optimal growth with many consumers abstract a method is described for constructing all pareto optimal allocations for a dynamic economy with many heterogeneous consumers under certainty in which both the technology and consumer preferences are recursive but preferences need not be additively separable over time optimal perfect foresight competitive equilibrium allocations are obtained through the study of a dynamic program for an economy with one consumption good sufficient conditions are given for the existence of a unique interior stationary distribution of consumption and wealth for a two person exchange economy sufficient conditions are given for the global asymptotic stability of the unique interior stationary point

fiscal policies in the world economy this paper uses a two country general equilibrium model of the world economy in order to analyze the effects of budget deficits and government spending on world rates of interest consumption and international indebtedness it demonstrates the difference between the effects of fiscal expenditures and tax cuts as well as between the effects of current policies and expected future policies it is shown that the qualitative effects of fiscal policies depend on whether the country introducing the policies runs a surplus or a deficit in its current account following the positive analysis of the short run and the steady state effects the paper concludes with a normative analysis of the welfare implications of budget deficits

interpreting comovements in the trade balance and the terms of trade abstract i examine the relation between the trade balance and the terms of trade in a two country dynamic stochastic exchange economy with complete markets along an equilibrium path for this economy the relation is governed by the substitutability between foreign and domestic goods i find in contrast to non stochastic analyses of the harberger laursen metzler effect that a positive association does not require persistent shocks or non constant rates of time preference this contrast highlights the role played by the structure of asset markets complete and otherwise in generating equilibrium comovements

terms of trade shocks and the balance of trade there is a harberger laursen metzler effect abstract according to the harberger laursen metzler hlm effect an exogenous increase in the terms of trade faced by a small open economy leads to an improvement in that country s trade balance in this paper structural vector autoregression techniques are used to investigate whether there is any systematic pattern in the responses of the trade balance to terms of trade shocks for a large number of small open economies two important results emerge first there is strong support in the data for the existence of an hlm effect second the response of the trade balance and real income to a terms of trade shock implied by the structural vector autoregression model are strongly consistent with those reported by mendoza 1995 from simulating a particular dynamic stochastic equilibrium model of a small open economy

can fao s measure of chronic undernourishment be strengthened abstract in its sixth world food survey released at the 1996 world food summit the food and agriculture organization of the united nations fao reported that 841 million people in developing countries are chronically undernourished this number and its country and regional level disaggregations have proved tremendously useful to countless development aid agencies and researchers in the context of a recent wave of new nationally representative household food consumption and expenditure surveys this paper examines the estimation methodology underlying the food insecurity measure which relies on national aggregate measures of food availability and distribution the paper finds that the measure largely reflects national food availabilities and does not adequately capture people s ability to gain access to food the ultimate key to food security the implications for the indicator s use by policy makers in geographical targeting and tracking changes in food insecurity over time are drawn out the paper concludes by arguing that the time has come to review the potential for employing the new household survey data along with new methods to strengthen the empirical foundations of fao s measure

methods of household consumption measurement through surveys experimental results from tanzania consumption expenditure has long been the preferred measure of household living standards however accurate measurement is a challenge and household expenditure surveys vary widely across many dimensions including the level of reporting the length of the reference period and the degree of commodity detail these variations occur both across countries and also over time within countries there is little current understanding of the implications of such changes for spatially and temporally consistent measurement of household consumption and poverty a field experiment in tanzania tests eight alternative methods to measure household consumption on a sample of 4 000 households there are significant differences between consumption reported by the benchmark personal diary and other diary and recall formats under reporting is particularly relevant in illiterate households and for urban respondents completing household diaries recall modules measure lower consumption than a personal diary with larger gaps among poorer households and households with more adult members variations in reporting accuracy by household characteristics are also discussed and differences in measured poverty as a result of survey design are explored the study concludes with recommendations for methods of survey based consumption measurement in low income countries

can diaries help in improving agricultural production statistics evidence from uganda abstract although good and timely information on agricultural production is critical for policy decisions the quality of underlying data is often low and improving data quality could have high payoff we use data from a production diary administered concurrently with a standard household survey in uganda to analyze the nature and incidence of responses the magnitude of differences in reported outcomes and factors that systematically affect these despite limited central supervision diaries elicited a strong response complemented standard surveys in a number of respects and were less affected by problems of respondent fatigue than expected the diary based estimates of output value consistently exceed that from the recall based production survey in line with reported disposition implications for policy and practical administration of surveys are drawn out

