poverty effects of food price escalation the importance of substitution effects in mexican households abstract recent food price increases reportedly caused significant numbers of households to fall into poverty particularly in the developing world most research into the welfare effects of these food price changes assumes constant demand or approximates second order substitution effects poverty forecasts with these assumptions may overestimate or underestimate the effect of food price increases in a nation where most households consume diverse food baskets we account for full substitution by calculating a theoretically consistent food demand system accounting for household responses to food price changes by decreasing some food purchases and increasing other food purchases we use mexican data to confirm the mitigation of adverse welfare effects from food price increases after accounting for country specific dietary preferences in modeling demand in comparison to previous literature our welfare measures predict theoretically consistent numbers of mexican households entering poverty due to recent food price changes

commodity prices trade and poverty in uruguay abstract the 2006 2008 food price spike raised concerns about the impact of high commodity prices on poverty in developing countries this paper addresses these concerns in relation to uruguay a small country that exports agricultural commodities and imports fuels applying a general equilibrium model we find that as a whole an increase in commodity prices has a positive effect on the economy of uruguay benefits obtained through a growth in export activities are partially outweighed by an increase in crude oil prices in this context extreme poverty increases as in other countries the increase in food prices affects the already poor population who become even poorer this fact highlights the need for policies that mitigate the negative effects of price shocks

cyclical and causal relations between real wages and employment in the eu this paper analyses and compares the joint behaviour of real wages and employment over the business cycle in the european union eu economies using both annual and quarterly data since 1960 further investigation of the cointegrating properties and the existence of causal effects in the real wage employment relation is undertaken by employing appropriate var models the evidence suggests weak procyclical or acyclic behaviour of real wages relative to cyclical employment in the quarterly data and stronger procyclicality in the annual data thus confirming the dunlop tarshis result for the majority of the eu economies with a few exceptions no cointegrating relations were detected while the granger causality tests suggest either weak or lack of unidirectional causality finally the sensitivity analysis showed that the filtering method has not much influence on the results but the choice of deflator may overturn them in certain cases

on the transmission of world agricultural prices two questions are asked about the relationship between domestic prices and world prices of agricultural commodities are variations in world prices transmitted to domestic prices domestic prices are regressed on world prices in various forms taking into account the possible effects of exchange rates and inflation the empirical analysis is based on data from the food and agriculture organization of the united nations for 58 countries from 1968 78 and for the countries of the european community from 1961 85 the results show that most of the variations in world prices are transmitted and that they constitute the dominant component in the variations of domestic prices

dalton improving indirect tax reform a tax reform is dalton improving if it improves social welfare for all possible social welfare functions that conform to hugh dalton s principle of transfers according to this principle there exists a prior social ranking of households and a transfer is approved if it it distributes from high ranking rich to low ranking poor households without altering the ranking itself in this paper the authors develop a procedure for identifying marginal dalton improving reforms in the context of indirect taxation the methodology is illustrated using data on excise taxes in the united kingdom copyright 1995 by american economic association

markov switching causality and the money output relationship the causal link between monetary variables and output is one of the most studied issues in macroeconomics one puzzle from this literature is that the results of causality tests appear to be sensitive with respect to the sample period that one considers as a way of overcoming this difficulty we propose a method for analysing granger causality which is based on a vector autoregressive model with time varying parameters we model parameter time variation so as to reflect changes in granger causality and assume that these changes are stochastic and governed by an unobservable markov chain when applied to us data our methodology allows us to reconcile previous puzzling differences in the outcome of conventional tests for money output causality

a cross country comparison of rural income generating activities summary this paper uses a newly constructed cross country database composed of comparable income aggregates to examine the full range of income generating activities carried out by rural households the analysis paints a clear picture of multiple activities across rural space in countries on all four continents though less so in the included african countries for most countries the largest share of income stems from off farm activities and the largest share of households has diversified sources of income diversification not specialization is the norm nevertheless agricultural sources of income remain critically important for rural livelihoods in all countries

farm productivity and rural poverty in india armed with new data we return to an old question from the pages of this journal to what extent do india s rural poor share in agricultural growth combining data from 24 household sample surveys spanning 35 years with other sources we estimate a model of the joint determination of consumption poverty measures agricultural wages and food prices we find that higher farm productivity brought both absolute and relative gains to poor rural households a large share of the gains was via wages and prices though these effects took time the benefits to the poor were not confined to those near the poverty line

