the environmental effects of agricultural trade liberalization in latin america an interpretation abstract the trade and environment debate has focused attention on the possible contradiction between promoting free markets while meeting domestic environmental objectives this paper takes a view from the south recent econometric models predict net effects of expanded agricultural trade to be positive for the global environment yet further pressure on degraded resources and marginal farmers and a reinforcement of sectoral policies that benefit commercial export crop growers as opposed to food producers may make increased trade more of a bane than a blessing for developing countries in the context of emerging regional trading blocks in latin america nafta and mercosur removal of trade barriers between participating nations has led to dislocation of production whose localized impacts it is hoped would be resolved through reconversion of agriculture in affected subregions it may be however that internalization of socio environmental costs of such dislocation would indicate that production despite competitive disadvantages would best have been left where it was to gain a better empirical understanding of the links between agricultural trade policy and the environment will require prediction of ecosystem stresses anticipated from alterations in how producers grow crops in specific geophysical settings rather than reliance on stylized facts

institutions and the environmental kuznets curve for deforestation a crosscountry analysis for latin america africa and asia abstract the relationship between deforestation and income across 66 countries of latin america africa and asia is examined institutional characteristics as well as macroeconomic policies of each country are hypothesized to impact deforestation results show strong evidence of an environmental kuznets curve ekc relationship between income and deforestation for all three continents institutional structure and macroeconomic policy significantly affect the tropical deforestation process improvements in political institutions and governance significantly reduce deforestation the factors leading to deforestation differ across regions however and there is no one size fits all global policy recommendation for restraining the tropical deforestation process

expectations and commodity price dynamics the overshooting model comment commodity markets at the top of page 345 an arbitrage condition is asserted for commodity prices but we have an arbitrage condition that must hold in the commodity markets since commodities are storable the rate of return on treasury bills can be no greater than the expected rate of increase of commodity prices plus storage costs but this is not an arbitrage condition in the commodity markets that is when the condition is violated risk free arbitrage does not necessarily occur at first reading the condition in the quoted sentence appears to be

third world debt and tropical deforestation abstract the deforestation and degradation of tropical forests are taking place at an extremely rapid pace according to the food and agriculture organization fao the estimated annual rate of tropical deforestation during the 1981 1985 period was 113 846 square kilometers or 0 6 of the 1981 total forested area the implications of the loss of these forests are staggering myers n 1989 deforestation rates in tropical forests and their climatic implications friends of the earth london tropical forests are extremely rich ecosystems which support a disproportionately large share of the world s plant and animal species forests play a crucial role in both nutrient and hydrological cycling and may provide sustainable economic benefits through managed harvesting of timber and the collection of non timber products such as fruits nuts and rubber also deforestation is a significant source of global warming through its effects on the global carbon cycle this paper focuses on the relationship between debt and deforestation examining conceptual and empirical arguments that debt is a source of deforestation pressure our study develops a behavioral model which suggests that debt can lead to myopic behavior leading to deforestation rates that may not be optimal in the long run but are necessary in the short run to meet current constraints then country by country data on debt deforestation and other variables are analyzed with regression analysis it is shown that debt is significantly correlated with deforestation under a wide variety of assumptions and specifications our results indicate that debt is an important factor in the deforestation of tropical countries there are certainly other sources of deforestation both micro and macroeconomic which may vary significantly from country to country however we focus on debt because of its dominant role in the economies of developing countries and because of the increased use of debt for nature swaps the link between debt and deforestation that is suggested in this paper implies that debt for nature swaps may have a dual effect on deforestation first the contractual agreement is designed to preserve forests as part of the swap second the reduction in debt may itself reduce the pressure to deforest although this indirect effect is small our research provides evidence that reducing debt reduces deforestation which may be an argument to offer deforesting third world countries some form of debt relief and to utilize more fully debt for nature swaps as a tool for preserving environmental quality

monetary impacts on prices in the short and long run some evidence from new zealand this paper presents support for long run monetary neutrality based on evidence that individual time series for money manufacturing prices and agricultural prices are nonstationary but cointegrated with a stationary proportional long run relationship among their levels dynamic simulations from a vector error correction model with this restriction imposed show that monetary shocks shift relative prices in favor of agriculture in the short run and permanently raise nominal prices manufacturing price shocks have similar long run effects but initially place agriculture in a cost price squeeze while agricultural price shocks are transitory and have little impact on the other series

