sequential labor decisions under uncertainty an estimable household model of west african farmers this paper reports estimates of the structural parameters of a stochastic control model that describcs the labor decisions of small farmers in burkina faso west africa the focus of the estimation is on measuring flexibility in production and intertemporal substitutability in consumption full information maximum likelihood estimates of the primitive parameters of the model are computed even though optimal labor decision rules cannot be derived analytically vuong s non nested model specification test shows that this method yields parameter estimates that are superior to those derived by assuming that farmers solve a deterministic control problem the low levels of agricultural labor effort commonly observed in the survey area are shown to be a consequence both of the low productivity of labor in archaic rainfed agriculture and of farmers awareness that in the absence of a labor market overly ambitious production plans lead to seasonal manpower constraints to meet rainfed farmers concerns agricultural research institutes and extension services should factor flexibility into their research agendas

garch inadequacy for modelling exchange rates empirical evidence from latin america this article checks for the adequacy of using garch models in exchange rate series using the hinich portmanteau bicorrelation test we find that a garch formulation or any of its variants fails to capture the data generating process of the main latin american exchange rates our results highlight the potential of having misleading public policy when estimates are based in garch types of models this article also complements recent similar findings encountered in european and asian economies

revisiting purchasing power parity for african countries with nonlinear panel unit root tests this study applies panel seemingly unrelated regressions sur kapetanios et al kapetanios shin snell kss surkss tests proposed by wu and lee 2009 to investigate the properties of long run purchasing power parity ppp in 15 african countries the empirical results from the univariate unit root and panel based unit root tests indicate that ppp does not hold for these 15 countries under study however panel surkss tests indicate that ppp is valid for four of these 15 countries these results have important policy implications for these 15 african countries under study

prospects for enhanced exchange rate cooperation in east asia some preliminary findings from generalized ppp theory the asian financial crisis increased economic disparities in the east asian ea region thus making monetary integration more difficult but rekindled political interest in asian monetary and exchange rate cooperation this article applies the theory of generalized purchasing power parity g ppp which looks at the behaviour of long run real exchange rates to assess the potential for an optimum currency area oca among a subset of ea countries based on five of the more advanced members of the association of southeast asian nations asean5 our findings suggest little support for an oca for asean5 as a bloc prior to the asian financial crisis and mixed results in the post crisis period in particular asymmetries in the way countries adjust to shocks and low or insignificant speeds of adjustment were found thus although the application of single oca criteria is notoriously demanding and our tests apply to only one of the many criteria for the successful formation of an oca we cannot find persuasive

stationarity of asian pacific real exchange rates abstract using a nonlinear unit root test we reject the null hypothesis of nonstationarity for most of the asian pacific real exchange rates but not for the japanese yen based rates there is more evidence for level stationarity in the singapore dollar based rates than in other currency based rates

nonlinear dynamics in deviations from the law of one price a broad based empirical study abstract in this paper we test empirically the validity of the law of one price using data for five major bilateral us dollar exchange rates and nine goods sectors during the recent floating exchange rate regime since the early 1970s using threshold autoregressive models we find strong evidence of nonlinear mean reversion in deviations from the law of one price with plausible convergence speeds consistent with theoretical arguments on international goods markets arbitrage under transactions costs and with an emerging strand of empirical literature these results contribute towards forming a consensus view in favor of discrete regime switching in deviations from the law of one price and the presence of differing nonzero transactions costs across a broad range of goods and countries

are asian real exchange rates stationary by applying the newly developed nonlinear stationary test advanced by kapetanios et al journal of econometrics 112 2003 359 in examining the stationary property of 11 asian real exchange rates this paper rejects unit root in 8 us dollar based and 6 japanese yen based rates whereas the augmented dickey fuller adf test has led to no rejection at all

nonlinear adjustment to purchasing power parity in the post bretton woods era abstract this paper models the dynamics of adjustment to long run purchasing power parity ppp over the post bretton woods period in a nonlinear framework consistent with the presence of frictions in international trade we estimate exponential smooth transition autoregressive estar models of deviations from ppp which are obtained using the johansen cointegration method for both consumer price index cpi and wholesale price index wpi based measures and a broad set of us trading partners in several cases we find clear evidence of a mean reverting dynamic process for sizable deviations from ppp with the equilibrium tendency varying nonlinearly with the magnitude of disequilibrium analysis of impulse response functions also supports a nonlinear dynamic structure but convergence to long run ppp in the post bretton woods era is very slow