does money matter in canada evidence from a vector error correction model this paper investigates the statistical properties of a set of canadian and u s economic time series and uses the data to address the question of the importance of monetary variables in canadian business cycle fluctuations the individual time series are found to contain unit roots but the data reveal the existence of several economically meaningful cointegrating vectors a multivariate vector error correction model is estimated and canadian velocity which appears as an error correction term is significant in the canadian output equation this supports the contention that monetary variables have predictive content for real output copyright 1989 by mit press

reconsidering the role of money for output prices and interest rates abstract new keynesian models of monetary policy downplay the role of monetary aggregates in the sense that the level of output prices and interest rates can be determined without knowledge of the quantity of money this paper evaluates the empirical validity of this prediction by studying the effects of shocks to monetary aggregates using a vector autoregression var shocks to monetary aggregates are identified by the restrictions suggested by new keynesian monetary models contrary to the theoretical predictions shocks to broad monetary aggregates have substantial and persistent effects on output prices and interest rates

lag length selection and tests of granger causality between money and income one of the most widely accepred relationships in macroeconomics is the positive relationship between the rate of growth of the money supply and the rate of growth of income a diversity of opinion arises however with the attempt to identify a causal relationship between these variables while friedman and schwartz 1963 initiated the empirical investigation of money income causality sims 1972 made the most significant contribution to this literature with a practical application of the criterion developed by granger 1969 for identifying a causal relationship since the appearance of sims s approach and an alternative one advanced by sargent 1976 many researchers have applied these techniques to the investigation of the causal relationship between money and income l with two exceptions hsiao 1981 and mcmillin and fackler 1984 these researchers have arbitrarily chosen the lengths of their distributed lags the purpose of this paper is to test for granger causality between money and income this paper differs from previous work in that considerably more attention is focused on the effect of the lag specification on the test results in particular we investigate the extent to which rules of thumb arbitrary lag specifications and

quality quantity and spatial variation of price this paper develops and implements a method for estimating price elasticities of demand using cross sectional household survey data geographically clustered households report unit values which when corrected for quality effects and for measurement error indicate the underlying spatial variation in prices and can be matched to variation in demand patterns a simple model of quality choice is proposed while the correction for measurement error exploits the clustered design of such surveys data from a 1979 household survey from the ivory coast are used to estimate price elasticities for beef meat fish cereals and starches copyright 1988 by american economic association

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

monitoring global and national food price crises this paper develops calibrates and runs a new food price crisis monitoring framework the proposed framework has an integrated approach to capture global and national vulnerabilities and offers an alternative to existing food insecurity information systems which suffer from a lack of consensus on the definition of food crisis the framework successfully identifies the recent episodes of food price crises in 2008 2011 and 2012 this paper also recommends ways in which the framework could be refined to increase country coverage and provide better information on country level food inflation

the conventional treatment of seasonality in business cycle analysis does it create distortions abstract no so says one model that is broadly consistent with postwar u s seasonal and business cycle data

understanding the impact of high food prices in latin america since the late 1980s almost all latin american countries have adopted a series of far reaching economic reforms especially trade financial and capital account liberalization increased economic openness has gone hand in hand with large financial inflows particularly in the first half of the 1990s and has brought new sources of economic growth as a result economies grew inflation declined and there was a big surge in foreign cap ital inflows although overall growth slowed after 1995 the region has expe rienced strong growth in the past five years the best sustained performance since the 1970s with the exception of a handful of countries this economic growth has been accompanied by relatively modest inflation despite these positive results virtually all latin american countries share similar problems uneven economic growth unacceptably high poverty and malnutrition rates and lagging agricultural growth more than 60 percent of the region s poor live in rural areas where slow economic growth unequal distribution of assets inadequate public investment and public services and vulnerability to natural and economic shocks are major policy issues the 2007 08 food price crisis exacerbated these problems prior to the cri sis the region was considered relatively stable and capable of absorbing exter nal shocks thanks to its higher foreign exchange liquidity decreased public sector and external borrowing needs exchange rate flexibility lower exposure to currency interest rate and rollover risks in public sector debt portfolios and improved access to local currency loans nevertheless the food price cri sis severely affected most of the latin american countries in terms of inflation especially food inflation

