessons we learn about how different contexts of innovation in the same technology cluster could evolve into contrasting research policy regimes

agriculture and economic growth in ethiopia growth multipliers from a four sector simulation model abstract agriculture accounts for over half of ethiopian gdp yet the case for agriculture as a focus of economic growth strategies must rely on identifying a set of intersectoral linkages through which agricultural growth contributes to the growth of non agriculture in the ethiopian economy this article develops a four sector numerical simulation model of economic growth in ethiopia which permits the calculation of macroeconomic growth multipliers resulting from income shocks to agriculture services modern industry and traditional industry the resulting growth multipliers are 1 54 for agriculture 1 80 for services 1 34 for modern industry and 1 22 for traditional industry these results depict an economy in which intersectoral linkages operate on a highly uneven basis these limits are reflected in the wide disparity between sectoral growth multipliers and by substantial differences in the patterns of their decomposition the policy relevance of these findings relate in part to the distributional implications of growth in particular sectors poverty in ethiopia is disproportionately rural an income shock to agriculture is clearly the most progressive choice indicating the need to highlight agricultural development in growth strategies for ethiopia yet the simulation results further indicate that doing so imposes relatively little trade off against total benefit while a 1 service sector income shock generates 0 80 in indirect benefits a 1 agricultural income shock still generates 0 54 in indirect gains a somewhat smaller benefit but one likely to make the greatest possible impact on poverty reduction

the effects of monetary policy news and surprises there is substantial agreement in the monetary policy literature over the effects of exogenous monetary policy shocks the shocks that are investigated however almost exclusively represent unanticipated changes in policy which surprise the private sector and which are typically found to have a delayed and sluggish effect on output in this paper we estimate a new keynesian model that incorporates news about future policies to try to disentangle the anticipated and unanticipated components of policy shocks the paper shows that the conventional estimates confound two distinct effects on output an effect due to unanticipated or surprise shocks which is smaller and more short lived than the response usually obtained in the literature and a large delayed and persistent effect due to anticipated policy shocks or news news shocks play a larger role in influencing the business cycle than unanticipated policy shocks although the overall fraction of economic fluctuations that can be attributed to monetary policy remains limited

is off farm income reforming the farm evidence from mexico does access to off farm income complement or compete with agricultural production this article explores the effect of off farm income on agricultural production activities using data from the 2003 mexico national rural household survey we first discuss the theoretical conditions under which access to off farm income may influence production in an agricultural household model instrumental variable iv estimation methods are then used to test whether agricultural production activities technologies and input use differ between households with and without access to off farm income we find that off farm income has a negative effect on agricultural output and the use of family labor on the farm but a positive impact on the demand for purchased inputs there is also a slight efficiency gain in households with access to off farm income findings offer insights into how household production evolves as rural households increasingly engage in off farm income activities

quantifying tax effects under policy foresight abstract studies of tax effects make the conventional information assumption that changes in period t taxes become known at t legislative lags however imply that news arrives before tax changes take place under policy foreknowledge the conventional information structure is therefore misspecified simulations of a standard neoclassical growth model suggest that foresight of only one quarter can distort substantially the estimates of tax effects obtained under the no foresight assumption also it is crucial to model capital and labor taxes separately anticipated changes in these two tax policies have opposite effects on consumption investment labor and output before policy realization