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

deficits and intergenerational welfare in open economies this paper deals with public debt in open economies extending diamond s overlapping generations model to a small open economy as well as an international equilibrium of two large economies it focuses on the intergenerational welfare redistributions caused by an increase in public debt triggered by a temporary government budget deficit and shows how these redistributions differ in open and closed economies the interplay between the deficits in the government budget and the current account is also analyzed it is shown how a single period with a government deficit can be followed by a sequence of periods with a deficit in the current account

the impact of research led agricultural productivity growth on poverty reduction in africa asia and latin america abstract twenty percent of the world s population or 1 2 billion live on less than 1 per day 70 of these are rural and 90 are in asia and sub saharan africa research led technological change in agriculture generates sufficient productivity growth to give high rates of return in africa and asia and has a substantial impact on poverty currently reducing this number by 27 million per annum whereas productivity growth in industry and services has no impact the per capita cost of poverty reduction by means of agricultural research expenditures in africa is 144 and in asia 180 or 50 cents per day but this is covered by output growth by contrast the per capita cost for the richer countries of latin america is over 11 000

human appropriation of natural capital a comparison of ecological footprint and water footprint analysis the water footprint concept introduced in 2002 is an analogue of the ecological footprint concept originating from the 1990s whereas the ecological footprint ef denotes the bioproductive area hectares needed to sustain a population the water footprint wf represents the freshwater volume cubic metres per year required in elaborating the wf concept into a well defined quantifiable indicator a number of methodological issues have been addressed with many similarities to the methodological concerns in ef analysis the methodology followed in wf studies is in most cases analogous to the methodology taken in ef studies but deviates at some points well reasoned it has been chosen for instance to specifically take into account the source and production circumstances of products and assess the actual water use involved thus not taking global averages as a result one can exactly localise the spatial distribution of a water footprint of a country with respect to the outcome of the footprint estimates one can see both similarities and striking differences food consumption for instance contributes significantly to both the ef and the wf but mobility and associated energy use is very important only for the ef from a sustainability perspective the wf of a country tells another story and thus at times will put particular development strategies in a different perspective the paper reviews and compares the methodologies in ef and wf studies compares nation s footprint estimates and suggests how the two concepts can be interpreted in relation to one another the key conclusion is that the two concepts are to be regarded as complementary in the sustainability debate

weakly non separable preferences and the harberger laursen metzler effect we examine the current account effect of a terms of trade deterioration for a small country model incorporating weakly non separable preferences a la shi 1994 under endogenous time preference this enables us to emphasize a welfare change as an important determinant of the current account even with increasing marginal impatience the harberger laursen metzler effect occurs if consumers preference toward imports is sufficiently wealth enhanced in that case a terms of trade deterioration must reduce steady state welfare to shift preference away from imports to exports several empirical implications are also derived jel classification f41 f32 preferences faiblement nonseparables et l effet de harberger laursen metzler l auteur examine l effet sur le compte courant d une deterioration des termes d echange dans un modele d un petit pays quand les preferences sont faiblement nonseparables a la shi 1994 et que la preference temporelle est endogene cela permet de souligner qu un changement dans le niveau de bien etre est un determinant important du compte courant contrairement a ce qu on trouve dans la litterature specialisee meme quand on postule une impatience marginale croissante l effet harberger laursen metzler se produit si la preference des consommateurs pour les importations est suffisamment dependante du niveau de richesse dans ce cas la une deterioration des termes d echange doit reduire le niveau de bien etre en regime permanent de maniere a deplacer les preferences des importations vers les exportations on deduit certaines implications empiriques de ces resultats

environmental and gender impacts of land tenure regularization in africa pilot evidence from rwanda although increased global demand for land has led to renewed interest in african land tenure few models to address these issues quickly and at the required scale have been identified or evaluated the case of rwanda s nation wide and relatively low cost land tenure regularization program is thus of great interest this paper evaluates the short term impact some 2 5 years after completion of the pilots undertaken to fine tune the approach using a geographic discontinuity design with spatial fixed effects three key findings emerge from the analysis first the program improved land access for legally married women about 76 percent of married couples and prompted better recordation of inheritance rights without gender bias second the analysis finds a very large impact on investment and maintenance of soil conservation measures this effect was particularly pronounced for female headed households suggesting that this group had suffered from high levels of tenure insecurity which the program managed to reduce third land market activity declined allowing rejection of the hypothesis that the program caused a wave of distress sales or widespread landlessness by vulnerable people implications for program design and policy are discussed

