measuring the spillovers from technical advance mainframe computers in financial services measuring the social gains from recent technological advances is difficult because there are no output indexes from some important adopters measurement methods that infer the willingness to pay of theadopting industries from the derived demand curve for a new technologyovercome this difficulty the derived demand for high speed computersfor use in banks finance and insurance is shown to imply a very largesocial gain to computerization that is not captured by computer manufacturers copyright 1986 by american economic association

the political economy of agriculture for development today the small versus large scale debate revisited the role of agriculture in economic development and the development politics of promoting smallholder versus large scale agriculture have both been at the center of a long lasting and controversial debate using an innovative methodology which combines a value chain approach with input output analysis the growth multipliers and productivity of both farm types in guatemala are analyzed results show that smallholder agriculture has the same potential to stimulate output growth as large scale agriculture smallholder value chains include mainly informal sectors and create more jobs than commercial agriculture therefore a reorientation of agricultural and land policies toward small scale food producers and within a comprehensive policy of integrated rural development is not only necessary in terms of social equity but also for boosting economic development

estimating griliches k shifts griliches k shift a crucial parameter in the welfare evaluation of technological change is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function the analysis permits decomposition of sectoral productivity growth into productivity growth by commodity the k shifts estimated for wheat corn soybeans and beef in u s agriculture indicate a decrease in the marginal cost of production of corn soybeans and wheat during the 1950 1993 years

optimal farm size in an uncertain land market the case of kyrgyz republic this article applies a real options model to the problem of land development making use of the 1998 2001 kyrgyz household budget survey we show that when the hypothesis of decreasing return to scale holds the relation between the threshold value of revenue per hectare and the amount of land cultivated is positive in addition the relation between the threshold and the amount of land owned is positive in the case of continuous supply of land and negative when there is discontinuous supply of land the direct consequence is that in the first case smaller farms will be more willing to rent land and exercise the option where in the second case larger farms will exercise first the results suggest three main conclusions i the combination of uncertainty and irreversibility is an important factor in land development decisions ii farmer behavior is consistent with the continuous profit maximization model and iii farming unit revenue tends to be positively related to farm size once uncertainty is properly accounted for

spillovers and governance an analysis of knowledge and reputational spillovers in information technology investigating spillovers potential costs and benefits to a firm that extend beyond an individual transaction i integrate transaction cost theory and the knowledge based view of the firm in an effort to better understand the efficient governance of knowledge contracts with detailed task descriptions were associated with transactions with the potential to generate new and reusable knowledge the risk of a firm s technology spilling over to others and the risk of reputation impairing spillovers were associated with suppliers using their own employees rather than subcontractors thus results suggest that the creation and protection of knowledge are key factors in understanding governance decisions

creative destruction and firm specific performance heterogeneity traditional u s industries with higher firm specific stock return and fundamentals performance heterogeneity use information technology it more intensively and post faster productivity growth in the late 20 th century we argue that this mechanically reflects a wave of schumpeter s 1912 creative destruction disrupting a wide swath of industries with successful it adopters unpredictably undermining established firms this validates endogenous growth theory models of creative destruction e g aghion and howitt 1992 and suggests intensified creative destruction as explaining findings associating greater firm specific performance variation with higher per capita gdps economy growth rates accounting standards financial system development and property right protection

computers and productivity are aggregation effects important this paper examines the empirical implications of aggregation bias when measuring the productive impact of computers to isolate two specific aggregation problems relating to aggregation in variables and aggregation in relations we compare various production function estimates across a range of specifications econometric estimators and data levels the results show that both sources of bias are important especially as one moves from the sector to the economy level and when the elasticity of all types of non computer capital are incorrectly restricted to be equal in terms of computers however the estimated elasticity is surprisingly stable between industry and sector regressions and does not appear to be biased by the incorporation of a restrictive measure of non computer capital the data consistently show that computers have a large impact on output

employment unemployment and demand shifts in local labor markets this paper analyzes the effects of demand shifts within and between local labor markets on unemployment and employment outcomes observed in those markets the demand shifts are calculated from sales growth data at the firm and industry levels the results show that in general employment and wage adjustments by firms are primarily driven by shifts in labor demand demand shifts between local areas account for large fractions of the observed variation in unemployment and employment rate levels and changes across areas within area shifts cause much smaller and insignificant amounts of unemployment and only if they are between industry copyright 1991 by mit press

the impact of high tech capital on productivity evidence from australia i introduction the bulk of the empirical research on the relationship between high tech capital investment and productivity has been based on data for the united states given the relatively large size of the high tech capital sector in the u s economy it is likely that the united states is a special case most economies resemble australia s in being net importers of high tech capital not producing high tech capital was often cited as a weakness in these economies relative to the united states however since the end of the late 1990s tech boom there has been a reappraisal of whether the production or the use of high tech capital is most beneficial hence to shed light on this debate the main purpose of this paper is to empirically examine the relationship between high tech capital use and the multifactor productivity mfp of 10 industries in the australian market sector using annual data for 1966 2002 alternative specifications of production functions are considered and estimated alternative measures of high tech capital are included with combinations of computers software and electronics capital in the first production function high tech capital is allowed to be more or less productive than other capital to determine whether there is a relationship between high tech capital and mfp it is also possible to test whether there are excess returns to high tech capital for robustness testing purposes a second production function is specified with high tech capital as a separate input into production other potential sources of mfp growth such as public capital research and development stocks and microeconomic reform are also included in the production functions we find evidence of a positive relationship between high tech capital and mfp in the market sector there is less evidence however of excess returns to high tech capital which suggests that current investment levels are not inadequate the results by industry suggest that the benefits of investing in high tech capital are not distributed evenly across the economy with only some industries experiencing a positive relationship between high tech capital and mfp the structure of this article is as follows in section ii the theoretical contribution of high tech capital to mfp and the evidence to date is reviewed in section iii the methodology is outlined in section iv data sources and trends are described in section v the results are presented and interpreted and section vi concludes ii the impact of high tech capital on output and productivity the theory and evidence the impact of investment in high tech capital has been the subject of debate between new economy sceptics and optimists for several years it is widely accepted that mfp has increased substantially in u s high tech producing industries in which the rate of technological change has been phenomenal over the past 40 years several publications have found a quantifiable contribution by computer producing industries to u s output growth 1 however australia is not generally regarded as a producer of computers data from the organisation for economic co operation and development oecd 1998 indicate that the high tech share of australian manufacturing value added was 4 5 in 1995 compared to 15 8 in the united states therefore the substantial u s economy wide mfp improvements specifically associated with its computer producing industry are unlikely to be replicated in the australian economy over the past 30 years there has been rapid accumulation of high tech capital in many countries australia was the third most intensive user of high tech capital in the oecd in 1995 behind the united states and new zealand simon and wardrop 2002 find that this rapid accumulation of high tech capital may have substantially contributed to australia s economic growth during the 1990s this accumulation has been driven by technological change in high tech producing industries lowering the price of high tech capital

