intrinsic bubbles the case of stock prices several puzzling aspects of the behavior of united states stock prices may be explained by the presence of a specific type of rational bubble that depends exclusively on aggregate dividends the authors call bubbles of this type intrinsic bubbles because they derive all of their variability from exogenous economic fundamentals and none from extraneous factors intrinsic bubbles provide a more plausible empirical account of deviations from present value pricing than do the traditional examples of rational bubbles their explanatory potential comes partly from their ability to generate persistent deviations that appear to be relatively stable over long periods copyright 1991 by american economic association

smallholder dairying under transactions costs in east africa abstract it is argued that dairying is vital to future viability of many small farms in east africa and that high transactions costs for dairy production and marketing limit participation by asset and information poor smallholders case studies from kenya and ethiopia illustrate the role of dairy cooperatives in reducing transactions costs analysis of the determinants of producer prices received by a sample of dairy producers near addis ababa suggests that different levels of access to infrastructure assets and information explain why they contemporaneously accept widely different producer prices for fluid milk

coordination risk and cost impacts on economic development in poor rural areas this paper addresses issues relevant to a critical problem in economic development how to get rapid pro poor economic growth in poor rural areas in africa and south asia where most of the world s dollar a day poor live it examines constraints to the development of coordinated exchange systems in poor rural areas focusing on the core problem of thin markets and low density of economic activity in these areas transaction cost and risk analysis is integrated into a conventional neoclassical production economics framework to describe the existence of low level equilibrium traps in transactions and supply chains and to generate important insights for development policy

state intervention for food price stabilisation in africa can it work abstract although its arguments may have more general applicability this paper discusses the desirability and options for the stabilisation of staple food prices principally in eastern and southern africa it addresses three broad questions i why is stabilisation of food grain prices desirable ii what is technically feasible and iii can the governance and trade issues thrown up by suggested mechanisms be solved it considers a number of options for price stabilisation assessing the strengths and weaknesses of each and suggesting situations in which each may be appropriate

dividend yield and expected returns abstract previous research examining the relation between dividend yield and equity returns documents a u shaped pattern arising from the positive capm adjusted average excess return of zero dividend firms in contrast this paper reports that zero dividend firms earn negative average excess returns relative to firms of similar size despite the apparent conformity of these results to the predictions of after tax asset pricing models the negative size adjusted excess returns cannot be drive solely by tax effects these excess returns which are concentrated in the initial zero dividend years and approach 1 per month are attributed to possible dividend expectation effects rather than taxes

a policy agenda for pro poor agricultural growth abstract sub saharan africa and parts of south asia are likely to hold large numbers of very poor rural people into the foreseeable future although both history and theory suggest a pre eminent role for agricultural growth in poverty reduction in poor agrarian economies such growth today faces new difficulties many of these difficulties are endogenous to today s poor rural areas others result from broader processes of global change but some are due to changes in the dominant policy environment emphasizing liberalization and state withdrawal examination of 20th century green revolutions suggests that active state interventions were important in supporting critical stages of agricultural market development unfortunately such interventions benefits in institutional development are easily overlooked whereas their high costs are much more visible policy implications are discussed

housing bubble contagion from city centre to suburbs most previous studies have reported that housing prices diffuse from the city centre to surrounding areas however these studies have overlooked the fact that housing prices comprise fundamental and bubble prices we investigated whether bubble prices also diffuse from the city centre to suburbs and whether fundamental or bubble prices promote housing price diffusion we focused on the movement of housing bubbles from the city centre to the suburbs using data for the taipei metropolitan area from 1973 to 2014 for empirical analysis our state space model estimates statistically significant fundamental and bubble prices in taipei city city centre and new taipei city suburbs engle granger cointegration test results reveal that the housing and bubble prices of the two cities are cointegrated however fundamental prices are not f statistics reveal that the granger causality of bubble prices the central city granger causing changes in the suburbs is more significant and powerful than that of the fun

bubbles in us regional house prices evidence from house price income ratios at the state level we investigate the presence of bubbles in the us house price income ratio at the state level by applying the recent time series based econometric test to data from january 1975 to december 2014 we