diet shifts towards meat and the effects on cereal us can we feed the animals in 2030 abstract the paper argues that current international projections of meat and feed demand may underestimate future consumption patterns for mainly two reasons demand projections are based on income extrapolation with an assumed demand elasticity and feed requirements per unit of meat are taken to be fixed instead we propose a structural specification that includes a dietary shift towards meat as per capita income increases and we account for a shift from traditional to cereal intensive feeding technologies our finding is that under the commonly assumed growth rates of per capita income world cereal feed demand will be significantly higher in the coming 30 years than is currently projected by international organizations even if we allow for price effects compared to other factors that are generally expected to affect the future world food situation the quantitative impact of the increased cereal feed demand greatly exceeds that of gmos and climate change in the coming three decades

habits and durability in consumption and the dynamics of the current account abstract a model in which consumption exhibits durability and habits develop over the flow of services provided by them is used to study current account dynamics durability leads to adjacent substitutability in consumption while habits are assumed to lead to adjacent complementarity the adjustment of the current account may be non monotonic if habit effects are dominant in the short run and durability effects in the long run then after a terms of trade deterioration we will have a current account deficit followed by a surplus the j curve in the opposite case a surplus will be followed by a deficit 1998 elsevier science b v

aggregate spending and the terms of trade is there a laursen metzler effect this paper investigates the spending and current account effects of terms of trade shifts in a model where households maximize utility over an infinite planning period in the framework developed here an economy specialized in production must experience a fall in aggregate spending and a current surplus as a result of an unanticipated permanent worsening in its terms of trade the paper s model thus provides a setting in which the current account deficit predicted by laursen and metzier harberger and others fails to materialize

the terms of trade and the current account the harberger laursen metzler effect the paper examines the effect of terms of trade changes on a small country s spending and current account assuming optimizing behavior in an intertemporal framework with perfect international capital mobility a temporary future terms of trade deterioration implies a deterioration improvement of the trade balance whereas a permanent terms of trade deterioration has an ambiguous effect depending on the rate of time preference nominal and real variables are considered via exact price indexes two periods and an infinite horizon are examined

current account dynamics and the terms of trade harberger laursen metzler two generations later this is a study of the current account dynamics resulting from the savings and investment dynamics in a small open economy which is subject to exogenous changes in its terms of trade and in world interest rates anticipated and unanticipated as well as temporary and permanent terms of trade changes have very different effects there is however a general tendency towards cycles in both savings and investment which gives rise to cycles in the current account it is shown that the classic harberger laursen metzler effect on saving of a terms of trade deterioration can have any sign for plausible parameter values both for temporary and permanent disturbances

the future of food scenarios and the effect on natural resource use in agriculture in 2050 do we have the natural resource base to feed future populations this study gives a quantification of global land use water use and fertilizer use for the year 2050 for a complete diet and four different futures agriculture will need to develop substantially to feed future populations it is shown that there is a negative correlation between fertilizer use and land use which makes the necessity of incorporating both in such assessments clear water use increases relative to total production and this is going to be a problem unless drastic measures are taken the high wastage and high consumption of animal products in the developed regions are major contributors to the total global demand developing countries aspirations to such practices are a major factor in increases in diet demand as are population increases in those regions in creating a more sustainable food system a one solution approach will not do and solutions should combine supply side and demand side options demand side solutions should target wastage and animal product consumption on the supply side technological development and better feeding efficiency will increase yields feeding the future global population which is necessary to increase living standards worldwide will require a concerted effort

a simple dynamic general equilibrium model abstract we analyse a single sector economy with h 1 infinitely lived agents that operate in a continuous time framework utility functions are recursive but not additive both efficient and perfect foresight competitive equilibrium allocations are considered the existence and stability of such allocations are investigated locally i e in a neighbourhood of steady state allocations the model is shown to be useful for explaining the distribution of wealth and consumption across agents and for analysing the way in which wealth redistribution can affect the dynamics of aggregate economic variables