positively sloping marginal revenue ces utility and subsistence requirements the possibility that marginal revenue may possess a positive slope has long been recognized as important in her classic the economics of imperfect competition joan robinson 14 accorded considerable significance to the possibility and investigated it at length despite robinson s insights upward sloping marginal revenue functions remained largely a curiosity widely regarded as an overly stringent perversity unlikely to occur in reality considerable doubt was cast on this view when in 1980 a a walters 20 reported the presence of positively sloping marginal revenue in the pricing policies of the port of singapore the case for upward sloping marginal revenue was furthered by formby layson and smith s 8 straightforward demonstration that upward sloping marginal revenue schedules are very easily produced and can never be ruled out because simple parallel shifts in strictly convex demand and or rotations always transform demand schedules with downward sloping marginal revenue into ones with positively sloping schedules this strongly suggests that no theoretically reasonable restrictions can be placed on the behavior of marginal revenue because to do so would rule out such simple transformations as parallel shifts or rotations in demand such restrictions would be too stringent to be acceptable upward sloping marginal revenue has found important application in such diverse topics as catastrophe theory 3 third degree price discrimination 13 dual equilibria and monopolistic competition 11 specific taxes and quality 2 and international trade 7 2 the significance of non monotonic marginal revenue functions is further underscored by the fact that the presence of upward sloping marginal revenue significantly affects the sign of comparative static results for example see 18 260 15 16 2 a shortcoming of previous analyses lies in the fact that they draw conclusions from consideration of slope level and curvature of the demand schedule alone the behavior of marginal revenue derived directly from the more fundamental basis of utility theory has not been examined this paper takes up this question employing wold s theorem to analyze marginal revenue

the black market exchange rate vs the official rate in testing ppp which rate fosters the adjustment process abstract in testing the purchasing power parity theory ppp researchers hardly pay attention to the speed with which the exchange rate adjusts to a change in relative prices in this paper we show that the speed of adjustment is faster when the black market exchange rate is used in testing the ppp as compared to the official exchange rate this could be another reason as to why central banks should unify the two rates

health and agricultural productivity evidence from zambia we evaluate the productivity effects of investment in preventive health technology through a randomized controlled trial in rural zambia in the experiment access to subsidized bed nets was randomly assigned at the community level 516 farmers were followed over a one year farming period we find large positive effects of preventative health investment on productivity among farmers provided with access to free nets harvest value increased by us 76 corresponding to about 14 7 of the average output value while only limited information was collected on farming inputs shifts in the extensive and the intensive margins of labor supply appear to be the most likely mechanism underlying the productivity improvements observed

does ppp hold in african countries further evidence based on a highly dynamic non linear logistic unit root test with a view to investigating whether the purchasing power parity ppp theory holds true for selected african countries during the january 1980 december 2003 period we employ a rigorous highly dynamic non linear logistic unit root test as first advanced by leybourne et al 1998 which is considerably more powerful than those tests traditionally used compared with the rejection of the null of the unit root process for only one of the 22 countries under study when we use the traditional adf pp kpss np and the df gls unit root tests with the leybourne et al 1998 test we strongly reject the null of the unit root process for a surprising six of the 22 countries these empirical results clearly indicate that ppp holds true for these six countries namely the central african republic the cote d ivoire kenya madagascar uganda and lesotho

long run purchasing power parity with asymmetric adjustment further evidence from african countries this study applies threshold cointegration test advanced by enders and siklos 2001 to investigate the properties of asymmetric adjustment in long run purchasing power parity ppp in 22 selected african countries during the period of january 1980 to december 2003 although there is evidence of long run ppp for most african countries the adjustment mechanism is asymmetric these results have particularly important policy implications for african countries