environmental quality public debt and economic development this article analyzes the consequences on capital accumulation and environmental quality of environmental policies financed by public debt a public sector of pollution abatement is financed by a tax or by public debt we show that if the initial capital stock is high enough the economy monotonically converges to a long run steady state on the contrary when the initial capital stock is low the economy is relegated to an environmental poverty trap we also explore the implications of public policies on the trap and on the long run stable steady state in particular we find that government should decrease debt and increase pollution abatement to promote capital accumulation and environmental quality at the stable long run steady state finally a welfare analysis shows that there exists a level of public debt that allows a long run steady state to be optimal

the economics of coupled farm subsidies under costly and imperfect enforcement this study relaxes the assumption of perfect and costless policy enforcement found in traditional agricultural policy analysis and introduces enforcement costs and cheating into the economic analysis of output subsidies policy design and implementation is modeled in this paper as a sequential game between the regulator who decides on the level of intervention an enforcement agency that determines the level of policy enforcement and the farmer who makes the production and cheating decisions analytical results show that farmer compliance is not the natural outcome of self interest and complete deterrence of cheating is not economically efficient the analysis also shows that enforcement costs and cheating change the welfare effects of output subsidies the efficiency of the policy instrument in redistributing income the level of government intervention that transfers a given surplus to agricultural producers the socially optimal income redistribution and the social welfare from intervention

on the design of agricultural policy mechanisms the fact that different agricultural policy mechanisms have emerged for different commodities suggests that the choice of policy instrument may reflect the goals of agricultural policy makers this paper uses the principles of mechanism design under asymmetric information to examine the motivations underlying the choice of agricultural policy mechanisms it is found that supply control mechanisms favor high cost producers and the budget while mechanisms resulting in overproduction favor low cost producers

monetary policy shocks and the dynamics of agricultural commodity prices evidence from structural and factor augmented var analyses fluctuation in commodity prices is a significant and timely issue to be studied this study is to examine the impact of monetary policy and other macroeconomic shocks on the dynamics of agricultural commodity prices the major contributions of this study are twofold first unlike other studies that use indexes this study analyzes the commodities individually affording the inclusion of commodity specific fundamentals such as the level of inventory an important determinant of commodity price in a structural var framework second it exploits a rich data set of agricultural commodity prices which includes commodities that are usually overlooked in the literature and extracts a common factor using the dynamic factor model to understand the extent of comovement of the prices and to gauge the extent to which macroeconomic shocks drive the comovement in a factor augmented var favar framework the findings show that monetary policy global economic conditions and the u s dollar exchange rates play an important role in the dynamics of agricultural commodity prices

stop and go agricultural policies with a land market this article studies the design of farm policy in the presence of asymmetric information about farmers productivity a government objective to insure farmers a minimum parity income an endogenous land rent and diminishing returns on alternative nonprogram crop land uses in this setting acreage set asides are never part of an optimal farm policy although compensated acreage limits are when there are new farmer entrants who cannot be excluded from farm programs optimal policy takes the form of a pure voluntary acreage limitation or buyout program in which high cost producers participate and low cost producers do not copyright 2003 oxford university press

debt for nature swaps as noncooperative outcomes abstract recently nongovernmental organizations have engaged in debt for nature swaps in an effort to slow the rate of deforestation the purpose of this paper is to provide analysis of the welfare properties that arise to self enforcing swaps we show that swaps may be self enforcing in that they can arise as noncooperative equilibria at high harvest and debt levels under these conditions a credit constrained ldc is likely to reduce harvest levels similarly if the ngo views preservation projects as complements it is likely to provide debt relief we provide simulations to demonstrate the effects of different parametric values for the utility functions of the ldc and ngo on the noncooperative and cooperative equilibria