deterioration of the terms of trade and capital accumulation a reexamination of the laursen metzler effect abstract this paper analyzes the effect of both a permanent and a temporary deterioration in the terms of trade on a small open economy the model based on intertemporal optimization emphasizes the labor leisure choice and the role of capital accumulation the transitional dynamics is shown to depend upon the long run response of the capital stock to the terms of trade shock this consists of a negative substitution effect together with a positive income effect whether or not the laursen metzler effect holds depends upon whether the income effect dominates the substitution effect

terms of trade shocks and optimal investment another look at the laursen metzler effect conventional analyses of the effect of terms of trade shocks provide a misleading view of their impact on investment and the current account because capital goods imports are excluded from the analytical framework the author argues that such an exclusion is both arbitrary and unrealistic the author reexamines the consequences of permanent and transitory changes in terms of trade in a rational expectations model of a small open economy with intertemporally optimizing agents and with trade in both consumption and capital goods in this framework the responses to a permanent terms of trade improvement in unambiguous the long run capital stock and thus investment must rise and the current account must deteriorate exactly the opposite of the laursen metzler effect a transitory improvement in the terms of trade raises saving but has an uncertain effect on investment so the impact on the current account is generally ambiguous and is shown to depend on three factors the import contents on consumption and investment the duration of the windfall and the degree of intertemporal substitutability in both consumption and investment

the harberger laursen metzler effect under capital market imperfections abstract this paper re examines the effects of a permanent terms of trade change on a dynamic small open economy facing an imperfect world capital market as studied in obstfeld 1982 aggregate spending and the terms of trade is there a laursen metzler effect quarterly journal of economics 97 251 270 which assumes that the economy faces a downward sloping bond curve the novelty of the present paper is that a saddle path stable steady state comes into existence under the assumption that households subjective discount rate is a decreasing function of instantaneous utility the harberger laursen metzler hlm effect is shown to hold unambiguously i e an unanticipated permanent terms of trade deterioration leads to an increase in aggregate expenditure and a current account deficit this result is in stark contrast to those obtained in obstfeld 1982 aggregate spending and the terms of trade is there a laursen metzler effect quarterly journal of economics 97 251 270 and many other studies in the literature

reliability of recall in agricultural data despite the importance of agriculture to economic development and a vast accompanying literature on the subject little research has been done on the quality of the underlying data due to survey logistics agricultural data are usually collected by asking respondents to recall the details of events occurring during past agricultural seasons that took place a number of months prior to the interview this gap can lead to recall bias in reported data on agricultural activities the problem is further complicated when interviews are conducted over the course of several months thus leading to recall of variable length to test for such recall bias the length of time between harvest and interview is examined for three african countries with respect to several common agricultural input and harvest measures the analysis shows little evidence of recall bias impacting data quality there is some indication that more salient events are less subject to recall decay overall the results allay some concerns about the quality of some types of agricultural data collected through recall over lengthy periods

the political economy of bad data evidence from african survey and administrative statistics abstractacross multiple african countries discrepancies between administrative data and independent household surveys suggest official statistics systematically exaggerate development progress we provide evidence for two distinct explanations of these discrepancies first governments misreport to foreign donors as in the case of a results based aid programme rewarding reported vaccination rates second national governments are themselves misled by frontline service providers as in the case of primary education where official enrolment numbers diverged from survey estimates after funding shifted from user fees to per pupil government grants both syndromes highlight the need for incentive compatibility between data systems and funding rules

statistical tragedy in africa evaluating the data base for african economic development measurement is increasingly at the centre of debates in african economic development some remarkable upward revisions of gdp which are signs of statistical systems improving caused the declaration of a statistical tragedy in africa this special issue evaluates the database for african economic development with articles on the quality of the data on gdp health and education poverty labour agriculture and income distribution

government spending and the real exchange rate i study the effect of government spending on the real exchange rate in an open economy version of the sidrauski model with a time varying rate of time preference that introduces complementarity between consumption at different points in time i show that a balanced budget fiscal expansion causes a real depreciation and a current account surplus if the expansion falls on traded goods if the increase falls instead on nontraded goods both the stylized results of a real appreciation and a current account deficit and the perverse result of an appreciation and a surplus can occur