real exchange rate adjustment in european transition countries abstract in single equation tests real exchange rates show mean reversion for nine of 10 central and eastern european transition countries for the period january 1993 to december 2005 because of the shift from controlled to market economies and accompanying crises failed policy regimes and changes in exchange rate regimes unit root tests for transition countries often require allowance for structural changes accounting for structural breaks gives substantially faster mean reversion speeds than those found for major industrialized countries these fast adjustment speeds are plausible transition countries had perhaps 10 years to make unprecedented adjustments required for accession to the european union a number of papers have applied non linear models to the central and eastern european countries this paper investigates four non linear models and compares them with piece wise linear break models the break models appear superior in detecting mean reversion for the central and eastern european transition countries

disease and development the effect of life expectancy on economic growth we exploit the major international health improvements from the 1940s to estimate the effect of life expectancy on economic performance we construct predicted mortality using preintervention mortality rates from various diseases and dates of global interventions predicted mortality has a large impact on changes in life expectancy starting in 1940 but no effect before 1940 using predicted mortality as an instrument we find that a 1 percent increase in life expectancy leads to a 1 7 2 percent increase in population life expectancy has a much smaller effect on total gdp however consequently there is no evidence that the large increase in life expectancy raised income per capita

the inadequacy of linear autoregressive model for real exchange rates empirical evidence from asian economies utilizing the formal linearity test of luukkonen saikkonen and terasvirta biometrika 75 491 499 1998 as diagnostic tool the empirical finding suggests that the linear autoregressive ar model is inadequate in describing the real exchange rates behaviour of 11 asian economies it is noted that the conventional battery of diagnostic tests is capable of identifying the inadequacy of the linear model in only three of these series moreover the linearity nature of this behaviour has been formally rejected in favour of the non linear smooth transition autoregressive star model the finding of non linearity in the data generating process of these real exchange rates warrants that the use of linear framework in empirical modelling and statistical testing procedures in the field of exchange rates may lead to an inappropriate policy conclusions

cartels and antitrust the role of fines in deterring violations at the margin the potential benefits of effective antitrust action include both increased economic efficiency through the expansion of output and improved equity through the redistribution of income from monopolies to consumers a large and growing literature is devoted to empirically testing and documenting the economic consequences of antitrust casebringing activity a second empirical literature is focused on the role which economic variables play in the determination of casebringing activity by the united states department of justice 2 what separates these two bodies of literature are the behavioral linkages between anti

purchasing power parity in less developed and transition economies a review paper abstract the concept of purchasing power parity ppp has been the subject of numerous studies many of which have been unable to prove conclusively this core principle of international finance although industrialized countries have received most of the attention studies that focus on less developed and transition economies have also attained mixed results this study surveys trends in this branch of the literature highlighting the econometric advances that have sought to solve this puzzle while pointing out that more needs to be done to address the reasons that might cause ppp not to hold

purchasing power parity with flexible fourier stationary test for central and eastern european countries this study applies stationary test with a fourier function proposed by enders and lee 2004 2009 to test the validity of long run purchasing power parity ppp to assess the nonstationary properties of the real exchange rate rer for seven central and eastern european countries ceecs we find that our approximation has higher power to detect u shaped breaks and smooth breaks than linear method if the true data generating process of exchange rate is in fact a stationary nonlinear process we examine the validity of ppp from the nonlinear point of view and provide robust evidence clearly indicating that the ppp holds true for all ceecs our findings point out their exchange rate adjustment is mean reversion towards ppp equilibrium values in a nonlinear way

a note on efficiency of australian and new zealand stock markets in this article we re examine efficiency of the australia s and new zealand s stock markets extending recent work of narayan 2005 for this purpose we apply the nonlinear unit root test procedure recently developed by kapetanios et al 2003 the nonlinear unit root tests reject the null hypothesis of unit root suggesting that the both stock markets are not weak form efficient contrary to the findings of narayan 2005

is the evidence for ppp reliable a sustainability examination of the stationarity of real exchange rates abstract some recent time series studies testing the stationarity of real exchange rates rers produce conflicting results using nonlinear unit root tests and recursive analysis this paper tests whether the evidence on the stationarity of rers is sensitive to different numeraire currencies different sample periods covering regional and global crises and the inclusion of countries with different levels of economic or regional integration the results indicate that evidence for a stationary rer could be substantially sensitive to sample period changes but not so for the currencies of the countries involved in forming the euro area we also find that financial crises have a notable impact on testing the stationarity of rers depending on the numeraire currency used we discuss the policy implications of the findings