maize of the ancestors and modern varieties the microeconomics of high yielding variety adoption in malawi farmer adoption of seed fertilizer technology can be characterized in terms of several interrelated choices one choice is whether to adopt only seed only fertilizer or both components of the technology adoption another choice relates to the extent of land allocation to modem and to farmers seed varieties extent of adoption a third choice is the level per hectare of either seed or fertilizer or both intensity of adoption 1 in the literature about agricultural innovations in developing countries some theoretical models treat more than one aspect of the adoption decision 2 but most econometric approaches have portrayed only the discrete adoption choice for a single input although farmers often adopt parts or components of recommended technology neither the theoretical nor the econometric models have included the level of fertilizer applied to farmers varieties in the analysis of seed fertilizer adoption 3 two features of the seed fertilizer adoption decision as defined above are particularly evident in malawi first even when farmers adopt hybrid maize they continue to allocate a part of their maize area to their own varieties microeconomic theory provides four explanations for land allocation to both modern and traditional seed variet

money output and the expected real interest rate this paper tests the exclusion of lagged growth rates of money and output from regression equations with serially correlated disturbances for the expected real interest rate the authors empirical approach is an extension of the empirical strategies of eugene f fama 1975 and frederic s mishkin 1981 which invoke the orthogonality of the inflation forecast error to predetermined regressors under the maintained hypothesis of rational expectations they discuss the implications of their tests for simple real business cycle models copyright 1991 by mit press

rural livelihood diversification in sub saharan africa a literature review abstractthis article provides a comprehensive review of the literature on the nature and evolution of rural livelihood diversification in sub saharan africa and the situation regarding smallholders it reveals mixed findings about the causes and consequences of livelihood diversification on rural smallholders adopting this strategy a lot of evidence from the literature suggests that it is relatively better off smallholders with sufficient assets who achieve successful livelihood diversification mainly by exploiting opportunities and synergies between farm and nonfarm activities because of asset constraints increase in incomes and wealth based on livelihood diversification has not yet benefitted the large majority of smallholders

money does granger cause output in the bivariate money output relation abstract a bivariate granger causality test on money and output finds statistically significant causality when data are measured in log levels but not when they are measured in first differences of the logs bootstrap simulation experiments indicate that most probably the first difference results reflect lack of power whereas the level results reflect granger causality that is actually in the data the reason for the lack of power in the first difference f statistic is that first differencing the data appears to entail a specification error by showing that money does granger cause output in the bivariate relation we remove a potential embarrassment for models that assign an important role to money in business fluctuations

breaking trends and the money output correlation this paper examines the impact on the money output correla tion of a univariate specification that allows time series to be characterized as stationary around a broken trend function though pretesting suggests that u s real output industrial production can be described as broken trend stationary this result has only limited impact on the money output correlation before 1985 there is a strong granger causal relationship between money and broken detrended output but not first differenced output even when different short term interest rates are used as regres sors however after 1985 this relationship weakens significantly whether or not one determines that output has a unit root

money market mutual fund maturity and interest rates the average maturity of money market mutual funds ranged from twenty nine to fifty three days during 1982 through 1990 according to the popular press changes in this time series provide interest rate forecasts the hypothesis is that fund managers lengthen their maturities when interest rates will be falling while the maturities are shortened when rate increases are imminent granger causality tests reject this hypothesis however there is a causal relation in the opposite direction interest rates granger cause average fund maturity indicating that on average fund managers respond to past rate changes copyright 1992 by ohio state university press

the heterogeneous effect of shocks on agricultural innovations adoption microeconometric evidence from rural ethiopia abstract theoretically the relationship between shocks and agricultural innovation adoption could be ambiguous while shocks could lower the competence and capacity of households to adopt new agricultural innovations households can also take up agricultural innovations as a coping mechanism against the different shocks they face using a nationally representative household data from ethiopia of the living standards measurement study integrated surveys on agriculture lsms isa of the world bank this paper analyzes the effect of idiosyncratic and covariate shocks on adoption of different agricultural innovations assuming interdependence among the innovations we find shocks to have heterogeneous effects on the adoption of agricultural innovations specifically production and health shocks have negative effects on the adoption of high cost innovations such as improved seeds chemical fertilizer and irrigation however production shocks are positively associated with low cost innovations such as organic fertilizer to enhance farmers adoption of agricultural innovations especially high cost innovations there is a greater need towards the design of policies and interventions that would reduce household s exposure to production and health shocks