information technology and growth the rapid diffusion of information technology it is a direct consequence of the swift decline in the price of computer related equipment which has led to a vast and continuing substitution of it equipment for other forms of capital and labor this substitution generates substantial returns for the economic agents who undertake it investments and restructure their activities in order to increase the role of it there is little evidence however that substitution is accompanied by technical change as this term is used by economists while this appears highly paradoxical to technologists who think of substitution of a more it intensive mode of production for a less itintensive mode as a change in technology it is entirely consistent with the economic framework developed by robert m solow 1957 what do economists mean by technical change and how could this exclude the substitution of a more it intensive production process for one that is less it intensive substitution represents movement along a given production function while technical change corresponds to a shift in the production function substitution takes place if the introduction of computer intensive equipment produces benefits that are fully captured or internalized by the users of it and their suppliers technical change occurs only if more

incentives and moral hazard plot level productivity of factory operated and outgrower operated sugarcane production in ethiopia we investigate the unique contractual arrangement between a large ethiopian sugar factory and its adjacent outgrower associations the only significant difference between the sugarcane production on the factory operated sugarcane plantation and on the outgrower operated plots is the remuneration system and thus the incentives to the workers we compare the productivity of the factory operated plantation with the outgrower operated plots based on a new cross sectional plot level data set that includes all plots that are operated by the sugar factory and its adjacent outgrower associations as sugar cane production depends on various exogenous factors that are measured as categorical variables e g soil type cane variety etc we estimate the production function by a nonparametric kernel regression method that takes into account both continuous and categorical explanatory variables without assuming a functional form and without imposing restrictions on interactions between the explanatory variables in order to obtain meaningful productivity measures we impose monotonicity in input quantities using the constrained weighted bootstrapping cwb method our results show that outgrower operated plots have ceteris paribus a statistically and economically significantly higher productivity than factory operated plots which can be explained by outgrowers having stronger incentives to put more effort into their work than the employees of the sugar factory

farm size land yields and the agricultural production function an analysis for fifteen developing countries abstract the paper analyzes the relationship between factor inputs land yields and labor productivity for farms of different size on the basis of fao farm management data for 15 developing countries for all but three countries a strong negative correlation is found between farm size on the one side and factor inputs and yields per hectare on the other the fitting of unconstrained production functions to the above data suggests that in only few cases the decline in yields for increasing farm size can be attributed to decreasing returns to scale the higher yields observed in small farms are mainly to be ascribed to higher factor inputs and to a more intensive use of land therefore where conspicuous labor surpluses exist the superiority of small farming provides solid arguments in favor of land redistribution such an agrarian reform would determine higher output higher labor absorption and a more equitable income distribution thus contributing in a decisive manner to the alleviation of rural poverty the paper also provides estimates of cross sectional production functions for the 15 countries analyzed empirical relations are found between the output elasticities of land labor and intermediate inputs and physical indicators of their scarcity the paper concludes by proposing a simple method for deriving a long term production function for agriculture

the welfare analysis of product innovations with an application to computed tomography scanners the main goal of this paper is to put forward a methodology for the measurement of product innovations using a value metric that is equating the magnitude of innovations with the welfare gains they generate this research design is applied to the case of computed tomography scanners a revolutionary innovation in medical technology the econometric procedure centers on the estimation of a discrete choice model the nested multinominal logit which yields the parameters of a utility function defined over the changing quality dimensions of the innovative product the estimated flow of social gains from innovation is used to compute a social rate of return to r d to explore the interrelation between innovation and diffusion and to trace the time profile of benefits and costs the latter suggesting the possible occurrence of technological cycles

the firm size farm size and transaction costs the case of hazelnut farms in turkey this study analyzes the effects of transaction costs on the size of hazelnut farms in turkey the study finds that higher land slope and higher variance of rain as transaction cost increasing natural effects lead to smaller hazelnut land holdings high slope and weather variation can increase the costs of monitoring the laborers make moving inputs or output up and down harder limit the use of machinery and reduce contractual performance of labor contracts for farm production functions land is a complex input with measurable interactions with nature contrary to common production theory approaches that take natural properties of land as given the study develops a production function that incorporates natural properties such as slope and rain variance the study utilizes two separate data sets for the estimations the first data set explores the characteristics of hazelnut farmers while the second one analyzes the regional characteristics of hazelnut farms

measurement of competitiveness in smallholder livestock systems and emerging policy advocacy an application to botswana farm level cross sectional data of 556 randomly selected livestock producers were used to investigate the competitiveness of smallholder beef farmers in botswana the results show the presence of inefficiency with about 74 of the variation in actual profit from maximum profit profit frontier between farms mainly arising from differences in farmers practices rather than random variability further the mean profit efficiency level of 0 58 suggests that there is a substantial scope to improve beef profitability in botswana significant profit efficiency drivers include among others education distance to market herd size access to information and access to income from crop production considering the importance of livestock sector for wealth creation and poverty eradication in the rural areas where poverty is more pronounced there is a need for appropriate development strategies and policies directed towards addressing these factors in particular there is need to invest in market infrastructure in order to improve market access hence profit efficiency of smallholder livestock farmers