the rise in house prices in china bubbles or fundamentals the dramatic rise of house prices in many cities of china has brought huge attention from both the governmental and academic circles there is a huge debate on whether the increasing house prices are driven by market fundamentals or just by speculation like levin and wright 1997a 1997b we decompose house prices in china into fundamental and non fundamental components we also consider potential nonlinear feedback from the historical growth rate of house prices on the current house prices and propose a semiparametric approach to estimate the speculative components in the model we demonstrate that the non fundamental part contributes a relatively small proportion of the rise of house prices in china su and jin thank the nsfc for research support under grant no 70501001 citation hu jianying liangjun su sainan jin and wanjun jiang 2006 the rise in house prices in china bubbles or fundamentals economics bulletin vol 3 no 7 pp 1 8 submitted march 20 2006 accepted march 28 2006 url http www economicsbulletin com 2006 volume3 eb 06c20006a pdf

competition and coordination in liberalized african cotton market systems abstract private operators now dominate input supply crop buying and ginning activities in many african cotton sectors varying levels of competition are observed but greater levels of competition are not necessarily associated with better system performance this paper explores this phenomenon drawing on the liberalization experience of ghana mozambique tanzania uganda zambia and zimbabwe while the capacity of the state to support markets remains weak there may be tradeoffs between the level of competition and the degree of coordination achieved between players within a sector different sectoral structures are observed with a different role for the state appropriate for each

listen to sraffa s silences a new interpretation of sraffa s production of commodities this paper argues that the received interpretation of sraffa s prices as classical natural prices that would prevail when the system is at the centre of gravitation cannot be retained it offers an alternative interpretation in which sraffa s prices are completely independent of demand considerations or the condition of equilibrium of demand and supply the requirement of the uniform rate of profits in sraffa s price equations is argued to be a logical consequence of the assumption that wages are uniform and fixed from outside the system the paper provides evidence from sraffa s published and unpublished writings to buttress its new interpretation it also provides answers to the major criticisms and questions raised against the new interpretation copyright oxford university press

smallholders institutional services and commercial transformation in ethiopia this article examines the role of institutional services of credit input supply and extension in the overall commercial transformation process of smallholder agriculture in ethiopia survey data collected in 2006 from 309 sample households in three districts of ethiopia are used for the analyses tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals a probit model is used to measure these effects on the adoption of improved seeds intensity of use of seeds is analyzed using an ordinary least squares model logarithmic cobb douglass functions are estimated to analyze the effect of access to services on crop productivity heckman s two stage estimation is used to examine determinants of household market participation and the extents of participation results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in ethiopia in particular appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services

rational bubbles or persistent deviations from market fundamentals abstract tests for fractional integration in the s p 500 log dividend yield are conducted in order to test the proposition that exogenous shocks have permanent effects the presence of a unit root in the log dividend yield is consistent with rational bubbles in stock prices our findings based on tests for fractional integration yield robust rejections of the null hypothesis of rational bubbles the results strongly suggest that the log dividend yield is mean reverting

options for african agriculture in an era of high food and energy prices in a world of high food and energy prices africa has an imperative to do a better job feeding itself and ensuring that its people are food secure at the same time there is a new business opportunity to work with the private sector in developing the continent s potential to produce significantly more food raw materials and biofuels for regional and world markets a challenge for african policy makers is to find the right balance between a food security and a business agenda and to ensure that the business agenda engages with large numbers of small farms agricultural development requires many things but the fundamentals for africa are developing markets increasing agricultural productivity and managing volatility this cannot happen at sufficient scale and speed without strong public sector leadership enabling policies and investments and well focused implementation strategies

a simulation based approach to the study of coefficient of variation of dividend yields abstract existing empirical studies of dividend yields and dividend policies either make no assumption or the normal distribution of the dividend yields data the statistical results will be biased because they cannot reflect the finite support set property of dividend yields which can only range from 0 to 1 we posit that the assumption that dividend yields follow a beta distribution is more appropriate the coefficient of variation cv is used to measure the stability of dividend yields if we assume dividend yields follow a normal distribution then the maximum likelihood estimate for coefficient of variation is given by s x this only gives us a point estimate which cannot depict the full picture of the sampling distribution of the coefficient of variation a simulation based approach is adopted to estimate cv under the beta distribution this approach will give us a point estimate as well as the empirical sampling distribution of cv with this approach we study the stability of dividend yields of the hang seng index and its sub indexes of the hong kong stock market and compare the results with the traditional approach