the impact of formal finance on the rural economy of india india has systematically pursued a supply led approach to increasing agricultural credit its objectives have been to replace moneylenders to relieve farmers of indebtedness and to achieve higher levels of agricultural credit investment and output india s success in replacing moneylenders has been outstanding between 1951 and 1971 their share of rural credit appears to have dropped from more than 80 percent to 36 percent it may have dropped to as low as 16 percent by 1981 but that estimate is disputed still institutional credit is far from reaching all farmers only about a quarter of cultivators borrow and no more than 2 percent take out long term loans most small farmers have little access to credit and long term credit goes mostly to large farmers overall farm debt has probably not increased sharply in real terms as formal credit has primarily substituted for credit from other sources moreover with the rapid growth of commercial banks in the 1970s the system mobilized more deposits than it lent in rural areas in 1981 of course enhanced deposit services are a useful service of the rural population but one must ask what has been the impact of heavy rural credit and better financial services on agricultural investment production and rural incomes the authors econometric results suggest that the rapid expansion of commercial banks in rural areas has had a substantially positive effect on rural nonfarm employment and output the availability of better banking facilities appears to have overcome one of the obstacles to locating nonfarm activities in rural areas expanded rural finance has had less of an effect on output and employment in agriculture than in the nonfarm sector the effect on crop output has not been great despite the fact that credit to agricluture has greatly increased the use of fertilizer and private investment in machines and livestock there has been more impact on inputs than on output so the additional capital investment has been more important in substituting for agriclutural labor than in increasing crop output but overall rural credit and expansion of the rural financial system have had a positive effect on rural wages creating nonfarm jobs has apparently added more to total employment than the substitution of capital for labor has subtracted it in agriculture so wages have risen even for agricultural workers albeit modestly the supply led approach to agricultural credit that has been pursued for three decades has clearly benefited current borrowers and farm households formerly indebted to moneylenders it has also spurred fertilizer use and investment in agriculture it has been less successful in generating viable institutions and has failed to generate agricultural employment the policy s costs to india s government have been high as portfolio losses associated with poor repayment ultimately have to be borne by the government or one of its institutions under optimistic assumptions the benefits of the agricultural income are at best no more than 13 percent higher than the cost to the government of the extra agricultural credit if assumptions about the cost of supplying the credit and about repayment rates are less optimistic the social costs and the costs to the government of providing the credit would have exceeded the benefits in agricultural income the expansion of commercial banks to rural areas paid off in nonfarm growth employment and rural wages the question is could these benefits have been achieved without imposing agricultural credit targets on the commercial banks and credit cooperatives or did the commercial banks expand only because they were forced to lend to agriculture the authors could not answer these questions with the data at hand

monetary policy news in the us effects on emerging market capital flows abstract we examine the impact of us monetary policy news on portfolio flows to emerging markets using a bayesian vectorautoregression that accounts for expectations of future monetary policy we define the us monetary policy news shock as one that increases monetary policy expectations while leaving the policy rate unchanged results suggest that the impact of this shock on portfolio flows as a share of gdp is economically small on aggregate but varies considerably across countries the countries we identify as being the most affected also experienced larger volumes of capital in and outflows before and after the 2013 taper tantrum episode respectively also macroeconomic performance and external vulnerabilities may matter however financial openness does not seem to be associated with differences in effects on capital flows over our sample period

fiscal foresight and information flows news or foresight about future economic fundamentals can create rational expectations equilibria with non fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react using tax policies as a leading example of foresight simple theory makes transparent the economic behavior and information structures that generate non fundamental equilibria econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes biases are quantitatively important when two canonical theoretical models are taken as data generating processes both the nature of equilibria and the inferences about the effects of anticipated tax changes hinge critically on hypothesized information flows different methods for extracting or hypothesizing the information flows are discussed and shown to be alternative techniques for resolving a non uniqueness problem endemic to moving average representations

exchange rate speculation and chaos inducing intervention abstract we show that in a market characterized by high volatility transactions designed to have a stabilizing effect may inadvertently induce chaos in the foreign exchange market for example excessive interventions by a central bank may lead to an increase in erratic behavior rather than to the calming of exchange rate movements

a robust rational route to randomness in a simple asset pricing model abstract we investigate asset pricing dynamics in an adaptive evolutionary asset pricing model with fundamentalists trend followers and a market maker agents can choose between a fundamentalist strategy at positive information cost or choose a trend following strategy for free price adjustment is proportional to the excess demand in the asset market agents asynchronously update their strategy according to realized net profits in the recent past as agents become more sensitive to differences in strategy performance the fundamental steady state becomes unstable and multiple steady states may arise as the traders sensitivity to differences in fitness increases a bifurcation route to chaos sets in due to homoclinic bifurcations of stable and unstable manifolds of the fundamental steady state