the global stability of efficient intertemporal allocations this paper describes a continuous time model of an economy with finitely many infinitely lived consumers and a finite number of capital goods two objectives are achieved first recursive nonadditive utility functionals are formulated and analyzed second these preference functionals are applied to analyze the nature of efficient allocations in a dynamic economy two classes of global turnpike propositions are proven which provide the basis for a model of the long run distribution of wealth these propositions also provide new perspective regarding existing stability literature based on additive utilities copyright 1987 by the econometric society

the rate of time preference and dynamic economic analysis strong restrictions on the structure of preferences are a central feature in the received theory of intertemporal allocation in fact most of the modern literature concerned with capital theoretic problems represents preferences by a functional in which an additive utility function is discounted by a constant rate of time preference this specification is attractive because it is analytically tractable in dynamic models and it clearly delineates how tastes and opportunities interact to determine an economy s household s paths of consumption and capital formation however its rigid structure constancy of time preference severely limits the conclusions and explanatory power of the corresponding models this paper considers a class of utility functionals in continuous time which have the appealing feature that the rate of time preference depends systematically on an index of aggregate future consumption the more flexible structure embodied in these functionals leads to important generalizations and

optimal growth with decreasing marginal impatience abstract this paper analyses the long run dynamics of a continuous time infinite horizon optimal growth model with identical households where the households rate of time preference is endogenously determined however unlike the existing literature we assume that households have decreasing marginal impatience i e the instantaneous discount rate is negatively related to the current consumption with this assumption we analyse the stability and uniqueness of the long run equilibrium we show that contrary to the general belief a negative relationship between the instantaneous discount rate and the household s current consumption does not necessarily result in instability of the dynamic system however even a stable system may be characterized by multiple equilibria so that the initial condition becomes important in determining the long run behaviour of the economy we derive a set of sufficient conditions for stability and uniqueness in this context

dynamics of the trade balance and the terms of trade the j curve the authors provide a theoretical interpretation of two features of international data the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in terms of trade but positively correlated with past movements they document the same properties in a two country stochastic growth model in which trade fluctuations reflect in large part the dynamics of capital formation the authors find that their general equilibrium perspective is essential the relation between the trade balance and the terms of trade depends critically on the source of fluctuations copyright 1994 by american economic association

current account dynamics in a finite horizon model abstract this paper examines the response of the current account in a small open economy to a permanent change in the price of imported intermediate goods to do so it extends blanchard s 1985 open economy model to incorporate the capital stock with adjustment costs a la hayashi 1982 a price increase in imported intermediate goods can be viewed as a combination of transfer payments abroad and capital taxation the former effect leads to a current account deficit and the latter leads to a current account surplus the overall effect depends on the relative magnitude of these effects

from tragedy to renaissance improving agricultural data for better policies abstractagricultural development is an essential engine of growth and poverty reduction yet agricultural data suffer from poor quality and narrow sectoral focus there are several reasons for this 1 difficult to measure smallholder agriculture is prevalent in poor countries 2 agricultural data are collected with little coordination across sectors and 3 poor analysis undermines the demand for high quality data this article argues that initiatives like the global strategy to improve agricultural and rural statistics bode well for the future moving from devarajan s statistical tragedy to kiregyera s statistical renaissance will take a continued long term effort by individual countries and development partners

capital accumulation and the current account in a two country model abstract this paper examines the joint determination of international debt and capital accumulation in a two country model national rates of time preference are endogenous adjusting along an optimal path to come into equality with one another in the steady state the characteristics of short run current account dynamics are crucially linked to world capital accumulation and to a country s long run net external asset position steady state creditor countries tend to have current account surpluses during episodes of world output growth and vice versa for debtor countries this gives rise to possible non monotonic adjustment in the current account and consumption

intertemporal dependence impatience and dynamics abstract this paper develops simple geometric methods for analyzing consumer behavior under recursive but intertemporally dependent tastes since the preferences studied need not be time additive they allow the marginal utility of consumption on a given date to vary with consumption on other dates intertemporal dependence is induced by the presence of a variable individual rate of time preference the optimal consumption responses to transitory and anticipated changes in incomes and interest rates are easily derived and are similar in many respects to the responses implied by the standard constant time preference model intuitive explanations of the first order conditions describing optimal paths are provided

