new human resource management practices complementarities and the impact on innovation performance in this paper we take our theoretical point of departure in recent work in organisational economics on systems of human resource management hrm practices we develop the argument that just as complementarities between new hrm practices influence financial performance positively there are theoretical reasons for expecting them also to influence innovation performance positively we examine this overall hypothesis by estimating an empirical model of innovation performance using data from a danish survey of 1 900 business firms using principal component analysis we identify two hrm systems which are conducive to innovation in the first one seven of our nine hrm variables matter almost equally for the ability to innovate the second system is dominated by firm internal and firm external training of the total of nine sectors that we consider we find that the four manufacturing sectors correlate with the first system firms belonging to wholesale trade and to the ict intensive service sectors tend to be associated with the second system

bounded price variation and rational expectations in endogenous switching model of the u s corn market a model that includes bounded price variation and rational expectations by producers is estimated for the u s corn market the resulting model specification is highly nonlinear though since the probability of market equilibrium must be determined endogenously unlike previous research the cross equation restrictions implied by the rational expectations hypothesis are incorporated in the bounded prices model by using fair and taylor s 1983 procedure for obtaining maximum likelihood estimates of nonlinear rational expectations models the resulting model is compared against a standard equilibrium model with naive expectations the results show the bounded prices model is a superior specification copyright 1989 by mit press

dynamic animal economics market equilibrium dynamics of herd inventory management are derived for homogenous female populations short run supply is backward bending in response to permanent changes in demand and is rising in response to transitory changes in demand increasing inventories are associated with high and falling prices and decreasing inventories with low and rising prices but there is no market instability in this these unusual intertemporal substitution effects follow from both rational expectations and appropriately formulated cobweb models and go part of the way toward explaining hog and cattle inventory cycles

rational versus adaptive expectations in present value models using data on stock price and dividends and on long term and short term interest rates we test an important implication of present value models that current value is a linear function of the conditional expectations of the next period value and the current determining variable this implication combined with rational expectations re is strongly rejected combined with adaptive expectations ae it is accepted the latter model can also explain the observed negative relation between the rate of return and stock price thus the re assumption should be used with caution the ae assumption may be useful in econometric practice

econometric developments in agricultural and resource economics the first 100 years this article reviews the major contributions of agricultural and resource economists in the area of econometrics over the past 100 years early on a number of agricultural economists were in on the ground floor in terms of developing new econometric methods over time as the economics profession became more empirically oriented agricultural and resource economists increasingly assumed the role of early adopters of new econometric methods even so agricultural and resource economists continue to make useful modifications to econometric techniques in order to adapt the methods to the unique nature of the problems and applications that we study

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

a rational expectations model of agricultural supply this work suggests a dynamic linear rational expectations modeling strategy for using time series observations to study the impact of product prices on agricultural production and land allocation the farmer s decision consists of specifying each period the portion of his land to be devoted to the growing of alternative crops the dynamic element in the farmer s problem comes from the technology a quadratic production technology is used the farmer s optimal land allocation decision rules are derived as linear functions of past land allocations expectations of future product prices and other exogenous variables and they can be interpreted as an optimal crop rotation assuming rational expectations and the exogeneity of prices for a small open economy one obtains closed form linear regression equations representing decision rules and stochastic processes these are then estimated and tested using maximum likelihood methods and aggregate data from the egyptian agriculture

solving empirical bioeconomic models a rangeland management application an empirical bioeconomic model was developed for private ranches conducting firewood cattle and hunting enterprises on california s hardwood rangelands hunting forage cattle and oak firewood production functions were derived nonlinear optimal control was used to solve for two state and four control variables to give optimal time pathways for oak density and cattle stocking risk was considered through use of chance constraints rainfall variability and price expectations commercial hunting is shown to be the dominant economic value on these rangelands inclusion of stochastics shifts production away from cattle to less risky firewood and hunting enterprises