economic welfare price and profit the deterrent effect of alternative antitrust regimes this paper critically examines the deterrent effect of price fixing statutes under alternative antitrust regimes a regime is defined by the litigation strategy which the antitrust agency employs in detecting cartels and in determining whether prosecution is warranted and by the basis upon which courts estimate damages the results of the analysis suggest that antitrust policy may actually induce cartels to further restrict output increasing welfare loss above the level imposed by an unthreatened perfect monopoly litigation strategy and damages should be founded upon consideration of welfare loss measures to avoid this possibility

the law of demand positive sloping marginal revenue and multiple profit equilibria this paper demonstrates that the conditions for a positively sloping marginal revenue curve are much less stringent than is generally recognized simple transformations of any well behaved convex demand function can easily result in a demand for which marginal revenue is positively sloping for this reason positively sloping marginal revenue functions must be considered whenever convex demand functions are analyzed the existence of positively sloping marginal revenue makes multiple profit equilibria for the firm a very real possibility

modeling non linearities in real effective exchange rates abstract the aim of this paper is to test for and model non linearities in the real effective exchange rates of 10 major industrial countries the g 10 to exploit non linear dependencies in exchange rates we apply the star smooth transition autoregressive family of models these non linear models imply the existence of two distinct regimes in exchange rates with potentially different dynamic properties but the transition between the regimes is smooth tests reject linearity for eight exchange rates the real exchange rate process is cyclical in both regimes for almost all countries and there appears to be some evidence of asymmetry star models outperform hamilton s markov regime switching model in an out of sample forecasting contest

the deterrent effect of antitrust enforcement in this paper we formulate and test a model of collusive pricing in the presence of antitrust enforcement we show that a cartel s optimal price is likely to be neither the competitive price nor the price that the cartel would set in the absence of antitrust enforcement but rather an intermediate price that depends on the levels of antitrust enforcement efforts and penalties our empirical results reveal that increasing antitrust enforcement in the presence of a credible threat of large damage awards has the deterrent effect of reducing mark ups in the bread industry

spot electricity price discovery in indian electricity market this paper investigates the spot electricity price discovery that exists among the five regions of indian electricity market using hourly spot electricity price data from 1st january 2014 to 31st december 2015 using augmented dickey fuller 1981 and narayan and popp 2010 unit root tests we find that the spot electricity prices for both peak and off peak hours across all the regions are stationary at level then by applying granger causality test for a reduced var model at level the results show that there hardly any causality exists between these electricity markets barring few regions though we did not find any causality between peak price and off peak price for all individual region but we formed two panels by using peak and off peak price data of all five regions our results showed short run and long run panel granger causality between peak price and off peak price the results of the study suggests that though india as a nation has all the regions inter connected with single frequency of power grid operation since 2008 however these markets are not highly integrated in comparison to electricity markets of developed nations around the world

are asian real exchange rates mean reverting evidence from univariate and panel lm unit root tests with one and two structural breaks there are a number of studies that examine the purchasing power parity ppp hypothesis the empirical findings from the extant literature for the ppp hypothesis are mixed this article applies univariate and panel lagrange multiplier lm unit root tests with one and two structural breaks to real exchange rates for 15 asian countries the univariate lm unit root tests find evidence of ppp for two thirds of the sample the results from the panel lm unit root test support long run ppp for the asian countries in the sample the results from the lm panel unit root tests differ from those of existing panel unit root tests of ppp for asian countries that have not allowed for the existence of structural breaks

market reaction to the filing of antitrust suits an aggregate and cross sectional analysis the data were obtained from the february 1982 international financial statistics the ifs code is given in parentheses the exchange rate was end of period exchange rate ae real income was real gdp u k sweden 99 b p and real gnp germany canada u s 99 a r interest rates were a treasury bill rate u k canada u s 60c call money rate germany 60b and government bond yield sweden 61 money was 34 prices were the consumer price index 64 references