resource degradation low agricultural productivity and poverty in sub saharan africa pathways out of the spiral sub saharan africa ssa has the lowest agricultural productivity in the world while almost half of the population lives below us 1 per day the biggest development policy challenge is to find appropriate solutions to end hunger and poverty in the region building on several years of empirical research conducted in east africa this paper identifies potential strategies for sustainable development in this region in general the empirical evidence reviewed confirms that different strategies are needed in different development domains of ssa nevertheless some elements will be common to all successful strategies including assurance of peace and security a stable macroeconomic environment provision of incentives through markets where markets function development of market institutions where they do not and public and private investment in an appropriate mix of physical human natural and social capital the differences in strategies across these domains mainly reflect differences in the mix of those investments as influenced by different comparative advantages

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

money output granger causality revisited an empirical analysis of eu countries in this paper the evidence collected in the large literature on testing for granger causality from money to output is revisited using a broad data base of 14 eu countries plus canada the us and japan and quarterly data from the mid 1960s to mid 1990s a number of hypotheses from this literature is evaluated it is found that very few general conclusions can be sustained for instance in most countries it is not the case that the use of data in levels creates a bias in favour of finding granger causality effects of money on output compared to using differences neither does the significance of money lags decline when increasing the number of variables included in the model what appears to be robust though is that allowing for asymmetries clearly increases the likelihood of finding significant causality effects based on the granger causality test results a number of country groups are obtained using cluster analysis which are characterized by a similarly behaviour with respect to the money output

the dynamic effects of forward guidance shocks we examine the macroeconomic effects of forward guidance shocks at the zero lower bound empirically we identify forward guidance shocks using unexpected changes in futures contracts around moneta

the theory of reform and indian indirect taxes abstract given a set of value judgements an initial state and a model of the economy one can ask whether some feasible tax change would increase welfare we do this by defining the marginal cost in terms of welfare of raising an extra rupee from the i th good the inverse optimum problem is the calculation of non negative welfare weights on households which imply that the initial state is optimum if no such welfare weights exist then a pareto improvement is possible we illustrate the concepts and results using data from the indian economy for 1979 1980 directions of tax reform for a number of specific social welfare functions and for pareto improvements are presented

the accuracy of interest rate forecasts in the asia pacific region opportunities for portfolio management we analysed interest rate forecasts from australia china hong kong india indonesia malaysia new zealand singapore south korea taiwan and thailand we assessed 532 forecast time series with

financial market variables do not predict real activity i introduction the past decade has seen an extensive empirical reassessment of the information content of financial market variables believed to be sensitive to monetary policy particularly provocative are papers suggesting that some interest rates and interest rate spreads contain more information about economic activity than monetary aggregates this paper reviews important methodological pitfalls in these studies we then show that none of the commonly employed indicators of monetary policy contain incremental information useful in forecasting real economic activity as measured by industrial production two conclusions are possible either monetary policy innovations have no significant real effects or we collectively have failed in our efforts to measure monetary policy the money income causality literature spawned by christopher sims in the 1970s has broadened in recent years to encompass a diverse set of measures of monetary policy more comprehensive and sophisticated empirical assessment strategies and a richer array of explanations for observed correlations between financial market variables and economic activity early contributors to this literature such as stock and watson 1989 friedman and kuttner 1992 and bernanke and blinder 1992 present evidence that particular interest rates and spreads not only dominate monetary aggregates as predictors of economic performance but are remarkably powerful predictors stock and watson 1989 and friedman and kuttner 1992 demonstrate that the spread between the interest rates on commercial paper and treasury bills is highly significant in explaining movements in real activity while bernanke and blinder 1992 made an equally convincing case for the federal funds rate these conclusions are qualified however in subsequent work both bernanke 1990 and stock and watson 1993 for example point out that the predictive power of the paper bill spread and interest rates more generally weakened during the second half of the 1980s and the early 1990s the results reported in these and related papers form the empirical core of the debate over the relative merits of various interest rates spreads and monetary aggregates as indicators of the stance of monetary policy subsequent empirical work has seen a shift from atheoretical to structural vector autoregressions strongin 1992 gordon and leeper 1994 and bernanke and mihov 1995 for example focus on more refined measures of monetary policy derived from explicit models of the reserve market and central bank operating procedures these papers address concerns that go beyond discriminating among variables on the basis of predictive power they grapple directly with the fundamentally difficult issue of identifying monetary policy shocks by positing and estimating structural models that take the form of identified vars the usefulness of these efforts as well as earlier efforts to measure monetary policy is in turn questioned by rudebusch 1996 who finds that the studies econometric results are fragile and at odds with other evidence on the nature of the fed s reaction function and monetary policy surprises the first part of our paper illustrates some of the methodological pitfalls common in the literature cited above and complements recent work by bernanke 1990 hess and porter 1993 thoma and gray 1995 rudebusch 1996 and emery 1996 we begin by demonstrating the advantages of rolling recursive regression techniques that directly and comprehensively address the question of sample sensitivity these techniques are used to illustrate the extreme sensitivity to sample period of the causality statistics and variance decompositions commonly used to assess the explanatory power of financial market variables indeed in the applications under review here such in sample measures of fit are sometimes heavily influenced by individual monthly observations