a simple model of endogenous agricultural commodity price fluctuations with storage a debate has been raging for centuries regarding the effects of interannual storage on commodity prices most analysts consider storage to function as a price stabilizer while others place it at the core of an explanation of intriguing features of commodity price series such as skewed distributions most studies have been developed in the context of the theory of competitive storage where random shocks affect supply or demand recently the endogenous chaotic behavior of markets has become another possible hypothesis regarding the origin of commodity price fluctuations we develop a nonlinear cobweb model with intra and interannual storage risk averse agents and adaptive expectations like the theory of competitive storage this nonlinear cobweb model with storage can reproduce some of the stylized facts of agricultural commodity prices autocorrelation of first rank low kurtosis and skewness in addition the effects of storage on price variation are mixed in the presence of interannual storage chaotic price series show less variation compared to a situation without interannual storage but we find that storage contributes to the endogenous volatility of prices by making chaotic dynamics more likely

the forward premium in a model with heterogeneous prior beliefs abstract this paper explores a model of bond prices where agents have diverse prior beliefs about domestic and foreign inflation in the long run the foreign exchange forward premium reflects expected differences in inflation but in the short run it depends upon the diversity of prior beliefs if some people have diffuse priors about a country s inflation process then its currency commands a forward premium that is eventually dissipated using data on the dollar mark premium from the 1980s it shows that this kind of diversity really matters thus models with a single representative agent give an inadequate description of the data

positive welfare effects of trade barriers in a dynamic partial equilibrium model we develop a simple two region cobweb type dynamic partial equilibrium model to demonstrate the existence of optimal possibly non zero trade barriers a pure comparative statics analysis of our model suggests that a reduction of trade barriers modeled as small but positive import tariffs always enhances welfare however taking a dynamic perspective reveals that nonlinear trade interactions between two regions may generate endogenous price fluctuations which can hamper welfare finally we allow special interest groups such as consumers or producers from these two regions to lobby for a particular level of trade barriers our model predicts that time varying trade barriers may be another channel for market instability

a dynamic model of investment in the u s beef cattle industry reproduction constraints lead to some a priori information that may prove valuable in econo metrically modeling inventory dynamics within the u s cattle herd the distributed lag models estimated for animal inventories suggest an implicit incorporation of the age distribution of the herd that is crucial to understanding the retention culling investment decisions the estimated equations are validated using post sample observations that were withheld prior to estimation the final form dynamic equations have complex roots and protracted price and investment effects the parameter estimates are used to calculate intermediate and long run elasticities at the means of relevant variables

mission control the development of personnel systems in u s industry this paper examines historical differences in personnel practices among u s industries to explore the roots of modern bureaucratic work control we report multivariate analyses of data describing organizational personnel practices collected by the national industrial conference board between 1935 and 1946 we find evidence of three early strands of bureaucratic labor control in different industrial sectors worker allocation and job evaluation techniques which evolved from scientific management in modern assembly line industries internal labor market mechanisms in white collar nonmanufacturing practices related to seniority and the formalization of rules in unionized and skilled industries our analyses suggest that the institutional environment and the historical period of an industry s founding were among the central contingencies shaping labor control in a particular sector as were several factors that past research has emphasized more such as technology and skills labor market conditions and unionization our analyses thus corroborate some previous accounts of industrial differences in bureaucratic control while also suggesting some revisions concerning where when and why employment relations first became bureaucratized

expectation calculation and macroeconomic dynamics the authors establish a framework wherein agents make expectation revision decisions subject to a specified calculation technology and preferences over forecast errors the technology endows agents with correctly specified economic models but the cost of expectation calculation using these models leads to gradual and incomplete adjustment to long run rational expectation equilibrium the rational expectations hypothesis emerges as a special case of the equilibrium paths obtained in the authors framework in a natural rate model of monetary policy calculation technology gives rise to long run nonneutrality and hysteresis effects and incomplete adjustment of forecast rules causes output fluctuations to be amplified copyright 1992 by american economic association

investment and disinvestment principles with nonconstant prices and varying firm size applied to beef breeding herds variable beef breeding herd sizes are found to be optimal given cyclical beef prices traditional replacement theory does not allow variable firm size because unequal investment replacement and disinvestment culling rates are not possible if firm size changes cost of production per unit endogenously changes given a u shaped cost curve optimal investment and disinvestment rules for variable firm size are developed based upon the firm s cost curve and discounted net revenue flows for a finite rolling planning horizon current and future investment and disinvestment decisions are linked by their mutual effect on firm size and hence production cost per unit