habit persistence and the harberger laursen metzler effect in an infinite horizon model abstract the habit persistence model of ryder and heal is used to examine the harberger laursen metzler h l m effect our results are in contrast to the general view in the literature that the stability requirements preclude the h l m effect in an infinite horizon model we show that if the marginal utility of real consumption is strongly increasing in the habitual standard of living then the h l m effect holds and a terms of trade deterioration reduces savings however if the marginal utility of real consumption is not sufficiently strongly increasing or is decreasing in the habitual standard then the h l m effect is overturned

the terms of trade labour supply and the current account this paper extends svensson and razin s two period analysis of the laursen harberger metzler effect to the important case where labour supply and output are variable a terms of trade shift alters the relationship between the product and the consumption wage and so induces a change in output this extension substantially enriches their analysis a temporary current terms of trade deterioration has an ambiguous effect on the current account but their finding that a future deterioration leads to an improvement in the current account is strengthened the effect of a permanent terms of trade shift in a stationary state depends not only on the rate of time preference but also on the strength of intertemporal substitution effects in the canonical case of a constant rate of time preference the current account deteriorates in response to a permanent terms of trade deterioration if the degree of intertemporal substitution in consumption exceeds that in leisure or equivalently whether the wealth effect on consumption exceeds that on labour supply the model is then extended to an infinite horizon by embedding it in an overlapping generations framework intergenerational linkages through the labour market are now the source of some complex dynamics from an initial position of balance on current account an anticipated temporary terms of trade deterioration leads to a period of steadily increasing surplus a deficit on impact and a further period of declining surpluses a permanent deterioration in the terms of trade leads to a similar period of anticipatory surpluses followed by a period of declining deficits after impact this abstract was borrowed from another version of this item

the terms of trade the real exchange rate and economic fluctuations this paper examines the relationship between terms of trade and business cycles using a three sector intertemporal equilibrium model and a large multicountry database results show that terms of trade shocks account for nearly one half of actual gdp variability the model explains weak correlations between net exports and terms of trade the harberger laursen and metzler effect and produces large and weakly correlated deviations from purchasing power parity and real interest rate parity terms of trade shocks cause real appreciations and positive interest differentials although productivity shocks have opposite effects the puzzle that welfare gains of international asset trading are negligible is left unresolved copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

trimming the excess environmental impacts of discretionary food consumption in australia abstract tackling the overconsumption of discretionary foods foods and drinks not necessary to provide the nutrients the body needs is central to aligning human and planetary health whilst the adverse health impacts of discretionary foods are well documented the environmental and broader sustainability impacts of these products deserve more attention especially since their consumption has been increasing in recent decades particularly amongst low income groups this paper presents a quantitative case study analysis of discretionary food consumption and the associated environmental impacts for households from different income groups in australia environmentally extended input output analysis is used to estimate the full life cycle environmental impacts of discretionary food consumption on the basis of household expenditures on average discretionary foods account for a significant 35 39 33 and 35 of the overall diet related life cycle water use energy use carbon dioxide equivalent and land use respectively these significant percentages provide further support for the need to incentivise diets that are both healthier and more sustainable including divestment from discretionary food products the study highlights the challenges ahead including the need for further research on food substitutions to minimise environmental and social impacts whilst maximising nutritional quality especially amongst poorer socioeconomic groups

when the data source writes the conclusion evaluating agricultural policies statistics describe realities but they also shape them since they are used to design or support policies as such accurate statistics are important using the agricultural sector in rwanda as a case study we demonstrate that dubious statistics can spread quickly according to data from the food and agricultural organization fao yields have increased by 60 per cent since the implementation of large scale agricultural reforms while other datasets point towards more modest gains yet estimates in line with those of the fao dominate the official discourse we suggest that the discrepancies between datasets may be explained by the difficulties of collecting accurate agricultural statistics combined with an incentive to overestimate yields to show that the reforms have worked

terms of trade factor intensities and the current account in a life cycle model this paper examines the effects of terms of trade changes on the external adjustment of a small open economy where each consumer has a life cycle saving function the supply side of the economy is given by the standard two sector model with two primary factors labour and capital it is shown that when both commodities are produced a terms of trade deterioration leads to a current account deficit surplus if the export import sector is more labour intensive