do real exchange rates follow a nonlinear mean reverting process in developing countries in an effort to fight relatively high inflation many developing countries try to manage their nominal exchange rates through official intervention in addition developing countries tend to have high transportation costs tariffs and nontariff barriers these factors are among the sources of generating nonlinearity in real exchange rates and hence some nonlinear adjustment toward purchasing power parity ppp in developing countries in this paper we employ monthly real effective exchange rate reer data of 88 developing countries and test the null of nonstationarity versus an alternative of linear stationarity by the means of a conventional unit root test and compare the results with those obtained from a new test in which the null is the same but the alternative hypothesis is nonlinear stationarity the latter test supports the ppp theory in more developing countries compared with the former test suggesting that nonlinear adjustment toward ppp in developing countries is an important phenomenon reported country characterizations indicate that reversion in reer occurs more often for high inflation countries and for countries with high flexibility in their exchange rates

long run purchasing power parity in the 1920s abstract this paper presents an empirical analysis of long run purchasing power parity ppp during the 1920s float using recently developed methodology on the cointegration of economic time series our results are generally supportive of ppp as a long run equilibrium condition on which exchange rates tended to converge over the period for dollar sterling however there is some evidence of a non stationary drift away from fundamentals during the last year or so before britain s return to the gold standard perhaps due to speculation our results also appear to reconcile some apparently conflicting evidence in the literature

do malaysian house prices follow a random walk evidence from univariate and panel lm unit root tests with one and two structural breaks in this article we apply univariate and panel lagrange multiplier lm unit root tests with one and twostructural breaks proposed by lee and strazicich 2003 2004 and im et al 2005 to examine housing prices for five different housing price indices all housing detached housing semi detached housing terrace housing and high rise housing in 14 states of malaysia to test whether housing prices exhibit a random walk our main finding from the univariate lm unit root tests is that for the vast majority of states housing prices follow a stationary process about a segmented trend the results of the panel lm unit root tests provide overwhelming evidence that house prices are segmented trend reverting

characterizing nonlinearities in business cycles using smooth transition autoregressive models during the past few years investigators have found evidence indicating that various time series representing business cycles such as production and unemployment may be nonlinear in this paper it is assumed that if the time series is nonlinear then it can be adequately described by a smooth transition autoregressive star model the paper describes the application of these models to quarterly logarithmic production indices for 13 countries and europe tests reject linearity for most of these series and estimated star models indicate that the nonlinearity is needed mainly to describe the responses of production to large negative shocks such as oil price shocks

towards solving the ppp puzzle evidence from 113 countries several different approaches have been followed by researchers to test the validity of purchasing power parity ppp since the introduction of the unit root tests researchers have applied a battery of these tests to determine whether the real exchange rates are stationary if the answer is in the affirmative ppp is validated while application of the standard augmented dickey fuller test has not provided much support for ppp a test that incorporates nonlinearity in the rates has under both tests however the null of nonstationary is tested against the alternative of stationarity in this article when we switch the null with the alternative and apply kwiatkowski et al 1992 test we provide relatively more support for the theory getting closer and closer towards solving the ppp puzzle

strategic and deterrent pricing responses to antitrust investigations abstract this paper examines the issue of the effects of antitrust on pricing through two empirical studies the first analyzes time series of prices in five industries involved in antitrust cases to determine whether the various stages of the antitrust process influenced pricing behavior some evidence of a deterrent effect is found with real prices lower than their pre investigation level following the conclusion of the case a major part of the pricing reaction occurs prior to the filing of formal charges the second study provides additional evidence of the existence of such a strategic reaction to the onset of investigation through an examination of prices in 23 industries investigated but not charged with price fixing

do exchange rates follow a random walk process in middle eastern countries abstract in this note we employ the kpss test in addition to the adf test to determine whether the real effective exchange rates in middle eastern countries follow a random walk process or they are stationary while in most cases the kpss test supported the stationary of the real effective rates thus the ppp the adf test did not the failure to support the ppp by the adf test is said to be due to its low power

household composition labor markets and labor demand testing for separation in agricultural household models this paper tests the separation of farm labor supply and labor demand decisions using the observation that household composition is an important determinant of farm labor use with nonseparation after assessing the conditions under which the test has power against several alternatives an empirical model is developed to test the proposition that farm employment is independent of family composition the model is estimated on a data set from rural java the null hypothesis that farm labor allocation decisions are independent of household structure is not rejected the results are robust to different specifications of the labor demand function copyright 1992 by the econometric society