funding self sustaining development the role of aid fdi and government in economic success this article challenges a long held development policy assumption that aid and foreign direct investment fdi serve as substitutes or complements in accelerating the development of the world s poorer countries we show both theoretically and empirically that aid and fdi affect development differently aid contributes powerfully to both economic growth and human development and the higher the level of human capital in a country the more aid contributes by contrast fdi at best has no effect on economic growth and actually slows the rate of human development in less developed countries we find no evidence that the degree of democratic responsiveness in government conditions the effectiveness of either aid or fdi although we do find that democracy independently increases human development in all but the most developed countries our results demonstrate that fdi and aid are not and cannot be substitutes in the development of the world s poorer countries nor even can they be thought of as complements certainly not at mid to low levels of development in the end poor countries need democracy and aid not fdi we are extremely grateful to susan rose ackerman gustav ranis frances rosenbluth kenneth scheve and participants at the leitner political economy seminar at yale university in december 2003 for very helpful comments we also received valuable suggestions from two anonymous reviewers stephen kosack would like to thank the national science foundation for the support of a graduate research fellowship

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

consumer perceived risk model for the introduction of genetically modified food in spain abstract since the last part of the 20th century the search for new forms of cultivation and food has basically centred on the application of biotechnology giving rise to gm foods consumer acceptance is conditioned by the risk that they perceive from introducing food into their consumption habits processed through technology that they hardly understand besides information is insufficient in the consumer ambit and moreover it is influenced by ideological and ethical determining factors the factors were analysed that influence this consumer perceived risk through a structural equation model this study was conducted in spain concretely in the province of alicante located in the southeast of this country the main conclusion from this research is that the introduction of gm food into agro food markets should be accompanied by adequate policies to guarantee consumer safety these actions would allow a decrease in consumer perceived risk by taking special care of the information provided concretely relating to health for the most influential factor in consumer perceived risk from these foods is concern about health

roundup ready soybeans in argentina farm level and aggregate welfare effects although adoption rates of genetically modified crops have been staggering in some countries there is still comparatively little evidence about biotechnology impacts under diverse agroecological and institutional conditions these knowledge gaps lead to an overly precautious attitude among policy makers and the public this article analyzes the effects of roundup ready rr soybeans in argentina the country with the second biggest transgenic area worldwide based on recent survey data it is shown that the technology increases total factor productivity by 10 on average with cost savings being somewhat more pronounced for smaller than for larger farms the reduction in use of toxic herbicides and of tillage operations entails positive environmental repercussions aggregate welfare effects are computed over the 1996 2001 period with a three region partial equilibrium model comprising argentina the united states and the rest of the world in 2001 rr soybeans created more than us 1 2 billion of economic surplus at the global level the largest share went to consumers 53 followed by seed and biotechnology firms 34 and agricultural producers 13 due to comparatively weak intellectual property protection and thus only small technology mark ups in seed prices and widespread adoption argentine soybean growers receive 90 of the benefits in that country this demonstrates that farmers in developing countries can gain considerably when they obtain access to suitable foreign innovations through technology spill overs

argentina growth resumption sustainability and environment abstract this paper analyzes the sustainability of the current growth process in argentina taking into account macroeconomic consistency and environmental constraints the economy appears to be generating an unsustainable current account deficit and a relative price distortion in favor of nontradables impeding a needed increase in exports resolution of the main environmental problems would absorb around 10 of savings over the next 10 years the saving scarcity suggests that a gradualist policy giving priority to the urban environment should be implemented