evaluating the impact of mexico s land reform on agricultural productivity abstract in mexico land reform law and the terms of credit access suggest a priori that farmers in the land reform ejido sector should be less productive than private farmers analysis of studies comparing the productivity of individual ejido parcels and small private holdings however reveals no significant difference between the two sectors between tenure categories there is a de jure but not a de facto difference in small farmers control over resources partly because farmers circumvent restrictions implicit in the land reform the case for formal privatization of the ejido sector may be less compelling than has been suggested

a general model of r d competition and policy this article constructs a model of r d with heterogeneous firms each firm s probability of success is a function of its sunk and recurrent r d expenditures the social gains from an innovation are not fully captured by the successful firm the comparison of the social optimum and the market equilibrium involves balancing spillover and crowding effects pigovian corrective policies as well as strategic policies for a subset of colluding firms are discussed

contributions of weather and fuel mix to recent declines in us energy and carbon intensity a recent 1996 2000 acceleration of declines in energy andcarbon intensity in the u s remains largely unexplained this study usesdivisia decomposition and regression to test two candidate explanations fuel mix and weather the divisia method demonstrates that fuel mix doesnot explain the declines in carbon intensity the fuel mix both overalland for electricity generation became slightly more carbon intensiveover the study period though the slight trend reversed before the end ofthe period a regression based correction to the divisia indices accounting for variation in heating and cooling degree days indicatesthat warmer weather accounts for about 30 percent ofthe total declines this leaves declines of more than 2 percent per year and an accelerationof more than 1 percent over previous decade remaining to beexplained

the solow productivity paradox what do computers do to productivity 1 you don t see computers everywhere in a meaningful economic sense computers and information processing equipment are a relatively small share of gdp and of the capital stock 2 you only thinkyou see computers everywhere government hedonic price indexes for computers fall too fast according to this position and therefore measured real computer output growth is also too fast 3 you may not see computers everywhere but in the industrial sectors where you most see them output is poorly measured examples are finance and insurance which are heavy users of information technology and where even the concept of output is poorly specified 4 whether or not you see computers everywhere some of what they do is not counted in economic statistics examples are consumption on the job convenience better user interface and so forth 5 you don t see computers in the productivity statistics yet but wait a bit and you will this is the analogy with the diffusion of electricity the idea that the productivity implications of a new technology are only visible witlh a long lag 6 you see computers everywhere but in the productivity statistics because computers are not as productive as you think here there are many anecdotes such as failed computer system design projects but there are also assertions from computer science that computer and software design has taken a wrong turn 7 there is no paradox some economists are counting innovations and new products on an arithmetic scale when they should count on a logarithmic scale

oil price shocks and the dispersion hypothesis recent research by david lilien shows that a significant fraction of aggregate unemployment can be explained by the dispersion of employment growth across industries this paper presents two new results in this area first it is shown that a significant fraction of the variation in lilien s dispersion index is due to the differential impact of oil shocks across industries second and more important it is shown that once the dispersion in employment growth due to oil shocks is accounted for the residual dispersion has no explanatory power for unemployment

sectoral shifts and cyclical unemployment reconsidered this paper develops a new measure of reallocation shocks based on the variance of industry stock market excess returns to assess the contribution of sectoral reallocation to unemployment in the postwar u s economy the beveridge curve relationship is used to establish that this series isolates reallocation shocks reallocation shocks are found to explain only a moderate share of the fluctuations in aggregate unemployment on average over the period however reallocation accounted for a substantial share of increases in unemployment in several episodes particularly the mid 1970s reallocation shocks also account for a larger share of fluctuations in unemployment of longer durations than of shorter durations

exact consumer s surplus and deadweight loss consumer s surplus is a widely used tool in applied welfare economics both economic theorists and cost benefit analysis often use consumer s surplus despite its somewhat dubious reputation the basic idea is to evaluate the value to a consumer or his willingness to pay for a change in price of a good from say pricep to pricep because price changes affect consumer welfare an evaluation of this effect is often a key input to public policy decisions yet consumer s surplus is probably the most controversial of widely used economic concepts both paul samuelson and ian little conclude that the economics profession would be better off without it it is my feeling of the situation that substantial agreement exists on the correct quantities to be measured the amount the consumer would pay or would need to be paid to be just as well off after the price change as he was before the price change the quantities correspond to john hicks compensating variation measures an alternative measure which takes ex post price change utility as the basis of comparison is hicks equivalent variation the controversy arises in the measurement of these quantities the usual measurement procedure is to use the area to the left of the marshallian market demand curve between two price levels jules dupuit originated this measure of welfare change and alfred marshall and hicks derived appropriate conditions for its use the primary condition for the area to the left of the demand curve to correspond to the compensating variation is to have constant marginal utility of income marshall gave this condition and if it holds the same quantity will be derived as the area to the left of the compensated hicksian demand curve this area to the left of the compensated demand curve is exactly what the compensating variation and equivalent variation measure thus the constant marginal utility of income is a sufficient condition for marshallian consumer s surplus to be equal to hicks consumer s surplus in this case arnold harberger s plea to use the welfare triangle as one half times the product of the price change times the quantity change to measure deadweight loss corresponds to the correct theoretical amount of welfare change in a recent paper robert willig derives bounds for the percentage difference between the correct measure of either the compensating or equivalent variation and the marshallian measure derived form the market demand curve his bounds which depend on the income elasticity of demand for the single good in the region of price change being considered as well as the proportion of the consumer s income spent on the good demonstrate that the marshallian consumer s surplus is often a good approximation to hicks consumer s surplus the fact that the proportion of the consumer s income spent matters as well as the income elasticity was first pointed out by harold hotelling willig contends that the approximation error will be less than the errors involved in estimating the demand curve thus he hopes to remove the need for apology that applied economists often need to give to theorists who remark on the inappropriateness of using marshallian consumer s surplus to measure welfare change however in this paper i show that for the case primarily considered by willig of a single price change which is also the situation in which consumer s surplus is often used in applied work no approximation is necessary professor of economics massachusetts institute of technology and research associate national bureau of economic research i would like to thank peter diamond erwin diewert daniel mcfadden robert merton robert solow hal varian joel yellin and the referees for help and comments research support from the national science foundation is acknowledged the reason that we still have two rather than one of samuelson s six measures of consumer s surplus arises from an index number problem of the correct basis for the welfare comparison i will give both measures but plan to concentrate on the compensating variation