loyalty exit and enforcement evidence from a kenya dairy cooperative organizations depend on members loyalty for their success studying a cooperative s attempt to increase deliveries by members we show that the threat of sanctions leads to highly heterogeneous response among members despite the cooperative not actually enforcing the threatened sanctions positive effects for some members persist for several months other members exit stopping delivering altogether among non compliant members we document substantial heterogeneity in beliefs about the legitimacy of the sanctions this lack of common understanding highlights the role played by managers in organizations and provides a candidate explanation for lack of sanctions enforcement documented by ostrom 1990 and other studies

financial consequences of antitrust enforcement haworth earnings productivity and changes in employment discrimination during the sixties american economic review 65 mar 1975 158 168 lazear edward the narrowing of black white wage differentials is illusory american economic review 69 sept 1979 553 564 family background and optimal schooling decisions this review 62 feb 1980 42 51 long james employment discrimination in the federal sector journal of human resources 11 1 1976 86 97 welch finis black white differences in returns to school american economic review 63 dec 1973 893 907

free distribution or cost sharing evidence from a randomized malaria prevention experiment author s cohen jessica dupas pascaline abstract it is often argued that cost sharing charging a subsidized positive price for a health product is necessary to avoid wasting resources on those who will not use or do not need the product we explore this argument through a field experiment in kenya in which we randomized the price at which prenatal clinics could sell long lasting anti malarial insecticide treated nets itns to pregnant women we find no evidence that costsharing reduces wastage on those that will not use the product women who received free itns are not less likely to use them than those who paid subsidized positive prices we also find no evidence that costsharing induces selection of women who need the net more those who pay higher prices appear no sicker than the average prenatal client in the area in terms of measured anemia an important indicator of malaria cost sharing does however considerably dampen demand we find that uptake drops by 75 percent when the price of itns increases from zero to 0 75 i e from 100 to 87 5 percent subsidy the price at which itns are currently sold to pregnant women in kenya we combine our estimates in a cost effectiveness analysis of itn prices on child mortality that incorporates both private and social returns to itn usage overall our results suggest that free distribution of itns could save many more lives than cost sharing programs have achieved so far and given the large positive externality associated with widespread usage of itns it would likely do so at a lesser cost per life saved

short run subsidies and long run adoption of new health products evidence from a field experiment short run subsidies for health products are common in poor countries how do they affect long run adoption a common fear among development practitioners is that one off subsidies may negatively affect long run adoption through reference dependence people might anchor around the subsidized price and be unwilling to pay more for the product later but for experience goods one off subsidies could also boost long run adoption through learning this paper uses data from a two stage randomized pricing experiment in kenya to estimate the relative importance of these effects for a new improved antimalarial bed net reduced form estimates show that a one time subsidy has a positive impact on willingness to pay a year later inherit to separately identify the learning and anchoring effects we estimate a parsimonious experience good model estimation results show a large positive learning effect but no anchoring we black then discuss the types of products and the contexts inherit for which these results may apply

real exchange rate behavior in the middle east a re examination abstract this letter extends recent work by bahmani oskooee bahmani oskooee m do exchange rates follow a random walk process in middle eastern countries economics letters 1998 58 339 344 on testing long run purchasing power parity for middle eastern countries during the post bretton woods period using multivariate nonlinear models strong support is provided for highly nonlinear reversion of real exchange rates toward a stable equilibrium for each country examined

testing ppp in the non linear star framework abstract we apply the standard adf test and a new test that incorporates non linearity in time series to the real effective exchange rates of 23 industrial countries the new test provides support for ppp in more countries than the adf test

credit market consequences of improved personal identification field experimental evidence from malawi we implemented a randomized field experiment in malawi examining borrower responses to being fingerprinted when applying for loans this intervention improved the lender s ability to implement dynamic repayment incentives allowing it to withhold future loans from past defaulters while rewarding good borrowers with better loan terms as predicted by a simple model fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk but had no effect for the rest of the borrowers we provide unique evidence that this improvement in repayment rates is accompanied by behaviors consistent with less adverse selection and lower moral hazard jel d14 d82 g21 o12 o16