technology choice and income distribution within the context of the agricultural sector one can point to numerous attempts to assess the macro economic effects of alternative technologies on the distribution of income one of the most influential early efforts for example was undertaken mainly in the indian context by john mellor 1 who was seeking to redefine agriculture s role in development strategy and policy in rejecting the then existing capital intensive and industry led development model and advocating instead a rural led employment intensive path to development mellor was concerned among other things with the relationships between increased foodgrain production using alternative technologies and the growth rate of non agricultural employment non agricultural sector capital labour ratios and the course of per capita incomes of the labour force more recently haggblade and hazell2 have used an input output based model to examine how differences in the choice of agricultural technology and farm size influence the indirect or multiplier effects of increases in agricultural output they show for example that the input intensity consumption profile of targeted farms and processing characteristics of the farm output all affect the size and composition of nonfarm spinoffs 3 the finding that consumption linkages generally dominate the total multiplier confirms mellor s emphasis on the importance of this particular type of linkage effect

modernization of a peasant crop in colombia evidence and implications abstract the survival of the small farm sector in the process of agricultural modernization in latin america has been a concern for many authors and institutions it is generally believed that the small farm sector is bypassed in the process of agricultural development the authors analyze modernization of bean maize cropping systems in southern colombia prices production practices and profitability are compared for 1975 and 1989 by means of a production function the effects of allocative efficiency technical efficiency and technical change on productivity and profitability are analyzed the observed changes reflect very well the price trends over the period between 1975 and 1989 total factor productivity increased by 50 bean maize producers almost doubled returns to land and labor increased technical efficiency had most effect on profitability followed by technical change allocative efficiency had more impact on yields than on profitability because it was associated with high input costs considerable opportunities for further productivity increases were identified conclusions on the nature of the modernization process are drawn implications for agricultural policy research and the role of the small farm in agricultural development are derived

infrastructure restricted factor substitution and economic growth abstract we show how infrastructural capital and labor requirements lead to restricted factor substitution and to fluctuating growth trajectories that are inefficient but which allow for jumps to more advanced regimes the theory is used to mimic evident phase transitions in the swedish economy

high frequency identification of monetary non neutrality the information effect we present estimates of monetary non neutrality based on evidence from high frequency responses of real interest rates expected inflation and expected output growth our identifying assumption is that unexpected changes in interest rates in a 30 minute window surrounding scheduled federal reserve announcements arise from news about monetary policy in response to an interest rate hike nominal and real interest rates increase roughly one for one several years out into the term structure while the response of expected inflation is small at the same time forecasts about output growth also increase the opposite of what standard models imply about a monetary tightening to explain these facts we build a model in which fed announcements affect beliefs not only about monetary policy but also about other economic fundamentals our model implies that these information effects play an important role in the overall causal effect of monetary policy shocks on output

chaotic price dynamics increasing returns and the phillips curve abstract chaotic behavior of prices can emerge as a robust result from a very simple and standard price adjustment process consider the dynamics of prices adjusting according to supply and demand in economies with increasing returns to scale increasing returns in production implies the existence of a globally attracting set of prices containing a stable disequilibrium price within which the motion of the system is chaotic this property holds for any step size in the price adjustment process when consumption and leisure are complementary we prove that long run statistical properties of the system s behavior in this set are described by an ergodic measure price dynamics drive the system into the globally attracting region and then chaotic motion takes over on average according to this measure there is excess supply we suggest possible empirical implications of our analysis particularly with respect to the relationship between wages changes and the demand for labor the phillips curve

the mainspring of economic growth lecture to the memory of alfred nobel april 27 1973 this abstract was borrowed from another version of this item

statistical dynamics and walras law abstract much interest has been shown on identifying the chaotic behavior generated from t tonnement process recently the aim of this article is to direct the research in exploring its statistical dynamical properties two typical types of ergodic t tonnement processes restricted t tonnement and unrestricted t tonnement have been studied their long run statistical characteristics such as time average of price excess demand and inflation rate are discussed in theory and by computer simulations