price stabilization using buffer stocks abstract the price stabilization problem is stated and solved for a nonlinear cobweb model with government stocks it is shown that if the storage capacity for the commodity is sufficiently large then there exists a simple stabilization policy called the keep supply at equilibrium kse policy such that the equilibrium price is a global attractor for the corresponding closed loop system in addition it is shown that if the government approximates the equilibrium supply with the average supply stabilization is guaranteed we refer to this policy as keep supply at average ksa

stochastic rangeland use under capital constraints the stocking density on kazakhstan s extensive rangelands is well below traditional levels to analyze dynamic flock performance we develop a stochastic dynamic programming model for livestock systems with stochastic forage production the model contains continuous five state and 12 control variables allowing improved characterization of the biophysical relationships and economic tradeoffs inherent in such systems most kazakhstan herders have restricted access to capital the model indicates that the cost of capital strongly affects flock size and productivity we conclude that capital constraints are important to explaining the current low stocking density improving capital markets in rural areas warrants policy attention

the theoretical foundation of industrial relations and its implications for labor economics and human resource management the author identifies the core principle that forms the theoretical and policy foundation for the field of industrial relations labor is embodied in human beings and is not a commodity and argues that the field s two central dependent variables are labor problems and the employment relationship next he uses this core principle along with complementary ideas from institutional economics to develop a theoretical framework that not only explains the nature of the employment relationship and labor problems but also reveals shortcomings in related theories from labor economics and human resource management finally this framework is used to derive the fundamental theorem of industrial relations demonstrate that optimal economic performance occurs in a mixed economy of imperfect labor markets and organizations and show that a certain amount of labor protectionism promotes economic efficiency and human welfare

short run supply responses in the u s beef cattle industry this article investigates the response of beef cattle producers to changes in the price of cattle previous research has suggested that there may be a negative short run supply response to a permanent increase in the price of cattle we build a dynamic rational expectations model that separates the markets for fed and unfed beef this separation generates predictions that the supply response is generally positive even for permanent shocks in the short run and nests the negative supply response as a special case for appropriately restricted demand shocks

worldwide acreage and yield response to international price change and volatility a dynamic panel data analysis for wheat rice corn and soybeans this study estimates a worldwide aggregate supply response for key agricultural commodities namely wheat rice corn and soybeans by employing a newly developed multi country crop and calendar specific seasonally disaggregated model with price changes and price volatility applied accordingly the findings reveal that although higher output prices serve as incentives to improve global crop supply as expected output price volatility acts as a disincentive depending on the crop the results show that own price supply elasticities range from about 0 05 to 0 40 output price volatility however has negative correlations with crop supply implying that farmers shift land other inputs and yield improving investments to crops with less volatile prices simulating the impact of price dynamics since 2006 we find that price risk has reduced the production response of wheat in particular and to a lesser extent rice thus dampening price incentive effects the simulation analysis shows that the increase in own crop price volatility during the 2006 2010 period has dampened yield by about 1 2 for the crops considered

price volatility and rational expectations in a sectoral framework commodity model a multivariate garch approach this article explores supply response models in a rational expectations framework with endogenous risk by using a multivariate generalized autoregressive conditional heteroskedasticity model with cholesky decomposition this approach allows the incorporation of price volatility as a risk factor into the supply response of a primary commodity sector that is composed of several markets of homogenous products the model is applied to the greek meat sector which is composed of four major meat categories that is beef lamb pork and broiler and thus the model for the entire market includes supply and demand equations for all the four meat markets which are estimated simultaneously the empirical results confirm that price volatility is a significant risk factor in greek meat production and also provide useful implications about the cost factors of production furthermore the empirical findings show that the last reform of the common agricultural policy seems to have had a negative effect on beef and lamb production in greece

modes of theorizing in strategic human resource management tests of universalistic contingency and configurational performance predictions the field of strategic human resource management shrm has been criticized for lacking a solid theoretical foundation this article documents that contrary to this criticism the shrm literature