quantile unit root test and ppp evidence from 23 oecd countries abstractapplication of six different univariate unit root tests to real effective exchange rates of 23 oecd countries supports their stationarity or purchasing power parity theory ppp only in five countries a result consistent with previous research that is known as ppp puzzle however descriptive statistics of each effective rate reveals a clear sign of non normal distribution to account for this we use quantile unit root test which allows impact of different shocks to be realized at different quantiles when we applied this new test to the same rates number of countries in which ppp is supported increased to 16 apparently incorporating effects of shocks improves testing efficiency and provides more support for the ppp and reduces the severity of the puzzle

regime non stationarity in the us uk real exchange rate abstract using a markov switching extension of the adf regression we find evidence that the us uk real exchange rate is stationary in periods when it is in a low volatility regime and nonstationary when it is in a high volatility regime

transactions costs and nonlinear adjustment in real exchange rates an empirical investigation eolquilibrium models of real exchange rate determination in the presence of transactions costs imply a nonlinear adjustment process toward purchasing power parity ppp conventional cointegration tests which ignore the effect of transactions costs may be biased against the long run ppp hypothesis our results using both monthly data for the interwar period and annual data spanning two centuries clearly reject the linear framework in favor of an exponential smooth transition autoregressive process the systematic pattern in the estimates of the nonlinear models provides strong evidence of mean reverting behavior for ppp deviations and helps explain the mixed results of previous studies

accounting for the effect of health on economic growth i use microeconomic estimates of the effect of health on individual outcomes to construct macroeconomic estimates of the proximate effect of health on gdp per capita i employ a variety of methods to construct estimates of the return to health which i combine with cross country and historical data on height adult survival rates and age at menarche using my preferred estimate eliminating health differences among countries would reduce the variance of log gdp per worker by 9 9 percent and reduce the ratio of gdp per worker at the 90th percentile to gdp per worker at the loth percentile from 20 5 to 17 9 while this effect is economically significant it is also substantially smaller than estimates of the effect of health on economic growth that are derived from cross country regressions

purchasing power parity for east asia countries further evidence based on panel stationary test with multiple structural breaks in this article we re investigate the validity of purchasing power parity ppp for a sample of 10 east asia countries over the period of january 1987 to june 2005 using a recently developed econometric technique of the panel stationary test with multiple structural breaks proposed by carrion i silvestre et al 2005 this test considers multiple structural breaks positioned at different unknown dates and a different number of breaks for each individual empirical evidence shows that the ppp holds true for half of 10 east asia countries during the research period our results have important policy implications for these 10 east asia countries under study

smooth structural breaks and the stationarity of the yen real exchange rates this article examines and solves an interesting paradox in the literature that the tests for purchasing power parity ppp based on the yen real exchange rates rers refute the ppp hypothesis more often than those with other major currency based rers and the evidence is sensitive to the sample period used using a new empirical methodology accounting for both nonlinearity and multiple smooth temporary breaks in the data we show that the puzzling finding is due to the failure to take into account the long but temporary large rise and fall in the yen rers the results illustrate that the yen rers in the post bretton woods period are likely mean reverting with linear or nonlinear adjustment toward large long swing type of infrequent smooth temporary changes around constant equilibrium values supporting the validity of ppp and resolving the paradox

if it pays it stays can agribusiness internalize the benefits of malaria control might a malaria control intervention entail agricultural effects that allow a commercial agribusiness to offset its costs the randomized allocation of 39 936 insecticide treated mosquito nets among 81 597 smallholder cotton farming households in 1 507 clusters helps evaluate this in the context of zambia s cotton outgrowing industry but despite large health impacts on treated households no impact on cotton deliveries to the agribusiness is detected with some caveats the results tend to strike a discord with recent evidence on the agricultural productivity effects of malaria control

mean reversion in bilateral real exchange rates evidence from the malaysian ringgit this study examines behaviour of the consumer price index cpi based real exchange rates rers of the ringgit against the currencies of malaysia s major trading partners the empirical results which are derived from newly developed tests advocated by lee and strazicich ls 2003 and narayan and popp np 2010 that allow for two breaks in the series provide conflicting results we obtain weaker support for purchasing power parity ppp using the narayan and popp 2010 test by truncating the sampling period into two sub periods we find that ppp holds for majority of the malaysia s bilateral exchange rate vis a vis its major trading partners during the pre crisis period the 1997 currency crisis however has weakened the evidence in favour of ppp hypothesis in the strict sense