national policies and the sectoral pattern of economic growth this article presents tests of whether the kinds of national policy variables used to explain cross country variation in the growth of aggregate gdp per capita can also successfully explain per capita growth in the agricultural and nonagricultural sectors of developing countries there are four main results of interest first relative to nonagriculture convergence is much slower in agriculture and the burden of population growth is generally much higher second while orthodox economic policies share positive associations with economic growth in the nonagricultural sectors of developing countries such policies fail to robustly predict variation in agricultural growth third size of government indicators often yield an unexpected positive association with agricultural growth and finally although there is some evidence that fewer price controls are associated with faster agricultural growth these associations are statistically quite weak and quantitatively quite small

beyond export led growth abstract in light of the adverse conditions in the current international economic environment this paper reassesses the feasibility of continuing to rely on manufacturing export led growth as the major development dynamic for most ldcs during the next decade this paper argues that after the initial stages of industrial development the emphasis in policy toward agriculture should shift from surplus extraction to surplus creation and to the generation of demand linkages with the rest of the economy the author compares the relative merits of two alternative open development strategies export led industrialization and agricultural demand led industrialization adli by means of several simulation experiments the experiments are performed with a computable general equilibrium model of a small low income semi industrial open economy which is a stylization of south korea of 1963 they are carried out in an international environment assumed to represent the next decade based on a rate of growth of international demand for imports of about half the 1960 1973 rate the results support the adli approach on all counts

monetary policy surprises and interest rates evidence from the fed funds futures market abstract this paper estimates the impact of monetary policy actions on bill note and bond yields using data from the futures market for federal funds to separate changes in the target funds rate into anticipated and unanticipated components interest rates response to anticipated target rate changes is small while their response to unanticipated changes is large and highly significant these responses are generally consistent with the expectations hypothesis of the term structure surprise target rate changes have little effect on expectations of future actions however which helps to explain the lack of empirical support for the expectations hypothesis at the short end of the yield curve

stability and complex dynamics in a discrete tâtonnement model abstract in this paper we study the dynamics of discrete price adjustment processes we show that gross substitutability leads to a kind of stability of the process it guarantees that all prices converge to some bounded region that contains the unique equilibrium price the dynamics inside this region is by no means trivial we demonstrate that as the speed of adjustment increases the process undergoes several bifurcations and the dynamics may become quite complex our approach differs from other literature on t tonnement processes in that our systems are not necessarily one dimensional

impact of bt cotton in china abstract a sample of 283 cotton farmers in northern china was surveyed in december 1999 farmers that used cotton engineered to produce the bacillus thuringiensis bt toxin substantially reduced the use of pesticide without reducing the output ha or quality of cotton this resulted in substantial economic benefits for small farmers consumers did not benefit directly farmers obtained the major share of benefits and because of weak intellectual property rights very little went back to government research institutes or foreign firms that developed these varieties farmers using bt cotton reported fewer pesticide poisonings than those using conventional cotton

a discrete and symmetric price adjustment process on the simplex abstract we study the t tonnement process in an exchange economy with three commodities and three agents we argue that for the multiplicative t tonnement process the simplex is a natural normalization rule we analyse the influence of symmetry in preferences and endowments on the dynamics of the t tonnement process depending on this symmetry there are different bifurcation routes to chaos in particular coexisting attractors may emerge when the symmetric equilibrium price vector becomes unstable this coexistence of attractors is robust in the sense that it also exists for close by asymmetric t tonnement processes

is gm soybean cultivation in argentina sustainable this paper explores the long term sustainability of argentina s specialization in genetically modified soybean cultivation it is conceived as an evidence based assessment of the most relevant economic social and environmental implications of the soybeanization of argentinian agriculture we combine 2 sources of primary and secondary quantitative data the national agricultural census and farm level data from a field survey carried out in 2 provinces of the argentinian pampas our results suggest a major conflict between the success of the soybeanization of argentinian agriculture measured in terms of production and profit records and the social economic and environmental sustainability of this new model of production gm soybean package adoption has increased farm productivity and has reduced the costs per unit produced the resulting dramatic increase in profits constituted a strong incentive to extend the scale of production the development of companies comprising actors from both agricultural and non agricultural sectors constituted a good way to extend the scale of production but this technological innovation in agriculture has been the source of numerous criticisms it is widely held among argentinian researchers in particular that soybean expansion has increased land inequality and displaced labor however overall we find a mixed empirical picture of changing land distribution patterns and labor displacement resulting from the soybean expansion the environmental implications of agricultural biotechnology are alarming and the long term sustainability of gm crops can seriously be questioned in a context where gm soybean production has become one of the strategic components of argentina s economy as well as in the country s international positioning our results suggest that it is highly unlikely that the government will implement policies against this precious crop and its by products however promoting sustainable agricultural growth has become not only desirable but necessary