the rise of large farms in land abundant countries do they have a future increased levels and volatility of food prices has led to a surge of interest in large scale agriculture and land acquisition this creates challenges for policy makers aiming to establish a policy environment conducive to an agrarian structure to contribute to broad based development in the long term based on a historical review of episodes of growth of large farms and their impact this paper identifies factors underlying the dominance of owner operated farm structures and ways in which these may change with development the amount of land that could potentially be available for expansion and the level of productivity in exploiting available land resources are used to establish a country level typology the authors highlight that an assessment of the advantages of large operations together with information on endowments can provide input into strategy formulation at the country level a review of recent cases of land acquisition reinforces the importance of the policy framework in determining outcomes it suggests that transparency and contract enforcement recognition of local land rights and ways in which they can be exercised attention to employment effects and technical viability and mechanisms to re allocate land from unsuccessful ventures to more productive entrepreneurs are key areas warranting the attention of policy makers

speculative bubble spillovers across regional housing markets in this paper we determine whether speculative bubbles in one region in the united states can lead bubbles to form in others we first apply a regime switching model to determine whether speculative bubbles existed in the u s regional residential real estate markets our findings suggest that the housing markets in five of the nine census divisions investigated were characterized by speculative bubbles we then examine the extent to which bubbles spill over between neighboring and more distant regions finding that the transmission of speculative bubbles and nonfundamentals between regions is multidirectional and does not depend on contiguity or distance

are housing bubbles contagious a case study of las vegas and los angeles home prices this paper asks whether speculative house price pressure in an economic center can spill into related housing markets in other words are bubbles contagious i develop a theoretical model that allows for speculative price appreciation to spread from one market to another i estimate an error correction model using quarterly housing data for las vegas and los angeles and fundamental market variables from 1978 quarter 2 through 2008 quarter 1 las vegas prices show significant persistence and adjust slowly to disequilibrium contagious price and income growth from the los angeles market sustained by naive expectations contributed to the bubble that formed in las vegas

a new approach to estimating value income ratios with income growth and time varying yields abstract value income ratios such as dividend yields in finance and price rent ratios in housing and real estate markets impact society in a variety of ways this paper proposes a new type of the present value model that features income growth with time varying yields it offers a new risk perspective which may alleviate timid investor behavior in market downturns while cooling down the market in seemingly booming times a binding relationship the value income ratio adjusted by yields of the asset and growth in income is revealed this has notable implications for empirical research which examines value income ratios time and again incorrectly perceived market behavior distorts the formation of investor behavior and vice versa which has serious consequences to the functioning of the market and beyond

cash cropping and food crop productivity synergies or trade offs the case for promoting export oriented cash crops in africa has generally been based on their direct potential contribution to agricultural productivity and small farmer incomes a relatively neglected avenue of research concerns the synergistic effects that cash cropping can have on other household activities including food production the conventional view that cash crops compete with food crops for land and labour neglects the potential for cash crop schemes to make available inputs on credit management training and other resources that can contribute to food crop productivity which might otherwise not be accessible to farmers if they did not participate in cash crop programs this article builds on previous research by hypothesising key pathways by which cash crops may affect food crop activities and empirically measuring these effects using the case of cotton in gokwe north district in zimbabwe analysis is based on instrumental variable analysis of survey data on 430 rural households in 1996 results indicate that after controlling for household assets education and locational differences households engaging intensively in cotton production obtain higher grain yields than non cotton and marginal cotton producers we also find evidence of regional spill over effects whereby commercialisation schemes induce second round investments in a particular area that provide benefits to all farmers in that region regardless of whether they engage in that commercialisation scheme the study suggests that the potential spill over benefits for food crops through participation in cash crop programs are important to consider in the development of strategies designed to intensify african food crop production

the price dividend ratio and limits to arbitrage evidence from a time varying estr model abstract recent share price dynamics has led to much debate within academic and practitioner circles researchers have typically argued that either a bubble component exists within prices or that the price dividend relationship exhibits persistence this note shows that an empirical model designed to capture limits to arbitrage can explain the movement in prices over the recent past