the effects of macroeconomic announcements on commodity prices this article analyzes the immediate reaction of a representative sample of commodity prices and two t bill yields to the unanticipated components of thirteen macroeconomic announcements surprises in the monetary variables cause the majority of the significant commodity price responses while these plus other cyclical surprises such as the unemployment rate cause significant lumber and t bill reactions the results provide strong support for the policy anticipations hypothesis and against the inflationary expectations hypothesis i e that monetary surprises cause changes in real interest rates rather than in nominal rates only as the inflationary expectations hypothesis contends

ecolocical certification of forest products economic challenges abstract with increasing rates of forest depletion worldwide increasingly the question is being asked can markets play a role in mitigating the deleterious environmental and social impacts of forestry activities the forest stewardship council and others have proposed systems of ecological certification where otherwise very similar products are viewed by consumers as different products because additional information on the products history is provided the certification assures the consumer that the products have been produced with practices that meet fundamental ecological and social standards for ecological certification systems to be viable and deliver products to the market over the long term the relationships among key components must evolve economically and institutionally consisting of local forest management firms local certifying non government organizations international non government organizations timber and product markets the ecological certification system transcends local forests and communities to international markets conceptually the system is a series of principal agent relationships this paper in addition to developing the concept of ecological certification analyzes the relationships among the many actors and the relationship of the actors to the forest

can economic causes of tropical deforestation be identified at a global level this paper contributes to the literature on the macro scale economic determinants of the increase in global forest depletion by performing a regression analysis based on a panel dataset for fifty tropical countries over an eighteen year period while the initial findings appear at first to confirm a common causality pattern of selected macroeconomic variables in influencing tropical deforestation subsequent statistical tests question the significance of the results more specifically testing for autocorrelation which has been downplayed in previous studies appears to represent a critical issue when the initial results are corrected for autocorrelation the significance of the parameters declines substantially below statistically acceptable levels the implications are twofold first regression analyses that seek to explain deforestation at the global level need to be carefully scrutinised and checked to ensure that they meet standard statistical tests second tropical deforestation might ultimately depend upon case specific factors and further research may render more effective policy suggestions if conducted at a more disaggregated local level

agricultural expansion and deforestation modelling the impact of population market forces and property rights abstract this paper compares four different modelling approaches to agricultural expansion and deforestation and explores the implications of assumptions about the household objectives the labour market and the property rights regime a major distinction is made between population and market based explanations many of the popular policy prescriptions are based on the population approach assuming subsistence behaviour and limited market integration within a more realistic particularly for the long term effects market approach well intentioned policies such as agricultural intensification programmes may boost deforestation many forest frontier contexts are also characterized by forest clearing giving farmers land rights deforestation becomes an investment to the farmer and a title establishment strategy land titling and credit programmes may therefore increase deforestation

identifying monetary impacts on agricultural prices in var models since the mid 1970s a number of studies have used vector autoregressive var models to evaluate the magnitude and timing of macroeconomic impacts on agriculture use of the var method has been viewed as a way to obtain empirical evidence about these impacts that might not emerge from more traditional overidentified and less dynamic econometric models the hope has been that by placing minimal restrictions on var models the true structure of the economic relationships under investigation can be observed while the aim is laudable critics of var models have argued that it has had the unfortunate consequence of obscuring some important structural identification issues and seeming to promise that something can be obtained for nothing cooley and leroy leamer they point out that identifying restrictions are required to give economically interpretable meaning to the results of any simultaneous equation model sem in standard practice identification of var models is obtained implicitly by choice of a choleski decomposition of the covariance matrix of one step ahead forecast errors which is equivalent to imposing a recursive structure for the economy of concern is that the recursive structure may not be believable further as bernanke has observed examination of ad hoc variants of the recursive order implies a strange set of prior beliefs in which the analyst holds strongly that the system is recursive but is not sure in what order the variables should be arranged in response to these concerns several recent papers have pointed out that identification of var models does not have to rely on the assumption that the contemporaneous structure is recursive bernanke sims rather the distinguishing features of a var model are first that identification rests on the assumption that distinct mutually orthogonal behavior shocks drive the economy and second that lagged relationships among the endogenous and exogenous variables if any are left entirely unrestricted given these features a var model must be identified solely by restrictions placed on the contemporaneous interactions among the variables but the identifying restrictions do not have to preclude simultaneity in this paper we elaborate on the structural interpretation of var models and use this analysis to examine monetary impacts on agricultural prices we discuss the identification problem and the implications of a recursive structure we illustrate our points with respect to the three variable model of money industrial prices and agricultural prices that has been used in several articles to evaluate the effects of monetary shocks on price dynamics bessler devadoss and meyers we then introduce a somewhat richer behavioral model of the macroeconomy and its effects a simultaneous model is shown to offer a more believable identification of monetary policy and other macroeconomic shocks than a recursive model and monetary impacts on agricultural prices are assessed