on the complicated price dynamics of a simple one dimensional discontinuous financial market model with heterogeneous interacting traders abstract we develop a financial market model with heterogeneous interacting agents market makers adjust prices with respect to excess demand chartists believe in the persistence of bull and bear markets and fundamentalists bet on mean reversion moreover speculators trade asymmetrically in over and undervalued markets and while some of them determine the size of their orders via linear trading rules others always trade the same amount of assets the dynamics of our model is driven by a one dimensional discontinuous map despite the simplicity of our model analytical graphical and numerical analysis reveals a surprisingly rich set of interesting dynamical behaviors

signalling effects of monetary policy we develop a dynamic general equilibrium model in which the policy rate signals the central bank s view about macroeconomic developments to price setters the model is estimated with likelihood methods on a u s data set that includes the survey of professional forecasters as a measure of price setters inflation expectations this model improves upon existing perfect information models in explaining why in the data inflation expectations respond with delays to monetary impulses and remain disanchored for years in the 1970s u s monetary policy is found to signal persistent inflationary shocks explaining why inflation and inflation expectations were so persistently heightened the signalling effects of monetary policy also explain why inflation expectations adjusted more sluggishly than inflation after the robust monetary tightening of the 1980s

stabilization and its discontents argentina s economic restructuring in the 1990s abstract this paper assesses the argentine stabilization and market reform strategies since 1989 we argue that argentina may be penned in by its own success exchange rate targeting quelled inflation but the resulting real appreciation has limited export and employment growth microeconomic reforms raised efficiency but have threatened income distribution and hence political stability exclusive styles of policy making helped enact reform but have led to corruption and policy insensitivity and contributed to rising social discontent we close by suggesting how a second generation of reforms could tackle these issues and spread the proceeds of reform to a wider segment of the argentine public

promoting intersectoral growth linkages in rural africa through agricultural technology and policy reform this paper addresses how increased rural incomes in select african cases are spent on consumption items the implications of these patterns for stimulating rural growth and areas of intervention necessary to sustain demand led growth from improved agricultural technology and economic reforms the country studies utilize panel data collected by the international food policy research institute ifpri in collaboration with african institutions and re

statistical dynamics and economics abstract it is shown in this paper how complex economic dynamics can be characterized using the statistical or distributional theory of dynamical systems the basic concepts of the latter are summarized then applications to supply and demand adjustments in competitive markets aggregate business fluctuations and economic growth in the very long run are briefly reviewed

durable capital and chaos in competitive business cycles abstract this study constructs an example of chaotic optimal accumulation that results from the existence of the limitation of capital depreciation an example is an extension of the model developed by weitzman

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

on the asynchronous approvals of gm crops potential market impacts of a trade disruption of eu soy imports due to their high protein content soybeans are important feedstuffs in the european union eu however the cultivation of soybeans using genetically modified gm varieties in non eu countries is increasing and the eu authorization of gm products takes longer than in other countries leading to an asynchronous approval between the eu and non eu countries that might induce soybean trade disruptions this paper uses an integrated modelling system to simulate argentina brazil and the united states ending soybean exports to the eu the impact on world trade and on the eu import prices of soy products is analysed with a computable general equilibrium model eu soy imports are shown to decline and the import price of soybeans in the eu increases the effects on eu agricultural markets are analysed based on a partial equilibrium model feed costs in the eu are found to increase with poultry and pork the most affected production and exports decline and imports increase however the effects of a trade ban are found to be less profound than in many other studies due to compensating substitution effects at various market levels increasing imports from third countries increasing domestic oilseed production and the use of other protein feeds