money and output viewed through a rolling window abstract we examine the extent to which fluctuations in the money stock anticipate or granger cause fluctuations in real output using a variety of rolling window and increasing window estimation techniques various models are considered using simple sum as well as divisia measures of m 1 and m 2 income prices and both the t bill rate and the commercial paper rate findings indicate that the relation between income money prices and interest rates is stable as long as sufficient data are used and that there is cointegration among the variables considered although cointegration spaces become very difficult to estimate precisely when smaller windows of data are used further both m 1 and m 2 are shown to be important predictors of income for the entire period from 1960 2 1996 3 based on modified versions of what we term the most damaging specifications from friedman and kuttner 1993 and thoma 1994 our new evidence is based in part on a rather novel model selection approach to examining the relationship between money and income 1998 elsevier science b v all rights reserved

causality and correlations of output and nominal variables in a real business cycle model abstract a dynamic general equilibrium economy in which output is exogenous with respect to money is calibrated and simulated following a procedure commonly used in the real business cycle literature it is then confronted with key comovement patterns of output and nominal variables in post war u s time series data the model economy performs well in matching second moment patterns involving output money and price the model economy with its embedded reverse causation from output to money also provides the means for carrying out a probabilistic appraisal of the observed money to output granger causality in u s data repeated applications of the granger causality test to simulated data lead to the rinding that money causes output more often than expected

identifying a distinctive competence forecasting ability in the money fund industry testing the causal link between a firm specific competence and its antecedents or consequences has become a key objective for strategy research over the past decade on one hand case studies can identify a competence but with their small sample size their retrospective research design and their tendency toward sampling on the dependent variable they can not reliably test the causal connection between a competence and its antecedents or its consequences on the other hand variance decomposition studies demonstrate the existence of firm specific performance differentials but have not identified which particular competencies are responsible for them the present paper avoids both of these problems by measuring a particular competence across a large sample of organizations over a long period of time so that a test of statistical causality can be applied to the relationship of this competence to both its antecedents and its consequences the particular competence studied is the ability of money market mutual funds to forecast changes in short term interest rates a competence known from prior research to be both valuable and rare in particular we test the effect of forecasting ability on the economic surplus generated by the fund and its growth conversely we also test the effect of growth on the subsequent development of forecasting ability copyright 2000 john wiley sons ltd

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 effects of rising food prices on poverty in mexico we evaluate the impact of the rise in food prices during 2006 2008 on the poverty and extreme poverty rates in mexico we concentrate on the poor s consumption of staple foods and analyze the change in their consumption brought about by changed prices we also allow households receiving income from the farming and livestock sector to benefit from increases in prices of food products we find a modest increase in poverty using 2006 2007 prices however there is a daunting effect on the poor once the 2008 prices are taken into account after considering the positive effects of public policies announced in 2008 such as reduced taxes and tariffs on food products and greater subsidies to the extremely poor the poverty rate measured through consumption increases from 25 to 33 5 and the extreme poverty rate from 10 58 to 16 given the increase in food prices further analysis using the theory of optimal taxes suggests policies oriented towards relieving the food price pressure on the mexican poor should aim at lowering the prices of eggs vegetable oil milk and chicken

yield gap based poverty gaps in rural sub saharan africa summary given africa s challenge of feeding a growing population narrowing yield gaps is an efficient way of raising production under covariate constraints using household panel data from 21 regions in eight sub saharan african countries this article unravels the determinants of yield gaps it also tests the hypothesis that poverty gaps are increasing with yield gaps the results suggest that yield gaps are increasing with cultivated area that yield differences are reducing with fertilizer use particularly when combined with improved seeds in low production potential regions that poverty gaps are increasing with yield gaps particularly in low production potential regions