impact of perennial energy crops income variability on the crop selection of risk averse farmers abstract the uk government policy is for the area of perennial energy crops in the uk to expand significantly farmers need to choose these crops in preference to conventional rotations for this to be achievable this paper looks at the potential level and variability of perennial energy crop incomes and the relation to incomes from conventional arable crops assuming energy crop prices are correlated to oil prices the results suggests that incomes from them are not well correlated to conventional arable crop incomes a farm scale mathematical programming model is then used to attempt to understand the affect on risk averse farmers crop selection the inclusion of risk reduces the energy crop price required for the selection of these crops however yields towards the highest of those predicted in the uk are still required to make them an optimal choice suggesting only a small area of energy crops within the uk would be expected to be chosen to be grown this must be regarded as a tentative conclusion primarily due to high sensitivity found to crop yields resulting in the proposal for further work to apply the model using spatially disaggregated data

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

beyond microfoundations towards a not too rational macroeconomics at ucla we are establishing a center for computable economics i have been very much involved in this effort this may surprise you that a non mathematical macro monetary economist should become an enthusiast for this project is one of those things that do not compute but then as i will explain we take a special interest in things that do not compute one may come to computable economics by many intellectual routes i will trace my own not because it makes a particularly edifying story but because it will tell you what kind of problems i hope we can make progress on by developing the field of computable economics but before we get to that i had better explain what i mean by computable economics

micro economic models of beef supply a series of micro economic models of cow calf and feedlot operators is developed in an effort to isolate factors important in beef supply slight changes in behavioural assumptions are shown to imply qualitatively different comparative static reactions on the part of these cattlemen some empirical examples of the feedlot operator are presented based upon an estimated weight gain function modeles microeconomiques d offre de boeuf l auteur developpe une serie de modeles microeconomiques du comportement des producteurs de veaux et des engraisseurs de betail afin d identifier les facteurs les plus importants dans la definition de l offre de boeuf des variations minimes dans le comportement presume se traduisent par des reactions qualitativement differentes des producteurs de betail en statique comparative on presente quelques exemples empiriques du comportement de l engraisseur a partir d une fonction calibree de gains de poids

adaptive expectations and cobweb phenomena does heterogeneity matter this paper studies a cobweb type commodity market characterized by a strictly monotone demand and supply in which n types of firms operate types differ in a key parameter governing price expectations which are supposed to be adaptive the unique steady state of the resulting economic dynamics is characterized in terms of stability and the impact of the number of firms types is studied to this end the notions of structural and behavioural degree of instability which are introduced in the paper prove to be crucial in determining whether stability or instability prevail the case of market integration is also considered and conditions to have stability or instability in terms of the original markets parameters are given the baseline structure is extended in two directions the first extension assumes the point of view of an authority who is uncertain about the firms types in this case the structural degree of instability determines how heterogeneity affects the probability of ending up with a stable outcome the second extension consists in endogenizing the choice of predictors through a discrete choice based evolutionary mechanism in both cases the amount of the heterogeneity and its possible variations play a critical role in shaping the range of possible long run outcomes of the model

inflation expectations and macroeconomic dynamics the case of rational versus extrapolative expectations the motivation of this paper is to understand the effects of coupling a macroeconomic model of inflation rate dynamics relying on an aggregate expectation to a heterogeneous expectations framework a standard macroeconomic textbook model consisting of okun s law an expectations augmented phillips curve and an aggregate demand relation is extended to allow agents the possibility of selecting between different types of forecasting strategies to predict the future inflation rate rules that have produced low prediction errors in the recent past are favored by agents here we consider trend following and rational expectations using a mixture of analytical and numerical tools we investigate the model s dynamics and discuss the conditions under which the extended model leads to endogenous fluctuations in macroeconomic variables some preliminary results are offered for the case in which a taylor like monetary policy rule is included in the model jel classification c61 c62 e31 e32

foot and mouth disease and the mexican cattle industry the objective of this article is to analyze the domestic and international effects of a hypothetical foot and mouth disease fmd outbreak in the mexican cattle industry a discrete time dynamic optimization model of the mexican cattle sector is specified and linked to domestic and international markets economic consequences of fmd outbreaks are simulated over time and under different scenarios specific findings and general policy recommendations are provided the study reports a range of outbreaks from localized to large scale and suggests that changes in economic surplus due to fmd range from a positive net gain of 0 89 to 1 6 billion to a net loss of about 67 billion depending on the specific mitigation strategy and outbreak scenario