give a man a fishpond modeling the impacts of aquaculture in the rural economy abstract the rapid growth of fish farming over the past three decades has generated heated debate over the role of aquaculture in rural development and poverty reduction central to these debates is the question of whether and how aquaculture impacts local incomes and employment yet little empirical evidence exists on the issue to address this question we propose a local economy wide impact evaluation lewie model which nests fish farm models within a general equilibrium model of their local economy the model is calibrated using primary data collected from 1102 households in myanmar s main aquaculture zone representative of 60 of the country s aquaculture farms using this model we examine the impact of aquaculture on the incomes and labor market outcomes of fish farming households but also crop farms and non farm households in the cluster simulating one acre increases in pond plot surface we find that 1 aquaculture generates much higher incomes per acre than agriculture 2 aquaculture generates larger income spillovers than agriculture for non farm households by way of retail and labor markets 3 small commercial fish farms generate greater spillovers than large fish farms these results bolster the notion that fish farming and in particular small scale commercial aquaculture may have a significant role to play in rural development and poverty reduction

ergodic fluctuations in deterministic economic models abstract nonperiodic business fluctuations are shown to exist with positive measure generically and to behave like stationary stochastic processes in the standard dynamic macro model the implication is that so called chaotic fluctuations are probable for random initial conditions in a large class of recursive economies

editorial the revival of the liberal creed the imf and the world bank in a globalized economy abstract this editorial reviews problems arising from the popular washington consensus economic package as economies become more globalized and the reasons why they occur suggestions for improving the performance of the institutions behind the policies the world bank and international monetary fund are provided

on endogenizing long run growth this assessment of recent theoretical work on endogenous growth identifies three different engines of long run growth i the asymptotic average product of capital is positive ii labor productivity increases as an external effect of capital accumulation iii there are feedback effects on the cost of accumulating knowledge or innovating a general model encompassing all three is considered and then used to review different proposed determinants of long run growth rates the contribution of endogenous growth theory has been to create a framework in which to explain why economic institutions and policies can have long run effects on growth rates

do measures of monetary policy in a var make sense no in many vector autoregressions vars monetary policy shocks are identified with the least squares residuals from a regression of the federal funds rate on an assortment of variables such regressions appear to be structurally fragile and are at odds with other evidence on the nature of the u s federal reserve s reaction function furthermore the residuals from these regressions show little correlation across various vars or with funds rate shocks that are derived from forward looking financial markets my results provide a sharp critique of current monetary vars

agricultural technology and farm nonfarm growth linkages abstract agricultural growth stimulates rural nonfarm activity by boosting demand for production inputs and consumer goods but different kinds of agricultural technology promote different patterns of nonfarm linkages to explore how key features of agricultural technology affect growth in the rural nonfarm economy this paper reviews an array of cross section and time series evidence bearing on the dynamics of the rural nonfarm economy then using consumption and production parameters associated with different agricultural technologies it introduces a simple model which isolates the effects of different technologies on nonfarm growth linkages

bubble thy neighbor portfolio effects and externalities from capital controls we use changes in brazil s tax on capital inflows from 2006 to 2013 to test for direct portfolio effects and externalities from capital controls on investor portfolios we find that an increase in brazil s tax on foreign investment in bonds causes fund managers to significantly decrease their portfolio allocations to brazil in both bonds and equities fund managers simultaneously increase allocations to other countries that have substantial exposure to china and decrease allocations to countries viewed as more likely to adjust their capital controls much of the effect of capital controls on portfolio allocation appears to occur through signalling i e changes in investor expectations about future policies rather than the direct cost of the controls this evidence of significant externalities from capital controls suggests that any assessment of controls should consider their effects on portfolio flows to other countries