the panel study of income dynamics after fourteen years an evaluation this article considers the representativeness of the panel study of income dynamics psid over its 14 year history from 1968 to 1981 given the dynamics of entry and exit from the panel by 1981 40 of the original members had left the sample and were replaced by new entrants who joined either existing households or new households being formed by members of the original sample we consider the distribution of demographic characteristics and earnings equations over time and we compare the psid with the current population survey cps by either approach we find little evidence that the psid has become unrepresentative

efficient tests of long run causation in trivariate var processes with a rolling window study of the money income relationship this paper develops a simple sequential multiple horizon non causation test strategy for trivariate var models with one auxiliary variable we apply the test strategy to a rolling window study of money supply and real income with the price of oil the unemployment rate and the spread between the treasury bill and commercial paper rates as auxiliary processes ours is the first study to control simultaneously for common stochastic trends sensi tivity of causality tests to chosen sample period null hypothesis over rejection sequential test size bounds and the possibility of causal delays evidence sug gests highly significant direct or indirect causality from m1 to real income in particular through the unemployment rate and m2 once we control for cointe gration

an analysis of sample attrition in panel data the michigan panel study of income dynamics by 1989 the michigan panel study on income dynamics psid had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership we study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the estimates of several sets of regression coefficients we provide a statistical framework for conducting tests for attrition bias that draws a sharp distinction between selection on unobservables and on observables and that shows that weighted least squares can generate consistent parameter estimates when selection is based on observables even when they are endogenous our empirical analysis shows that attrition is highly selective and is concentrated among lower socioeconomic status individuals we also show that attrition is concentrated among those with more unstable earnings marriage and migration histories nevertheless we find that these variables explain very little of the attrition in the sample and that the selection that occurs is moderated by regression to the mean effects from selection on transitory components that fade over time consequently despite the large amount of attrition we find no strong evidence that attrition has seriously distorted the representativeness of the psid through 1989 and considerable evidence that its cross sectional representativeness has remained roughly intact

understanding poverty in cash crop agro forestry systems evidence from ghana and ethiopia this paper examines the linkages between cash crop income and other dimensions of poverty to interrogate assumptions regarding the relationship between agricultural income and poverty alleviation the analysis treats poverty as a multi dimensional and socially disaggregated phenomenon the paper employs a mixed methods approach to case studies of ghana and ethiopia to explore two critical issues first how income from cash crops is linked with other dimensions of poverty second how income and land are socially disaggregated the paper then draws on qualitative data to critically reflect on how poverty is understood within studied communities the results show that some but not all indicators of poverty vary across income quartiles and that significant differences exist across social groups the analysis suggests that although cash crops are essential focusing on increasing income from cash crops will not necessarily have a predictable or progressive impact on wellbeing furthermore the analysis highlights how contextual factors such as the provision of communal services the nature of land holdings and the quality of local governance mediate the potential poverty alleviating outcomes of income increases future development of sustainable intensification strategies should focus on the prevalence of trade offs and the fundamental social relations underpinning poverty dynamics

do conditional cash transfers reduce household vulnerability evidence from progresa oportunidades in the 2000s abstract a number of researchers and policymakers have revealed the short and medium term impacts of conditional cash transfer cct programs however accumulation of full scale evaluations of their long term impact is ongoing to contribute to filling the gap this study empirically examines the vulnerability of rural households in mexico and how cct has recently impacted them using two mexican rural household panel datasets from the 2000s i adopt kurosaki s 2006 version of townsend s 1994 risk sharing model with instrumental variable methods which enables a greater focus on household welfare decline the empirical results confirm that cct played a certain role in reducing household vulnerability in the 2000s however considering the situation after the global crisis in 2008 and the exact mechanism through which this occurs remains subject to further examination

are there lessons for africa from china s success against poverty at the outset of china s reform period the country had a far higher poverty rate than for africa as a whole within five years that was no longer true this paper tries to explain how china escaped from a situation in which extreme poverty persisted due to failed and unpopular policies while acknowledging that africa faces constraints that china did not and that context matters two lessons stand out the first is the importance of productivity growth in smallholder agriculture which will require both market based incentives and public support the second is the role played by strong leadership and a capable public administration at all levels of government