a partial adjustment approach to evaluating and measuring the business value of information technology abstract in this paper we develop a partial adjustment approach based on the theory of partial adjustment to assess the value of information technology we also propose a performance measure derived from the approach the constrained structural or implicit and unconstrained non structural or explicit models derived from the approach are fitted into a set of panel data at the country level covering the period from 1993 to 2006 for a sample of 12 countries including the g7 nations and are estimated by the seemingly unrelated regression estimation the results produced by the models are robust with respect to the choice of the production function representing the true desired or maximum output and challenge the widely held belief that the productivity paradox has disappeared and the view that the productivity paradox exists in developing economies only the proposed approach compares favorably with the time varying stochastic production frontier approach since it is easier and simpler to apply but unlike the non parametric data envelopment analysis approach it is parametric

agrarian structures urbanization and inequality summary this study examines the impact of agrarian structures on income inequality over the long run first it exhibits the relationship between land and income distribution by developing a theoretical model based on harris and todaro 1970 and lewis 1954 high land inequality increases income gini coefficients in the urban sector as well as the rural sector not only by creating congestion in the urban subsistence sector but also by feeding the growth of the urban reserve army of labor which pulls down the wages in the urban capitalist sector next the study investigates the empirical relationship between land inequality level of urbanization and income inequality using cross country datasets the estimation results support the theoretical model and indicate that the level of land inequality has a significant impact on determining the level of urbanization and urban and overall income inequalities moreover the analysis finds that overurbanization increases income inequality the empirical analysis controls for institutional factors like education inequality and the level of democracy the results present a stronger evidence on the land inequality s influence through urbanization than through education and democracy these results suggest that policymakers should have a broader view as to the importance of agrarian policies a progressive land reform or and subsidies protecting small peasantry can also reduce urban income inequality and poverty over the long run

sectoral shifts and cyclical unemployment a reconsideration sectoral shifts and cyclical unemployment a reconsideration the debate over the relative importance of sectoral and aggregate shocks in explaining fluctuations in the aggregate unemployment rate has centered on the relationship between unemployment job vacancies and the dispersion of sectoral employment growth rates which proxies for sectoral shocks this paper examines some possible theoretical relationships between these variables and after decomposing unemployment into components attributable to sectoral and aggregate shocks estimates the importance of each if finds that fluctuations in unemployment are principally caused by aggregate shocks but sectoral shifts explain a significant albeit steady amount of unemployment i introduction in a controversial paper lillien 1982 argued that much of the rise in aggregate unemployment experienced in the 1970s and 1980s was attributable to increases in the natural rate of unemployment these increases he said arose from shifts of demand between the different sectors of the national economy these demand shifts increased unemployment because labor market frictions prevented the immediate reallocation of workers from declining sectors to expanding sectors lillien used a dispersion index of sectoral employment growth rates as a proxy for the extent of sectoral shifts and found that aggregate unemployment could be explained by this dispersion with a positive distributed lag given the much discussed changing composition of output and employment in the u s this interpretation of unemployment quickly won adherents such as barro 1984 more recent work by abraham and katz 1986 challenges this view they argue that the rise in aggregate unemployment was attributable to aggregate demand disturbances they showed that if sectors had different cyclical sensitivities aggregate demand disturbances such as those resulting from monetary policy or fluctuations in animal spirits could produce counter cyclical fluctuations in the dispersion of sectoral employment growth rates the finding that unemployment was a distributed lag of this dispersion did not therefore distinguish between the two hypotheses instead abraham and katz found vacancy rates to be negatively related to dispersion with a distributed lag they interpreted this result as confirmation of the aggregate demand hypothesis since it was consistent with a movement along the beveridge curve 1 my paper further explores the relationships between sectoral shifts aggregate unemployment and aggregate vacancies the theoretical section demonstrates that sectoral shifts are also consistent with a movement along the beveridge curve and a negative relation between vacancies and the dispersion of sectoral employment growth rates this result potentially invalidates abraham and katz s claim and at the same time provides a novel explanation of the beveridge curve in the empirical section i use the implications of the two hypotheses to decompose the dispersion of sectoral employment growth rates into parts attributable to sectoral shifts and aggregate shocks respectively these new measures are then used to estimate the relative contributions of sectoral shifts and aggregate disturbances to aggregate unemployment this paper is linked to an emerging literature on the sources of macroeconomic fluctuations the seminal paper by long and plosser 1983 showed how real business cycle models could explain comovements of output across sectors on the basis of sector specific shocks in a subsequent paper long and plosser 1987 sought to identify the relative importance of aggregate versus sector specific shocks using a single factor model of output growth they found that aggregate shocks explained only a relatively small amount of the convariation of output across sectors and concluded that sectoral shocks are largely responsible for cyclical fluctuations

computerisation and wage dispersion an analytical reinterpretation the rich countries have recently seen a dramatic rise in income inequality all the more surprising because the long term trend had been toward equality this paper examines one of the leading explanations computerisation in the workplace i offer a theory of computers impact on white collar work which goes far toward explaining the timing form and locus of recent labour market changes the theory looks at the bureaucratic and organisational applications of computers that have been first largest and most influential they have two effects on firms demand for labour at different skill levels