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

eliminating price supports a political economy perspective abstract this paper characterizes information and politically constrained government programs for eliminating price supports the issues which we examine in this model include i to what extent is it possible to reduce the size of oversubscribed industries in light of the information and political constraints that exist is a complete decoupling of a worker s compensation from her output possible or desirable ii which type of workers as characterized by their skill levels and outside employment opportunities remain in the industry iii which type of worker is harmed by the relocation program which coalitions of workers will oppose the reorganization

deforestation and seigniorage in developing countries a tradeoff abstract most of countries covered by natural forests are developing countries with limited ability to levy taxes and restrained access to international credit markets consequently they are amenable to draw heavily on two sources of government financing namely seigniorage and deforestation revenues first we develop a theoretical model emphasizing a substitution effect between seigniorage and deforestation revenues second a panel data econometric analysis over the 1990 2010 period confirms our findings consequently a tighter monetary policy hastens deforestation third we extend the theoretical model and show that international transfers dedicated to forest protection can upturn the positive link between tighter monetary policies and deforestation and then discuss the relevance of this finding with respect to recent institutional arrangements

effects of the monetary macro economy on canadian agricultural prices this paper examines the importance of monetary macro economic variables on canadian agricultural prices using vector autoregressive var modeling the research results suggest that u s monetary macro economic policy as represented by the u s world exchange rate is the most significant monetary factor influencing canadian agricultural price instability the paper also examined how agricultural prices and manufactures prices respond to a monetary shock the results suggest that agricultural prices respond more quickly in the short run but that manufactures prices catch up in later periods this conclusion supports bordos contract length hypothesis and frankel s overshooting hypothesis it does not support tweeten s cost price squeeze hypothesis

conservation organizations and the option value to preserve an application to debt for nature swaps abstract this paper presents an analytical model of the option to preserve environmental goods motivated by the existence of debt for nature swaps conservation organizations option value arises from the option to reject or accept the terms of a bargain concerning the exchange of the debt holding of a conservation organization for land preservation from the resulting closed form solution of the option to preserve simulations are performed showing the importance of the conservation organization s willingness to pay for preservation and the correlation between the willingness to pay and the value of the asset to be exchanged on the option value

demand side policies for environmental protection and sustainable usage of renewable resources abstract since many renewable resource systems such as tropical and temperate forests coral reefs and wild fisheries are often exploited at unsustainable rates studies aimed at reducing these trends have focused on the market failures associated with over exploitation within this framework the literature devised what we term supply side policies to correct these market failures here we introduce demand side policies into the mix of renewable resource and environmental management policies these policies are designed to increase the demand for goods produced in a sustainable fashion by 1 promoting the long term conservation of natural capital assets 2 promoting the attainment of economic efficiency and 3 providing greater political acceptability relative to supply side policies

poverty policies and deforestation the case of mexico this study examines the determinants and policy implications of deforestation in mexico and includes a brief review of the relevant empirical literature and a description of the theoretical model land use patterns and socioeconomic and physiogeographic factors are determinants data were obtained from digital maps of land use and soils and the 1990 population and 1991 agricultural censuses a simple 2 period equation formalizes the relationship between deforestation and poverty government policies and local land tenure in period 1 representative producers in municipalities have 4 options in allocating labor time wage generation agricultural production deforestation on land without clear property rights and investment in technology during period 2 the options are to farm on available land and deforested areas or work in the wage sector findings reveal that 1 communal land tenure ownership by the ejido did not increase deforestation 2 pricing that favors maize production which is very land intensive increased deforestation and technical assistance reduced deforestation and 3 poverty was related to higher rates of deforestation prices were the most important immediate factor in unsustainable resource use but other factors had an impact the government policy mix did not support sustainable development reduced subsidies would benefit the environment the government should provide safety nets to increase the level of rural investment and reduce poverty and should improve land productivity with technical inputs trade liberalization and elimination of subsidies should be sensitive to the poors need for real wages