rural nonfarm employment and farming household level linkages this article introduces the articles in agricultural economics vol 40 no 2 march 2009 first we introduce their objectives in a brief review of existing literature on developing country trends in rural income diversification in particular rural nonfarm employment rnfe and its impact on farm technology choice in crops and livestock and thus on agricultural modernization and diversification then we preview the key points of the articles which use distinctive primary datasets from albania bulgaria china india mexico nigeria the philippines senegal and vietnam to document the impacts of rnfe and their implications for farm technology and farm activity

does money still matter for u s output abstract in this note we use an out of sample approach to investigate whether money growth granger causes output growth in the united states we find that after the great moderation the granger causal role of money appears to have vanished completely

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

improving the efficiency targeting of malawi s farm input subsidy programme big pain small gain abstract the farm input subsidy programme fisp in malawi was introduced in the 2005 2006 season against a background of bad weather affecting production and prolonged food shortages vouchers are distributed empowering eligible farmers to exchange them for fixed quantities of inputs at subsidized prices since its inception there has been a debate at national level about whether the fisp s potential has been fully exploited with policy makers exploring options to improve the programme proposals include targeting efficient and productive farmers to maximize returns in this paper we evaluate the effectiveness of these proposed changes to the existing fisp design by utilizing two waves of the lsms isa survey merged with climatic data we estimate how the national demand for agricultural inputs varies according to a variation in the targeting criteria by means of a two stage demand system then we identify more efficient farmers by means of a stochastic frontier approach we observe a mismatch between voucher recipients and efficiency with approximately 60 of vouchers being allocated to the three bottom quintiles of efficiency this mismatch is observed also at the spatial level with more vouchers going to districts characterized by less efficient production while concerns on the distributional impacts of the new criteria are discussed together with some suggestions for spatially diversifying the structuring of the policy and incentivizing crop diversification our results highlight a high substitutability of commercial with subsidized inputs by new eligible farmers consequently simulating the targeting policy variation we obtain an outcome that would lead only to a limited increases in predicted food expenditure ranging from 0 27 to 0 8 and maize production from 0 2 to 1 3 scope for analysing different adjustments in the functioning of fisp are thus proposed to policy makers

larger crises cost more impact of banking sector instability on output growth we propose a method for calculating the macroeconomic costs of banking crises that controls for the downward impact of recessions on banking activity in contrast to earlier research we estimate the cost of crises based on the size of banking crises the extent of a crisis is measured using banking sector aggregates the results based on our method and data from over 100 banking crises suggest that the size of a crisis matters for economic growth lower credit deposit and money growth during crises cause gdp growth to decline

more evidence on the money output relationship i introduction the empirical relationship between money and real output continues to produce conflicting evidence stock and watson 1989 using monthly u s data for the period 1960 85 report that while actual money growth m1 does not granger cause the growth of industrial production its detrended component does krol and ohanian 1990 internationalize stock and watson s study and find that both actual and detrended ml growth granger cause output growth in the u k but that neither series affects output growth in japan canada and germany friedman and kuttner 1992a 1992b 1993 question the role of money in explaining output behavior they report 1993 that even though the stock watson specification is used simply updating the sample through 1990 yields the result that detrended m1 growth no longer explains output growth friedman and kuttner also argue that the commercial paper rate or the spread between the three month treasury bill and the commercial paper rate provides a better gauge for output s reaction to monetary policy changes replacing the treasury bill rate used by stock and watson with the commercial paper rate or the spread friedman and kuttner find that m1 growth has no marginal explanatory power over output a feature of recent investigations of the money output link is the general use of a var specification based on the presumption that the series are difference stationary e g feldstein and stock 1994 several recent studies however have questioned this presumption due to the low power of unit root tests dejong et al 1992 dejong 1992 dejong and whiteman 1991a 1991b and rudebusch 1993 these studies suggest that it is difficult to distinguish between difference stationary as the null and trend stationary as the alternative hypothesis given the uncertainty about the existence of a unit root in economic time series we re examine the money output relation by specifically considering the affect of assuming that the series are trend stationary or difference stationary such an investigation is important to determine if permanent temporary changes in money and other series create permanent temporary shifts in real output for example if real output and money contain a unit root i e they are best represented by the difference stationary model permanent money shocks may produce permanent shifts in output put another way permanent money shocks may have a long run impact because they affect the stochastic trend component of output and thus change the output level for all future horizons on the other hand if output and other series are represented by a trend stationary model fluctuations around a trend level of these series are stationary mean reverting under this model a transitory money shock may only have a short run impact on output as it quickly returns to its trend level to analyze the sensitivity of results to different stationarity assumptions used we estimate two var systems one system uses the log levels of the variables along with a deterministic time trend the other uses the log difference of the series and excludes the trend term the first system represents the trend stationary specification and the second one represents the difference stationary specification there is some evidence that the money output link may be sensitive to the presence of a deterministic trend term e g eichenbaum and singleton 1986 stock and watson 1989 even so our study provides a direct comparison based on identical data sets of the effects that the two different stationarity specifications have on the money output results while testing the robustness of the money output connection is our main focus we also provide some different perspectives on the debate one is to use both long and short term data sets most studies limit the analysis to quarterly data from the post 1960 era we study the link between money interest rates and output using annual data over the extended period 1915 1993