an empirical model of mainframe computer investment this paper introduces a dynamic model of investment decisions in mainframe computer systems i estimate and test the model using detailed micro data from a company in the telecommunications industry the model accounts for technological depreciation which distinguishes computers from other investment goods where physical depreciation is typically a key factor underlying replacement investment decisions the company increased its installed mainframe computer capacity by over 30 fold over the 10 year sample period part of this growth was undoubtedly due to the huge increase in performance and the corresponding drop in the per unit cost of processing capacity of mainframes a consequence of moore s law however there was also tremendous growth in the need for computers for billing account processing and other tasks due to the rapid growth in the telecommunications industry over this same time period i estimate the unknown parameters of the investment model using a nonlinear least squares nested fixed point algorithm nls nfxp which solves the bellman equation underlying the dynamic model of investment and replacement of mainframe computers by nonlinear least squares i demonstrate that it is feasible to estimate this model on an ordinary pc whereas standard discretization approaches to solving the firm s optimal investment policy might not even be feasible using supercomputers i show that the estimated model fits the data very well and accurately captures the large growth in installed mainframe capacity the timing and magnitude of replacement investment as well as periodic upgrades of existing mainframe units i use the model to decompose how much of the 30 fold increase in mainframe computer capacity is due to moore s law i e the huge drop in the unit cost of installed mainframe capacity and how much is due to the growth in demand for services of mainframes due to the rapid growth in demand for telecommunications services particularly cell phone accounts by the firm s customers copyright 2010 john wiley sons ltd

land reform as commenced business the evidence against stopping abstract in the new paradigm institutions are long term endogenous thus the aims of land reform must be compatible with replace or substitute for initial incentives and power structures many reforms e g compulsory collectives are not redefinition of land reform is therefore needed yet the case for private land redistribution with ceilings remains the inverse relationship rests firmly on lower cost labor transactions in small farms though large but competitive transport or processing firms which enjoy lower cost capital transactions may be needed crucial is the impact of the postreform structure on livelihoods especially for the growing rural majority near landless workers new style market based reforms have potential probably best combined with old style ceilings substantial compensation with urban taxpayers sharing costs alternative off farm prospects and progressive taxes on large landholdings or bequests

customer and supplier driven externalities the purpose of this paper is to provide empirical evidence helpful for distinguishing different types of externalities we pursue this by extending the productionfunction framework of robert e hall 1990 and caballero and lyons 1990 1992 to exploit two key dimensions of the data disaggregate input output relationships and differences between estimates emphasizing time series versus cross sectional aspects of the data we obtain three main results first from the within estimates using annual data which emphasize the time series properties common across sectors we find a strong reduced form relationship between industry productivity and the activity level input growth of customers in sharp contrast supplier activity levels are insignificant the second result derives from between estimates which emphasize the cross sectional dimension of the data here we find the opposite is true there is a strong reduced form relationship between industry productivity and the activity level of suppliers but no relationship with customer activity levels we interpret the first two results as suggesting that over shorter horizons the linkage between an industry and its customers is pivotal in the transmission of external effects while in the long run external effects are mostly related to intermediate goods linkages the third result concerns the transition from short to long run we find that as the number of periods over which the variables are averaged is incrementally increased from one year toward the full sample period 27 years the significance of customers versus suppliers smoothly reverses itself the remainder of the paper is organized in four sections section i presents the core model and the econometric methods for disentangling the external effects section ii describes the data and estimation section iii presents the main results and our conclusions are presented in section iv

volatility accounting a production perspective on increased economic stability this paper examines the declining volatility of u s output growth from a production perspective at the aggregate level increased output stability reflects decreased volatility in both labor productivity growth and hours growth as well as a significant decline in the covariance the decline in output volatility can also be traced to less volatile labor input and total factor productivity growth and the smaller covariance between them at the industry level the decline in volatility appears widespread with about 80 of component industries showing smaller contributions to aggregate output volatility after 1984 although most of the aggregate decline reflects smaller covariances between industries there is also strong evidence of a decline in the correlation between hours and labor productivity growth across industries the paper concludes with a discussion of potential explanations jel e0 e3

modern value chains and the organization of agrarian production empirical studies of agrarian production in developing countries often find that small farms possess a productivity advantage over larger farms eswaran and kotwal 1986 famously derive this inverse farm size productivity relationship from the structure of agrarian production the focal prediction of their model is that in otherwise equivalent economies a more egalitarian land distribution raises both output and producer welfare the traditional spot procurement system implicit in the eswaran and kotwal model however diverges fundamentally from modern contractual procurement practices we therefore develop a new model of agrarian production in order to determine whether the introduction of a modern value chain alters the welfare effects of land redistribution the inverse farm size productivity relationship persists in our model but we find that more egalitarian land distribution leads to nonmonotonic changes in producer welfare we also find that the introduction of a modern sector can harm the laboring classes

the future of small farms trajectories and policy priorities summary while smallholder development has in the past led to reductions in poverty and hunger does this still apply in today s more globalized world this paper reviews the debates on the contemporary role of agriculture in development and the case for small farms in light of the rise of supermarkets lower commodity prices and liberalized trade agricultural research funding environmental change hiv aids and changing policy ideas although the answers vary greatly by context for many low income countries smallholder development remains a key option the policy agenda however has changed in addition to providing public goods the growing challenge is to overcome market failures which is largely a matter of institutional innovation

south african land policy the legacy of history and current options abstract the highly dualistic farm structure of south africa and the low productivity of native african farmers have been the result of systematic distortions in land allocation output markets the provision of infrastructure agricultural credit and services the dualistic structure did not emerge because of genuine economies of scale in the large commercial sector other countries in latin america and africa that once supported a dualistic farm size structure through similar distortions have either implemented large scale land reforms or have experienced decades of peasant revolts and civil war the paper compares these international experiences to south africa and outlines judicial and market assisted approaches to south african land reform