land use and income diversification comparing traditional and colonist populations in the brazilian amazon this article compares and analyzes land use and income diversification among two distinct groups of farmers in the brazilian amazon recent colonists in ouro preto do oeste rondonia and traditional long term residents along the tapajos river para we investigate the hypothesis that farmers who diversify their cash income sources clear less forest on an annual basis and we compare these livelihood choices across colonist and traditional populations in particular we develop a conceptual model based on the household production framework and use econometric models to identify determinants of diversification and forest clearing we find that diversification of agricultural cash crops is negatively correlated with forest clearing by colonists providing limited evidence for the hypothesis other significant covariates of diversification and forest clearing include cash income levels stage in family life cycle cattle ownership and chemical inputs differences in these variables and differences in household response to these variables explain variation in diversification and forest clearing across the two populations

the goals of u s agricultural policy a mechanism design approach this article examines motivations underlying the government s choice of alternative policy mechanisms for subsidizing agriculture optimal policies are analyzed for three government objectives one where the government wishes to ensure a minimum level of net income for all farmers a second where the government s only concern is to transfer income from consumers and taxpayers to the farm sector and a final augmented income transfer objective the analysis offers an explanation for agricultural policy mechanisms that involve overproduction by high cost producers relative to a free market equilibrium such a distortion might arise from the existence of nonmarket values for the production of relatively high cost farmers in the government s objective

relative agricultural prices and monetary policy an imperfect information rational expectations model of relative price determination is presented this model provides an econometric specification for testing for a causal relationship between money and the relative prices of agricultural commodities test results indicate that variations in the growth rate of the nominal money supply whether anticipated or unanticipated have not been an important influence on the average level of prices received by farmers relative to other prices in the economy over the period 1951 85

deforestation and the environmental kuznets curve an institutional perspective institutions for secure property rights and better environmental policies for moving the system towards a sustainable growth path can reduce the height of an environmental kuznets curve ekc relationship between income and deforestation this study examines the impact of these specific institutional factors on the ekc relationship for deforestation across latin american african and asian countries the factors related to agricultural production population economy and governmental policies of each country are hypothesised to affect deforestation results of the latin american countries show significant evidence of an ekc relationship for deforestation and also relevance of the institutional factors to reduce the rate of deforestation improvements in institutions for secure property rights and better environmental policies can thus significantly reduce the rate of deforestation without hindering the level of economic growth evidence also suggests that the effect of agricultural production on deforestation could be halted by strengthening institutional factors there was found to be complementarity between the institutional factors and forest sector polices and an additive effect between the institutional factors and forest products export promotion policies which could also eventually reduce the rate of deforestation

relative prices and money a vector autoregression on brazilian data recent data on brazilian agricultural prices industrial prices and money supply are analyzed in a vector autoregression the empirical findings show strong one way granger type causality from money supply to agricultural prices while feedback is observed between industrial prices and money supply under the usual monetarist ordering of contemporaneous innovation covariance agricultural prices do not adjust faster than industrial prices to a shock in the money supply

stop and go agricultural policies the optimal design of farm policy and public investment in agriculture in the presence of asymmetric information between the government and farmers is studied it is shown that a mix of capped deficiency payments and voluntary paid land diversion can implement the optimal policy outcome optimal program design requires large farmers to farm all their land and small farmers may or may not divert acreage decoupled policies are never optimal

macroeconomic change competitiveness and timber production a five country comparison summary this study analyzes how long run macroeconomic fluctuations have affected timber production levels in five tropical oil producing countries gabon cameroon papua new guinea png venezuela and ecuador the core hypothesis is that oil booms foreign borrowing and other major foreign exchange inflows slow down timber harvesting these inflows cause dutch disease depressing the price competitiveness of timber exports and other trade exposed sectors a qualitative examination of long run trends in the five countries is combined with simple econometrics the findings confirm a strong impact of competitiveness on logging substantial real currency devaluation can greatly accelerate timber exports yet in middle income countries with strongly expanding domestic timber markets ecuador cameroon venezuela home market demand also rises much with urban incomes and population when full or partial import protection occurs this translates into rising domestic production the relative weight of these two potentially significant factors varies widely so policies to influence extraction levels need to be tailored accordingly