a dynamic stochastic programming model of crop rotation choice to test the adoption of long rotation under price and production risks this article investigates the role played by both production and market risks on cash crop farmers decision to adopt long rotations considered as innovative cropping systems we build a multi period recursive farm model with discrete stochastic programming the model arbitrates each year between conventional and innovative longer rotations yearly farming operations are declined according to a decision tree so that production risk is an intra year risk market risk is considered as an inter year risk influencing crop successions simulations are performed on a specialized french cash crop farm they show that when the long rotation is subsidized by an area premium farmers are encouraged to remain in longer rotations they also show that a high level of risk aversion tends to slow down the conversion towards longer rotations

price dynamics in biological production processes exposed to environmental shocks this paper demonstrates a mechanism by which environmental shocks in biological production processes can lead to extreme price movements and thus be a contributing factor to short term food price volatility in biological production processes environmental shocks can lead to a stock out when the harvest transitions to a new stock year class with a different marginal value the result in the market is a temporary price spike or bubble bounded by the marginal value of the new stock we highlight this phenomenon in a cohort or year class biological production setting each year class in the model is a finite non renewable capital stock and capital theory is used to solve for the stochastic dynamic competitive equilibrium the model is parameterized to be representative of the norwegian salmon aquaculture industry results suggest that the model can replicate much of the observed patterns in price harvest and capital stock dynamics including the infrequent occurrence of extremely high prices in the market

an econometric model of cattle inventories dynamic regression equations are estimated for each beef cattle breeding herd and beef cattle inventories at two levels of aggregation the u s and montana the analysis for montana was utilized as a guide for specification of the national equation to reduce the inference problem associated with letting the sample data help specify the model rational lags on average price received by farmers for calves and the ratio of fed beef to corn prices at omaha constitute the primary explanatory variables the equations perform exceedingly well over the sample period 1950 80 and in post sample forecasts with the sample truncated back to 1970

an indirect test for the specification of expectation regimes this paper develops an empirical strategy for testi ng competing hypotheses of expectation regimes when direct measures of expectati ons are unavailable the procedure takes as given an assumed structural relation ship between expected values of exogeneous variables and a given decision variab le by imposing different expectation regimes on this model the authors obtain an artificial nesting of the hypothesized regimes which allows us to test whethe r any specification dominates this methodology is extended to multipleequation applications with any number of hypothesized expectation regimes the tests are illustrated using a model of the response of county level farm acreage allocati on to expected commodity prices copyright 1986 by mit press

a reconsideration of the in sensitivity of tests of the intertemporal allocation of consumption to near rational alternatives abstract this paper uses micro data to show that the utility loss from near rational behavior can be very significant we calculate the utility loss from using a sub optimal consumption allocation rule in a permanent income setting where utility is quadratic in contrast to estimates derived from aggregate data cochrane 1987 we find that small deviations from the optimal consumption allocation rule lead to large utility losses more than 100 quarter 1983 dollars