estimating multiple discrete choice models an application to computerization returns buyers in many markets face multiple discrete choices they can purchase multiple units as well as multiple brands at the same time this paper presents a multiple discrete choice model for the analysis of differentiated products demand users maximize profits by choosing the number of units of each brand they purchase i estimate the model using micro level data on the demand for personal computers i use the estimated demand structure to assess the welfare gains from computerization and technological innovation in peripherals the estimated return on investment in personal computers is 92 moreover a 10 increase in the performance to price ratio of microprocessors leads to a 2 2 gain in the estimated user surplus the personal computer pc market is of interest to industrial organization economists because of its size the continual technological change and above all because of the farreaching implications of pcs on the economy as a whole several distinct features make pc demand difficult to model pcs are a differentiated durable good in constant technological evolution moreover buyers make multiple discrete choices firms according to our data spread their purchases of pcs over different brands at the same time they buy pcs in blocks several units of each brand that they have chosen the aim of the paper is to present a model that captures these features and to use this model to estimate the welfare gains from computerization classical discrete choice models allow one choice among mutually exclusive alternatives in contrast the proposed framework allows users to demand multiple units and multiple brands the model can be applied to other cases of multiple discrete choices e g the composition of airline fleets car holdings per household the fields of the faculty in economics departments household cereals consumption or any other good consumed in more than one variety during a relevant time period although pervasive multiple discrete choice problems have received little attention because of their complexity a central issue regarding the pc market is the current controversy in the economics literature about the computerization puzzle this puzzle stems from the empirical finding that computerization has had no effect on firm productivity griliches and siegel 1991 and morrison and berndt 1990 contrary to those results hendel 1994 and lichtenberg 1995 using more disaggregate data than most previous studies report excess returns to computerization this indicates that data aggregation may have created the computerization puzzle in this paper i present a model consistent with the basic

computers obsolescence and productivity this paper develops a new technique for measuring the effect of computer usage on u s productivity growth standard national income and product accounts nipa measures of the computer capital stock which are constructed by weighting past investments according to a schedule for economic depreciation the rate at which capital loses value as it ages are shown to be inappropriate for growth accounting because they do not capture the effect of a unit of computer capital on productivity this is due to technological obsolescence machines that are still productive are retired because they are no longer near the technological frontier and anticipation of retirement affects economic depreciation using a model that incorporates obsolescence alternative stocks are developed that imply a larger computer usage effect this effect together with the direct effect of increased productivity in the computer producing sector accounted for the improvement in u s productivity growth over 1996 1998 relative to the

unemployment in canada and the united states reduced form unemployment equations containing aggregate demand structural and frictional variables are estimated for canada and the united states post 1981 increases in unemployment rates are explained almost entirely by aggr egate demand variables although structural sectoral variables make i mportant contributions to changes in the gap between the two countrie s unemployment rates for both countries the results support the fo llowing monetarist propositions monetary variables are the prime determinants of the business cycle exogenous investment shocks are typically of minor importance and macro policy has tended to be dest abilizing

the future of small farms summary interest in agriculture for growth and poverty reduction reawakened in the early 2000s made all the keener by the sudden rise in cereals prices on world markets in 2007 08 but is it still possible to drive agricultural growth through small farms as happened in the green revolution whether small farms have a future was debated at a workshop held in wye united kingdom in june 2005 it concluded that small farm development is not just desirable for poverty reduction but also feasible even in changing circumstances and particularly those of more concentrated supply chains with more demanding buyers that said while much that needs to be done is straightforward such as provision of public goods fostering the institutional innovations to allow small farmers to deal with the emerging supply chains will require patient work tailored to specific circumstances the future of all smallholders may well not lie in farming but the measures to stimulate the rural nonfarm economy and provide jobs for those leaving farming a favorable rural investment climate provision of public goods institutional development are largely the same as those for agricultural development as well

computers productivity and input substitution i introduction the last two decades has been a puzzling time for many productivity analysts while computer prices fell at extraordinary rates and firms invested hundreds of billions of dollars in new computer equipment aggregate productivity growth remained sluggish this computer productivity paradox has generated a large literature that examines the economic impact of the computer revolution 1 this paper offers a simple solution to the computer productivity paradox by making careful distinction between computers as an output from one sector and an input to other sectors data for 35 manufacturing and service sectors for 1947 1991 show that sectoral differences are crucial in understanding the impact of computers aggregate analysis is inappropriate since it obscures basic distinctions between a shifting production function in the computer producing sector multi factor productivity growth and movements along production functions in the computer using sectors substitution and capital accumulation once these differences are isolated the growth impact of computers is readily observable the computer producing sector experienced fundamental technological progress and now produces cheaper better computers the sectoral data show this as rapid multi factor productivity mfp growth for 1973 1991 although aggregate mfp growth remains below historic averages the computer producing sector has clearly done its part mfp growth in this sector is many times the economy average and has contributed over one third of aggregate mfp growth for 19811991 the sectoral detail shows that the slowdown in aggregate productivity would have been much more severe were it not for such large mfp gains in the computer producing sector for the other sectors of the economy computers affect growth in a more traditional although less glamorous way when the price of real computing power fell so dramatically in the 1970s and 1980s firms responded by substituting away from relatively expensive labor and non computer capital and investing heavily in cheap computers for these sectors the computer revolution affects output growth not by raising mfp but by inducing firms to accumulate computers at extraordinary rates real computer services for example grew in excess of 20 per year in 14 out of 35 sectors for 1973 1991 although virtually all sectors are rapidly accumulating computer equipment computers remain small in levels in 1991 for example computer investment was only 10 of private fixed investment so the growth contribution of computers remains small relative to sectoral aggregates of labor and non computer capital the rapid rates of accumulation however are clearly making computers a more important source of growth across sectors with this heavy investment also came the wide spread expectation that computers would fundamentally alter the way firms operate and lead to higher mfp the reality has been very different as the most computer intensive sectors show steep declines in mfp growth after 1973 with three quarters of all computers concentrated in three service sectors trade fire and other services however this finding must be interpreted with caution as griliches 1994 notes output in these sectors is largely unmeasurable and thus mfp growth will be understated nonetheless it is quite reasonable that even computer using sectors where output is easier to measure show no mfp gains computer investment creates a capital input that enters the production function like any other purchased input since constant quality deflators embody productivity improvements in investment the direct impact is seen through the rapid capital accumulation only if the adoption of computers leads to production externalities or spillovers would computer investment also increase mfp growth the data however show no evidence of this ii computers and growth the national statistics most clearly show the computer revolution in the investment data