multiple equilibria and chaos in a discrete tâtonnement process the purpose of this note is to demonstrate a sufficient condition for a discrete t tonnement process to lead to chaos in a general equilibrium model with multiple commodities the result indicates that as the speed of price adjustment increases the discrete t tonnement process is complex in a general equilibrium economy in which there are multiple equilibria

household strategies and rural livelihood diversification this article reviews the recent literature on diversification as a livelihood strategy of rural households in developing countries with particular reference to sub saharan africa livelihood diversification is defined as the process by which rural families construct a diverse portfolio of activities and social support capabilities in order to survive and to improve their standards of living the determinants and effects of diversification in the areas of poverty income distribution farm output and gender are examined some policy inferences are summarised the conclusion is reached that removal of constraints to and expansion of opportunities for diversification are desirable policy objectives because they give individuals and households more capabilities to improve livelihood security and to raise living standards

farmland rental prices in gm soybean areas of argentina do contractual arrangements matter abstractin this paper we study the determinants of the rental price of farmland in the argentinian pampas in particular we examine the price of lease contracts using a hedonic price model while controlling for other potential sources of variation using firsthand data for 255 plots our results indicate that both short term contracts and contracts with sowing pools push rental prices upwards we also find that soybean yields have a significant impact on land rental prices these results suggest that if argentina intends to protect the enormous natural advantage it has for agricultural production it should consider strictly regulating land rental contracts

foreign effects of higher u s interest rates abstract this paper analyzes the spillovers of higher u s interest rates on economic activity in a large panel of 50 advanced and emerging economies we allow the response of gdp in each country to vary according to its exchange rate regime trade openness and a vulnerability index that includes current account foreign reserves inflation and external debt we document large heterogeneity in the response of advanced and emerging economies to u s interest rate surprises in response to a u s monetary tightening gdp in foreign economies drops about as much as it does in the united states with a larger decline in emerging economies than in advanced economies in advanced economies trade openness with the united states and the exchange rate regime account for a large portion of the contraction in activity in emerging economies the responses do not depend on the exchange rate regime or trade openness but are larger when vulnerability is high

u s monetary policy and fluctuations of international bank lending abstract there is no consensus in the empirical literature on the direction in which u s monetary policy affects cross border bank lending we find robust evidence that the impact of the u s federal funds rate on cross border bank lending in a given period depends on the prevailing international capital flows regime and on the level of the two main components of the federal funds rate macroeconomic fundamentals and the monetary policy stance during episodes in which bank lending from advanced to emerging economies is booming the relationship between the federal funds rate and cross border bank lending is positive and mostly driven by the macroeconomic fundamentals component which is consistent with a search for yield behavior by internationally active banks in contrast during episodes of stagnant growth in bank lending from advanced to emerging economies the relationship between the federal funds rate and bank lending is negative mainly due to the monetary policy stance component of the federal funds rate the latter set of results is most pronounced for lending to emerging markets which is consistent with the international bank lending channel and flight to quality behavior by internationally active banks

exports and growth a causality analysis for the pulp and paper industries based on international panel data this study examines the causal relations between exports and domestic production in the pulp and paper industries the issue is whether exports are the engine of growth or whether exports follow growth the data were time series of the 15 main exporting countries between 1961 and 1995 the method was granger causality analysis with error correction based on models estimated in three ways ordinary least squares by country least squares with dummy variables lsdv and seemingly unrelated regression regardless of method the strongest relation was an instantaneous within a year feedback between exports and production the lsdv results implied average multipliers across countries of 1 2 to 1 4 from exports to production and 0 20 to 0 25 from production to exports in both industries experiments with monthly data on the pulp industries of canada and the usa showed that temporal aggregation could affect the granger causality test results

multiple equilibria and chaotic tâtonnement applications of the yamaguti matano theorem abstract this paper demonstrates sufficient conditions for the discrete time t tonnement process to lead to chaos in the competitive economy with only two commodities to prove that we use yamaguti matano theorem