testing the rational expectations hypothesis in an agricultural market a recent survey on models of agricultural supply equations listed over 500 studies in which variants of nerlove s adaptive expectations model were employed one might naively assume that the scientific evidence overwhelmingly favored the adaptive expectations hypothesis but this inference would not be warranted in particular there have been very few studies which have even attempted to estimate a rational expectations version of the traditional agricultural supply models and none that have explicitly tested the rational expectations hypothesis 2 in this paper we estimate a model of agricultural supply and demand for the chicken broiler industry under the maintained assumption of rational expectations in the sense of muth 1961 and provide a series of tests of the model specification we find that in this case the hypothesis of muth rationality receives strong support in recent years there has been increasing interest in models in which economic actors are assumed to form expectations of variables rationally for the most part empirical applications of the rational expectations hypothesis have employed single equation econometric methods these methods have permitted consistent estimation of equations under the assumption of the rational expectations hypothesis but do not allow for any explicit testing of the maintained hypothesis of rationality this paper presents estimates of a simultaneous equation model of the chicken broiler industry using maximum likelihood methods and provides a joint test of the rational expectations hypothesis and the model specification our econometric procedure is related to the recent theoretical work of wallis 1980 and combines time series analysis with traditional econometric estimation techniques under the assumption of rational expectations the model can be solved for the expected price as a function of the expected values of the exogenous variables this function can then be substituted into the model leading to a specification which contains the original endogenous and exogenous variables plus the expected values of the exogenous variables in general following this substitution the model will contain overidentifying restrictions time series analysis is utilized to generate the necessary forecasts of the exogenous variables the complete system of equations is estimated by full information maximum likelihood and the constraints are tested by a log likelihood ratio test the overidentifying constraints arise in the model because the suppliers are assumed to act as if they know both the underlying structure of the model and the stochastic processes governing the exogenous variables the two requirements of rational expectations while the expected price enters only the supply equation of our model it is necessary in the econometric formulation to specify the demand equation the instrumental variable procedures of mccallum 1976 and nelson 1975b are single equation methods and do not permit a test of the rational expectations hypothesis by specifying the complete model the additional structure imposed on the problem allows us to estimate the coefficients and test the implied restrictions there has not been universal agreement that the rational expectations hypothesis is the best theoretical device to model rational behavior according to muth s original formulation economic actors forecast endogenous variables according to the true reduced form equations of the model decanio 1979 and friedman 1979 have argued that the economic actors actually received for publication august 24 1981 revision accepted for publication march 2 1982 university of new mexico and university of california davis respectively we wish to thank g king r l huntzinger r pope and l wegge for advice on this project a nelson and e shaw contributed useful research assistance i the paper by askari and cummings 1977 provides references for these studies 2 huntzinger s 1979 paper is one of the first attempts at estimatitng a rational expectations model of agricultural supply

interacting cobweb markets abstract we enrich the classical cobweb framework by allowing producers to enter different markets the market entry decision is repeated every period and depends on the markets historical profit differentials as a result the number of producers in a market and thus also a market s total supply vary over time analytical and numerical investigations of our four dimensional nonlinear model indicate that interacting cobweb markets may contribute to the strong cyclical price motion observed in many commodity markets we furthermore find that endogenous dynamics may either set in via a flip or a neimark sacker bifurcation interestingly the latter scenario is prevalent if producers are sufficiently risk averse

a simple test of consumption insurance are consumers effectively insured against idiosyncratic shocks to income or wealth either by formal institutions such as charities private insurance and government programs or by informal mechanisms such as gifts and loans from relatives friends and neighbors under full insurance consumption growth should be cross sectionally independent of idiosyncratic variables that are exogenous to consumers this proposition is tested by cross sectional regressions of consumption growth on a variety of exogenous variables full insurance is rejected for long illness and involuntary job loss but not for spells of unemployment loss of work due to strike and an involuntary move

why does on farm storage fail to mitigate price volatility we analyze the role of farm stock management on price volatility under liquidity constraints and heterogeneous price expectations in commodity markets speculative behaviors by stockholders tend to reduce price volatility but this is not the case in certain agricultural markets where speculation by farmers regarding decisions to sell or store grain are subject to liquidity constraints and heterogeneous price expectations like stockholders most farmers sell grain if they expect a price drop in the near future but unlike stockholders they are not necessarily able to purchase grain if they expect a price increase in the next period heterogeneous price expectations can also lead to suboptimal storage decisions further increasing price volatility for these reasons the storage management behavior of farmers often fails to mitigate price drops in the way that speculation by stockholders does we merge historical data on maize prices and household storage collected in burkina faso in order to build a dynamic panel over the 2005 2012 period we show that carry over from one season to the next is associated with unexpected price drops during the preceding lean season and that carry over is associated with more frequent unexpected price drops following the subsequent post harvest season this article is protected by copyright all rights reserved