the short run relationship between sectoral shifts and u s labor market fluctuations monthly data for the aggregate u s economy are used to assess competing hypotheses concerning the relationship between sectoral employment shifts and fluctuations in the unemployment rate it is shown that sectoral shifts are caused by major work stoppages aggregate fluctuations unrelated to permanent sectoral shifts a reallocation timing effect and allocative shocks at the sectoral level larger employment shifts are associated with higher unemployment during slow growth periods and lower unemployment during above average growth periods models are presented which demonstrate that both aggregate and allocative shocks are causes of cyclical increases in unemployment

on price risk and the inverse farm size productivity relationship abstract the oft observed inverse relationship between farm size and productivity has elicited several explanations having important policy and theoretical implications using advances in the analysis of price risk effects on producer behavior and a simple two period model of an agricultural household that both produces and consumes under price uncertainty at the time labor allocation decisions are made this paper demonstrates analytically that a non degenerate land distribution and price risk can together produce an inverse relationship even absent any of the more common explanations empirical evidence from madagascar confirms the plausibility of this intuitive explanation for the phenomenon

chinese industrial reform accomplishments prospects and implications why has china grown so fast when conditions thought to be necessary for growth were absent nowhere is this dissonance greater than in china s industrial sector which has recorded big gains in output employment and exports in the absence of privatization effective bankruptcy legislation and other policy innovations widely seen as prerequisites for successful reform this essay reviews the accomplishments of chinese industry since the start of reform in 1978 focusing on the internal dynamics of the development process considers the future of partial reform and discusses the implications of china s industrial reform experience

u s economic growth at the industry level the u s economy has expanded rapidly in recent years with total factor productivity the source of growth most closely identified with technological gains rising sharply since the mid 1990 s see e g bureau of labor statistics 1999 william gullickson and michael j harper 1999 mun s ho et al 1999 daniel e sichel 1999 this strong aggregate performance and the well documented explosion of investment in computers and other high tech equipment have led many to believe that the united states has experienced a permanent technology led growth revival it is essential however to disaggregate estimates of economic growth to the industry level to understand the new trends in the u s economy productivity growth the ability to produce more outputs from the same inputs differs widely among industries for the economy as a whole negative productivity growth in one industry can offset positive productivity growth in another and jorgenson 1990 shows that a measure of productivity based solely on aggregate data is valid only under very stringent conditions we avoid the limitations of an aggregate measure of productivity by decomposing u s growth across industries for the period 1958 1996 by breaking down the u s economy into 37 industries 35 private industries private households and general government we identify the contribution of each industry to aggregate productivity growth this enables us to isolate the underlying sources of gains in productivity and provides a better understanding of the forces driving the u s economy economy wide productivity from an aggregate production function increased 0 45 percent per year during 1958 1996 while methodology developed by evsey domar 1961 for aggregating over industries yields an aggregate estimate of 0 48 percent over the same period however industry productivity growth ranged from 1 98 percent in electronic and electric equipment to 20 52 percent in government enterprises highlighting fundamental differences in technology and productivity growth across industries these results show that the aggregate production function provides a reasonable estimate of productivity trends over long periods but also masks important differences among industries

cyclical fluctuations and sectoral reallocation abstract to investigate how sectoral demand shifts affect cyclical unemployment studies by murphy topel and loungani rogerson examine whether labor mobility rises in recession results are contradictory depending on a priori assumptions about unfinished unemployment spells this note uses monthly data from the early 1980s and a competing risks hazard approach to overcome this problem results confirm the loungani rogerson finding of higher respecialization in recession however the countercyclicality is fairly modest when estimated in an unbiased way

globalization trade and income my purpose in this paper is to address two questions that confront our discipline repeatedly these days first what is a useful classification of the symptoms and the determinants of globalization a phase used in a remarkable variety of contexts to economists globalization is generally thought of as the increasing internationalization of the production distribution and marketing of goods and services the term is used less precisely in the popular literature perhaps best exemplified by kenichi ohmae s book the borderless world and when used loosely it invokes a wide variety of political sociological environmental and economic trends that are the concern of media attention almost daily however one defines globalization it is surely a development that is having a profound impact on the subject of economics as a whole and ought to have on the field of international economics in particular my second purpose is to ask how globalization is affecting our profession s view of theory and empirical work in international economics traditional trade theory was concerned with a set of fairly well defined questions regarding the determinants of trade the pattern of trade and the welfare consequences of various trade policy instruments the last two decades and perhaps the last decade in particular has led to a much wider interpretation of what living in an open economy means the change that is occurring on a wide range of economic social scientific and

does the new economy measure up to the great inventions of the past abstract during the four years 1995 99 u s productivity growth experienced a strong revival and achieved growth rates exceeding that of the golden age of 1913 72 accordingly many observers have declared the new economy to be an industrial revolution even more important than the second industrial revolution of 1860 1900 which made the golden age of productivity growth possible this paper dissects the recent productivity revival subtracts out a cyclical component and concludes that there is no revival of the productivity growth trend in the 88 percent of the private economy lying outside of the durables manufacturing sector the paper explains this surprising finding by pointing to limitations in computers and the internet in comparison with the great inventions of the past

economic efficiency in polish peasant farming an international perspective one decade following the market transition in poland the agricultural sector still exhibits low productivity policy makers often describe the sector as fragmented and inefficient to understand why small scale farming in poland is inefficient despite longstanding secure property rights a survey of economic efficiency in southern agriculture was conducted and compared with limited studies of efficiency in poland the most important issues particularly related to farm size and efficiency are price risk uncertainty and low rural development comparative studies across regions with varying institutional arrangements and economic organization are powerful but must be made carefully and critically