toward a food secure future ensuring food security for sustainable human development in sub saharan africa food security remains a top development priority and global concern it is enshrined in the 2030 agenda for sustainable development in sustainable development goal two food security is also a core component of the human development and capability paradigm since food access and entitlements are critical for reinforcing essential human capabilities in introducing this special issue this paper argues that agriculture is central to improving food security and reducing poverty in africa it suggests that realizing the potential of agriculture in africa requires rapid increases in land productivity and increases in agricultural yields a science based approach that integrates gender and sustainability is critical to meet this goal through the design and implementation of policies that improve the availability farm inputs and farm technology the paper concludes by introducing the papers in this special issue

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar

detrending and the money output link international evidence 1 introduction and background the question of whether there exists an empirical link between nominal money and real output has been subjected to a variety of modern econometric techniques producing conflicting results for example stock and watson 1989 use a vector autoregressive var model that accounts for several important economic variables and find that money exerts a statistically significant effect on real economic activity friedman and kuttner 1992 1993 on the other hand show that using the same specification as stock and watson but extending their sample through the 1980s obviates the money income link friedman and kuttner s results indicate that interest rates are relatively more useful in explaining movements in output thoma 1994 also reports that changes in money do not have a statistically significant impact on output in the united states more recent studies both theoretical and empirical also have shown money to have little or no direct effect on economic cycles rudebusch and svensson 1999 2002 for example conclude that the behavior of money real or nominal has no marginally significant impact on deviations of real output from potential the output gap once past movements in the gap and real rates of interest are accounted for such findings on the basis of what meyer 2001 refers to as the consensus macro model have achieved an influential position among macroeconomists and policymakers 2 other studies challenge the argument that money does not affect real output an early study by christiano and ljungqvist 1988 using a bivariate var model reports the existence of a statistically significant money to output relation in u s data davis and tanner 1997 using monthly u s data extending back to the mid 1800s find that even after interest rate effects are allowed for money remains statistically significant in explaining short run movements in real output using a rolling regression approach swanson 1998 reports a statistically significant relation between money measured as simple sum aggregates and as divisia measures and output even after an interest rate spread variable is added to the model hafer and kutan 1997 considered whether different stationarity properties of the data have influenced reported outcomes since most prior studies assume difference stationarity hafer and kutan demonstrate that estimating var models that include money and interest rate variables under the existence of trend stationarity can dramatically affect the conclusion indeed they find that using a trend stationarity assumption yields the finding that money significantly affects real output movements in the united states a common characteristic of this literature is its focus on the united states there are a few exceptions for example krol and ohanian 1990 apply the stock watson specification to data for canada germany japan and the uk although money actual and detrended significantly affects output in the uk krol and ohanian find no such affect in japan canada and germany they conclude that although detrending the growth rate of u s money affects conclusions about the role of money little is gained from this approach when applied to the other countries another exception to the u s focus is a recent study by hayo 1999 using data from 14 european union eu countries plus canada japan and the united states hayo shows that money output test results are not sensitive to the use of data in levels versus data in differences an obvious question to ask then is whether nominal money is relatively more useful than interest rates in explaining movements in real output across a wider variety of countries that includes industrial and developing economies although the studies of krol and ohanian and hayo represent a broader analysis they too focus on the money output relation in relatively industrialized financially developed countries