experimental evidence on inflation expectation formation using laboratory experiments within a new keynesian sticky price framework we study the process of inflation expectation formation we focus on adaptive learning and rational expectations contrary to the previous literature that mostly studied simple heuristics using a test for rational expectations that allows heterogeneity of expectations we find that we cannot reject rationality for about 40 of subjects more than 20 of subjects are also best described by adaptive learning models where they behave like econometricians and update their model estimates every period however rather than using a single forecasting model switching between models describes their behavior better switching is more likely to occur when experimental economy is in a recession

on information and market dynamics the case of the u s beef market abstract the paper investigates the nature of dynamic prices and expectations in a competitive market the approach is applied to the u s beef market which exhibits cyclical patterns and significant biological lags in the production process beef price equations are estimated under different expectation regimes the empirical results indicate the presence of heterogeneous price expectations with a significant number of market participants neglecting information about the existence of a beef cycle

international comparisons of cattle cycles the time series properties of cattle production in three countries with different technologies argentina the united states and uruguay are studied in order to shed light on the role of technology in the dynamics of the cattle sector four series are analyzed for each country slaughter price stock of cows and total herd spectral decomposition of the time series shows the existence of cycles having surprising regularity for all the four time series the three countries exhibit very similar cyclicities in spite of their different technologies and economic environment

stochastic wealth dynamics and risk management among a poor population we use herd history data collected among pastoralists in southern ethiopia to study stochastic wealth dynamics among a poor population although covariate rainfall shocks plainly matter household specific factors including own herd size account for most observed variability in wealth dynamics we find no support for the tragedy of the commons hypothesis past studies may have conflated costly self insurance with stocking rate externalities biophysical shocks move households between multiple dynamic wealth equilibria the lowest suggesting a poverty trap according to nonconvex path dynamics these findings have broad implications for development and relief strategies among a poor population vulnerable to climatic shocks a vast economic literature on risk management rests explicitly or implicitly on the classic friedmanite permanent income hypothesis studies of portfolio management consumption smoothing social insurance and the like all depend on the canonical assumption that stochastic income realisations are drawn from a stationary income distribution leading to consumption smoothing off a stable asset base the possibility of asset accumulation connects this literature to the immense literature on the theory and empirics of economic growth

the sensitivity of tests of the intertemporal allocation of consumption to near rational alternatives suppose a consumer sets consumption equal to income each period rather than following the optimal permanent income decision rule how much utility does he lose this paper finds that the answer is typically less than 10 cents 1 per quarter in environments specified by popular tests on aggregate data it includes calculations of the costs of excess sensitivity and excess smoothness to income and interest rate changes and the costs of ignoring information it concludes that the theory does not make predictions for aggregate tests that are robust to small costs such as information or transactions copyright 1989 by american economic association

modeling beef supply response and price volatility under cap reforms the case of greece abstract this study examines the supply response of the greek beef market and the possible effect of the european union s common agricultural policy cap on the greek beef sector during the period 1993 2005 a generalized autoregressive conditional heteroskedasticity garch process is used to estimate expected price and price volatility while several different symmetric asymmetric and non linear garch models are estimated the empirical results show that price volatility and feed price are important risk factors in the supply response function while the negative asymmetric price volatility that was detected implies that producers have a weak market position furthermore the empirical findings confirm that the annual premium paid by the eu to beef producers had a positive impact on the production level and also the change of the eu price support regime after 2006 is having negative effects on beef production level in greece

the firm s choice of hrm practices economics meets strategic human resource management the authors compare and contrast two theoretical approaches to explaining a firm s choice of human resource management hrm practices one from strategic human resource management shrm and the other from economics they present hrm frequency distributions depicting key empirical patterns that both theories must explain and then review and apply shrm theory to explain these patterns since no economic model has thus far explicitly considered firms choice of hrm practices the authors develop one based on standard microeconomic production theory the model yields a new theoretical construct the hrm demand curve and a new empirical estimating tool the hrm demand function together these provide an alternative explanation of hrm frequency distributions new insights on the limitations of shrm theory and the first alternative to the standard huselid type regression model using recent survey data on hrm practices at several hundred american firms the authors estimate representative hrm demand functions to illustrate the empirical implementation of the model they find that although both theoretical approaches have value the economic model seems superior in terms of generality logical coherence predictive ability and congruence with empirical data