maize is life malawi s delayed green revolution abstract the pattern of maize seed development in malawi demonstrates the importance of farmers capacity to articulate their interests through collective action and institutions despite the vital significance of maize as a wage good in malawi limited effective demand for maize seed research prolonged the period of technical stagnation analysis of the institutional factors shaping the demand for maize seed research complements previous work on malawi s political economy the supply of seed technology and adoption with implications for current political changes in that nation the importance of farmers organizations and state commitment to agricultural research in sub saharan africa

false promise or false premise the experience of food and input market reform in eastern and southern africa abstract the literature on the effects of agricultural market reform in africa is sharply divided and inconsistent this article attempts to reconcile opposing viewpoints on the effects of food and input market policy reform in eastern and southern africa drawing from studies of ethiopia kenya malawi zambia and zimbabwe we argue that a major source of the controversy stems from assumptions that countries have actually moved to a liberalized market environment we find that many of the most fundamental elements of the reform programs either remain unimplemented were reversed within several years or were implemented in such a way as to negate private sector investment incentives a framework is developed for explaining why some countries have been able to liberalize their food and fertilizer markets while others have not these findings have implications for how donor assistance and policy oriented research can more constructively contribute to an improved policy environment

a test for rational bubbles in the nasdaq stock index a fractionally integrated approach abstract in this paper we test for the presence of rational bubbles in the nasdaq stock market index over the period 1994 06 2003 11 by means of a methodology based on fractional processes the results suggest that the existence of bubbles depends on the sampling frequency used in the analysis we cannot reject the unit root hypothesis when using monthly data on price dividend ratios which according to the present value model suggests the existence of rational bubbles however we reject this hypothesis in favor of fractional alternatives when using daily and weekly data this might be explained by the temporal aggregation and or the sample sizes used in the application

economic incentives and natural resource management among small scale farmers addressing the missing link small scale farmers face numerous challenges to invest in natural resource management practices the problems are interlinked with such perverse economic problems as high transaction costs and risk rooted in the lack of comprehensive institutional and organizational services to farmers for risk reduction and incentive creation failure to address such a missing link undermines success in natural resource management this paper ponders the importance of such a missing link and proposes analytic framework that explicitly integrates the economics of natural resource management into institutional and organizational analysis the framework features the instrumentality of integrated institutional and organizational innovation to create opportunities and incentives to small scale farmers to encourage investment in natural resource management practices

synchronisation and commonalities in metropolitan housing market cycles this paper examines the degree of commonalities present in the cyclical behaviour of the eight largest metropolitan housing markets in australia using two techniques originally proposed in the business cycle literature we firstly consider the degree of synchronisation present and secondly decompose the series into their permanent and cyclical components both empirical approaches reveal similar results sydney and melbourne are closely related to each other and are relatively segmented from the smaller metropolitan areas in contrast there is substantial evidence of commonalities in the cyclical behaviour of the remaining cities especially those on the eastern and southern coasts of australia

the future of small farms new directions for services institutions and intermediation summary efficient pre and post harvest services are essential if small farms in high potential areas are to intensify production contribute to economic growth and reduce poverty they also matter if small farms in marginal areas are to manage their natural resource base in the face of growing population pressure and climate change difficulties that smallholders face in accessing services are reviewed showing how incentives for commercial delivery of services to smallholders differ between staple food traditional cash crop and high value product supply chains the major challenge in service delivery to smallholders in much of africa concerns coordination of service development and delivery different forms of intermediary institution for achieving such coordination are examined

seasonality and cointegration of regional house prices in the uk the data generation process underlying regional house prices in the uk is investigated using new statistical tests it is found that causal flows tend to be northwards the south east rather than greater london acts as an exogenous price determinator of the other regions in the south the midland regions have a great influence on prices in the north and flows through the east midlands are characterised by bi directional causality these results are largely independent of assumptions made about the data generation process and tests of these assumptions have low power in any case there are also similarities between this causality and migration patterns particularly in the south of england

on the present state of the capital controversy the post war capital controversy seems to have had two distinguishable stages thanks to the unambiguous phenomena of reswitching and reverse capital deepening the first stage was conclusive in discarding from pure theory the traditional versions of neoclassical theory that relied on the notion of capital as a single quantity subsequently however when the implications of those phenomena took centre stage in the controversy together with the reformulations of the theory which intended to do away with the quantity of capital several misunderstandings prevented i shall contend decisive progress in the analysis and we entered an inconclusive phase of the discussion