redd and forest transition tunneling through the environmental kuznets curve abstract international attention is focused on finding ways to reduce emissions from deforestation because of the emerging concerns over climate change however the causes of deforestation are rooted in current economic and development paradigms the causes of deforestation also vary across different geographical regions and have implications for the forest transition attempts to reach an international agreement on curbing deforestation have achieved little success despite over 30 years of un negotiations new initiatives from redd reducing emissions from deforestation and forest degradation could provide financial incentives to curb deforestation hence alternative development paths for forest cover changes and forest transition are analyzed for the redd policy within the framework of an environmental kuznets curve ekc for deforestation the ekc models are estimated for geographical regions of latin america africa and asia the results based on the panel data analysis of 43 countries covering the period 1970 1994 provides evidence that an inverted u shaped ekc fits for latin america and africa while a u shaped ekc applies to asia the results also indicate that strengthening agricultural and forestry sector policies are important for curbing deforestation the ekc models estimates could provide guidance for decisions on financing the redd policy as specific to each region

commodity price dynamics and anticipated shocks in this paper we address the robustness of overshooting hypothesis in agricultural prices we find that agricultural prices may undershoot their long run level if the economy experiences an anticipated monetary shock rather than an unanticipated monetary shock we also find that agricultural prices definitely display undershooting if the price of manufactures adjusts instantaneously rather than sluggishly

forest resource depletion soil dynamics and agricultural productivity in the tropics abstract a two sector dynamic model for agriculture and forestry is proposed agricultural yields are a function of the rate of deforestation the forest stock and purchased inputs we examine the impact of changes in the social discount rate net returns to agriculture and direct marginal benefits of the forest stock benefits on the optimal deforestation path under the assumption of a quadratic agricultural yield function finally steady state comparative static analysis is conducted

commodity prices money surprises and fed credibilit strict monetarist theory in an extreme form holds that excessive money growth or the expectation of future money growth shows up immediately in the rapid inflation of goods prices however it is widely argued that for most goods prices are in fact sticky in the short run and reflect money growth only in the long run if one seeks a sensitive market measure of the perceived looseiless or tightness of monetary policy one must look elsewhere than at the general price level interest rates being determined in quickly adjusting financial markets are free to respond immediately to expectations regarding monetary policy in 1981 and 1982 every friday at 4 10 p m eastern standard time the federal reserve board would announce the money stock for the week ending nine days previously if the announced money stock was different from what the market had been expecting interest rates generally jumped in the same direction clearly they were responding to revisions of the expected future path of the money stock but nominal interest rates are an ambiguous indicator of expectations on the one hand an announced increase in the money stock may be received by the market as indicating a higher

relative prices and money further results for the united states empirical results support the hypothesis that agricultural prices respond faster than manufactured product prices to a change in money supply in the united states sims vector autoregression var technique was applied in examining this hypothesis the monte carlo integration method was used to test the significance of the impulse responses generated by the var technique

population tenure and natural resource management the case of customary land area in malawi abstract this paper analyzes the factors determining conversion of woodlands to agricultural land changes in tree cover and maize yield for the last two and a half decades by using aerial photos and field survey data in 57 communities in malawi the econometric analysis revealed that population pressure led to greater land conversion but had no effect on yield or tree cover changes areas where greater changes in traditional tenure systems have occurred are associated with reduction in tree cover and expansion of agricultural land these results suggest the importance of strengthening institutions to manage natural resources

expectations and commodity price dynamics the overshooting model monetary policy has important effects on agricultural commodity prices because though they are flexible other goods prices are sticky this paper formalizes the argument by applying the dornbusch overshooting model a decline in the nominal money supply is a decline in the real money supply in the short run it raises the real interest rate which depresses real commodity prices they overshoot their new equilibrium in order to generate an expectation of future appreciation sufficient to offset the higher interest rate these real effects which vanish in the long run also result from a decline in the money growth rate