investigating and comparing the dynamic patterns of the business value of information technology over time abstract the long debated issue of the business value of information technology it to the firm country has received a great deal of attention in the literature but the studies have rarely examined the dynamic patterns of the it value as measured by the firm s productive efficiency over time the objective of this paper is to apply the three factor constant elasticity of substitution ces time varying stochastic production frontier models and use the same data set as used in several previous studies to investigate the dynamic patterns of it value over time in connection with the issues of inputs substitution and complement and the productivity paradox this paper adopts two analytical skills collective and individual to analyze the empirical results collectively we find that the dynamic patterns of it value are closely related to the substitution and complement of three inputs and the it productivity paradox individually we identify five common dynamic patterns of the it value measured by productive efficiency and interpret their implications for the productivity paradox as summarized in a two by two matrix of practical applications and strategies this matrix accounts for four different scenarios of the relationship between the average productive efficiency and the it productivity paradox illustrates some practical applications by the analytical results and provides some business insights and managerial strategies for it decision makers and po is managers this represents a new contribution to the understanding of the dynamic influence of it investments upon the value of it over time

unemployment fluctuations in the united states further tests of the sectoral shifts hypothesis this paper presents further evidence on the importance of sectoral shifts by examining unemployment fluctuations in the united states over the period 1960 to 1991 extending previous research in three directions first by using a thirty industry decomposition of quarterly nonagricultural employment second by employing modern time series econometric techniques and third by using dispersion measures purged of both monetary and aggregate demand influences the authors findings support the view that sectoral shifts have been an important element of fluctuations in u s employment and also indicate that a given amount of dispersion has been associated with more unemployment during downturns than upturns copyright 1995 by mit press

technological and organisational change in a process of industrial rejuvenation the case of the italian cotton textile industry the coevolution of technological and organizational change shapes modernization in mature industries only large vertically integrated managerial firms can bear the delays between the adoption of new information technologies and their positive effects on productivity growth a feature of the italian cotton industry is the highly specialized colocalized family owned small firm that is functionally organized it emerged in the 1970s to cope with the introduction of technological changes such as shuttleless looms and open end spinning this structure risks delaying the successful implementation of technological innovations an industrial policy aimed at the adoption of both technological and organizational change could counterbalance the trend toward decline copyright 1998 by oxford university press

is there a farm size productivity relationship in african agriculture evidence from rwanda whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in africa is of considerable policy relevance this paper revisits this issue and examines potential causes of the inverse productivity relationship in rwanda where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector nationwide plot level data from rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications the inverse relationship continues to hold if profits with family labor valued at shadow wages are used but disappears if family labor is rather valued at village level market wage rates these findings imply that in rwanda labor market imperfections rather than other unobserved factors seem to be a key reason for the inverse farm size productivity relationship

innovation r d cooperation and labor recruitment evidence from finland this article investigates the role played by one type of firm interaction namely rd rd and labor acquisition appears to be only of limited importance for innovation

differences in state unemployment rates the role of labor and product market structural shifts state unemployment rates diverged dramatically in the 1980s differing unemployment rates across states are an important public policy concern because of equity concerns and the pure human consequences of higher unemployment moreover at the national level a greater dispersion in state and regional unemployment rates can increase the natural rate of unemployment and shift the phillips curve out because of an inefficient allocation of the labor force 3 38 one possible cause for the divergence in unemployment rates is national industrial restructuring u s industrial restructuring was suggested by lilien 26 as a cause for the rise in the national unemployment rate moreover national restructuring can have differential impacts across states because states can have dramatically different mixes of industries from each other one of the difficulties of national restructuring from a regional perspective is that it is difficult to avoid on the other hand if regional differences in unemployment are due to state idiosyncratic causes state and local public policy can potentially play a more active role for example the economic problems that plagued the northeast and california during the early 1990s have been typically attributed to national downsizing in the defense industries conversely economic problems in these states may have been driven by factors that are located within the state such as the collapse of their real estate markets

sectoral shifts and aggregate unemployment additional empirical evidence 1990 sectoral shifts and aggregate unemployment additional empirical evidence applied economics vol 22 no 3 pp 331 346

the cleansing effect of recessions the authors investigate industry response to cyclical variations in demand production units that embody the newest process and product innovations are continuously being created and outdated units are being destroyed although outdated units are the most likely to turn unprofitable and be scrapped in a recession they can be insulated from the fall in demand by a reduction in creation the structure of adjustment costs plays a determinant role in the responsiveness of those two margins the calibrated model matches the relative volatilities of the observed manufacturing job creation and destruction series and their asymmetries over the cycle copyright 1994 by american economic association

computing productivity firm level evidence we explore the effect of computerization on productivity and output growth using data from 527 large us firms over 1987 1994 we find that computerization makes a contribution to measured productivity and output growth in the short term using one year differences that is consistent with normal returns to computer investments however the productivity and output contributions associated with computerization are up to five times greater over long periods using five to seven year differences the results suggest that the observed contribution of computerization is accompanied by relatively large and time consuming investments in complementary inputs such as organizational capital that may be omitted in conventional calculations of productivity the large long run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s

rural market imperfections and the farm size productivity relationship evidence from pakistan the subject of this article is the relationships between farm size and productivity and between farm size and profitability in the developing countries the recent controversies over the inverse size output relationship are reviewed and a framework is provided that explains the inverse relationship based on plausible assumptions about imperfections in the markets for labor land credit and risk from this framework a set of testable hypotheses are derived the hypotheses are tested on recent farm level panel data from pakistan a strong inverse relationship between farm size and yield is present in the sample even when household fixed effects are used to account for unobserved heterogeneity moreover the suggested market imperfections framework is consistent with the data

the structure of technology in a multioutput branch banking firm we formulate and estimate a multioutput bank s cost function amenable for distinguishing between economies of scale and economies of network density we find significant returns to network density especially for smaller banks diseconomies of scale are found for the larger banks whereas the hypothesis of constant returns to scale could not be rejected for the smaller banks

is small beautiful farm size productivity and poverty in asian agriculture the debate on the relationship between farm size and productivity has gone through a complete circle in the 1960s it was perceived that small farms were efficient because they can fully use their resources particularly family labor and they can monitor their production activities closely but in the 1970s and 1980s as many asian countries rapidly moved towards industrialization and urbanization small farms were considered a major obstacle in this process