access pricing and investment with stochastically growing demand abstract this paper examines the effect of access charges on firms incentives to invest in a network facility with a stochastically growing demand an access to bypass equilibrium is characterized in terms of an access charge and a level of network investment cost in the equilibrium a leader first enters a market by building a new network then a follower makes a sequential investment for the construction of an additional network after accessing the incumbent s network in an open access environment we confirm that the incentive for preemption can be enhanced by an increase in the access charge

how far down the path to free trade the importance of rice price stabilization in developing asia abstract international trade agreements are pushing the world in the direction of free trade but price stabilization which is inconsistent with completely free trade remains important in developing asia because of the large share of rice in economic output a policy of pure price stabilization for rice without consistent protection either subsidization or taxation can help to create the macroeconomic stability that is essential for sustained rapid economic growth by increasing the quantity and efficiency of investment throughout the economy pure price stabilization can also generate significant equity gains by protecting poor consumers and farmers from sharp fluctuations in prices while domestic commodity price stabilization schemes have a checkered history around the world the experience of asian countries in stabilizing rice prices offers more scope for optimism asian governments have been generally successful in stabilizing rice prices and there are several instances where this has been accomplished without sustained protection of either consumers or farmers however there is room for improved stabilization mechanisms that would lower the costs of intervention

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

grain price stabilization in india evaluation of policy alternatives abstract stabilization of prices is an important element of food policy in india as in most other countries both developing and developed however since the magnitude of grain stocks held for this purpose as well as the costs of physical storage have become prohibitively high there is now a need for finding cost effective alternatives including non interventionist and market oriented methods for price stabilization in this paper we consider the case of rice and wheat which are staple foodgrains in india we make a comparison between alternative price stabilization policies including that of holding buffer stocks in terms of their impact on domestic price stability producer and consumer welfare and government costs a multi market equilibrium framework is used where private storage consumption supply and prices of rice and wheat are determined simultaneously indian exports and imports are assumed to affect world prices the alternative price stabilizing mechanisms are ranked according to both the criteria welfare and price stability achieved the main findings are as follows the ranking of alternatives varies with the criterion used greater price stability need not necessarily imply greater welfare the option of variable levies on private external trade turns out to be the most inexpensive and that of domestic buffer stocks the costliest in achieving price stability further the efficacy of buffer stocks and subsidy to private storage in stabilizing prices is lower under free trade as compared to the case where the economy is closed to private external trade

can two part tariffs promote efficient investment on next generation networks abstract we analyze if two part access tariffs solve the dynamic consistency problem of the regulation of next generation networks we model the industry as a duopoly where a vertically integrated incumbent and a downstream entrant that requires access to the incumbent s network compete on hotelling s line the incumbent can invest in the deployment of a next generation network that improves the quality of the retail services we have three main results first we show that if the regulator can commit to a policy a regulatory moratorium may emerge as socially optimal second we show that if the regulator cannot commit to a policy it can induce investment only when the investment cost is low third we show that in this case two part tariffs involve very large payments from the entrant to the incumbent

competition and irreversible investments abstract incumbent monopolists frequently claim that the introduction of competition will reduce future profits and therefore delay future investments in this paper we show that not only is this not generally true but in the oligopolistic industry model of dixit and pindyck investment under uncertainty 1994 this is never the case we extend this result to situations in which investments have positive externalities and situations in which the monopolist has multiple investment opportunities

intertemporal price cap regulation under uncertainty this paper examines the intertemporal price cap regulation of a firm that has market power under uncertainty the unconstrained firm waits longer before investing or adding to capacity and as a corollary enjoys higher prices over time than would be observed in an equivalent competitive industry in the certainty case the imposition of an inter temporal price cap can be used to realise the competitive market solution by contrast under uncertainty it cannot even if the price cap is optimally chosen under uncertainty the monopoly firm will generally a under invest and b impose quantity rationing on its customers

wheat markets food aid and food security in afghanistan abstract in afghanistan after two decades of civil strife and successive droughts from 1998 to 2002 large inflows of food aid distributed mainly to returning refugees and through food for work programs have helped offset production shortfalls of wheat the country s major staple at the same time private international trade from neighboring countries especially pakistan has also played a major role in augmenting wheat supply and stabilizing prices this paper presents an analysis of wheat prices and market flows in afghanistan based on results of surveys of wheat traders and millers and econometric analysis of price movements in major markets in afghanistan and pakistan in spite of food aid imports domestic prices were not lowered below import parity levels in most major afghan markets thus the price evidence suggests that large scale inflows of food aid which benefited the country by providing resources for targeted food for work and other programs did not have major price disincentive effects on domestic production at least through mid 2003 however following the 2003 bumper harvest the analysis suggests that continued food aid inflows may have depressed producer prices by as much as about 15 moreover given substantial prospects for rehabilitation of irrigation infrastructure there is ample scope for increasing domestic production of wheat and decreasing import demand so price disincentive effects of food aid remain a possibility in the future as well

price stabilization and impacts of trade liberalization in the southeast asian rice market abstract a global rice model using a partial equilibrium framework is used to investigate the impact of trade liberalization in major rice trading countries of southeast asia focusing on the price stabilization mechanism that has long been adopted by governments in indonesia malaysia and the philippines the simulation results suggest that the removal of state trading enterprises in these three countries would lower their domestic prices by as much as 34 but increase the world prices by about 20 when free trade liberalization is realized in 2020 domestic prices decline further in indonesia and the philippines leading to an increase in their imports which are estimated to be as much as 4 5 million tons the impact on domestic prices however is absorbed nearly evenly among indonesia the philippines thailand and vietnam

domestic price stabilization schemes in developing countries preoccupation with the presumed adverse effects of price instability has led developing countries to establish a wide variety of mechanisms to stabilize domestic prices not only of internationally traded goods but of nontraded goods as well however despite the ubiquity of such schemes and the obvious importance with which price stabilization is regarded the development literature is virtually mute on their characteristics and how they have performed in this article we discuss the topic of domestic price stabilization programs in a comparative cross country context we do not examine here the question of whether instability has adverse or positive economic effects as a burgeoning literature continues to debate this issue rather we take as given that stabilization is a desideratum of virtually all governments in the developing world our goals are to describe some of the characteristics of the different schemes used to stabilize

domestic and international impacts of the rice trade policy reform in the philippines abstract faced with high domestic rice prices that have fueled inflation above the 2018 target and penalized poor consumers the most the government of the philippines has decided to abandon the quantitative restrictions on imports and replace them with tariffs this paper uses a global rice model based on a partial equilibrium framework to assess the possible impacts of this reform on imports production consumption and prices in contrast with past similar studies we address three key concerns i the heterogeneity in farm price across 16 regions in response to the combined effect of the tarriffication and the average historical trend in productivity increase at 1 5 between 2001 and 2018 ii the differentiation of imports by origin partly due to the different tariffs applied to countries within and beyond the association of south east asian nations and iii the effect on domestic prices in third countries the simulation results suggest that the reform would increase imports by 2 47 million tons 20 7 in 2019 we also find a large decline in farm prices and retail prices respectively by php 6 1 kg 30 1 and php 7 6 kg 17 4 in 2019 that explains an increase in rice consumption we estimate the fall in total inflation at 1 2 in 2019 but less over time further the large fall in farm prices in 2019 is shared quite evenly among regions in the short term but returns to pre reform levels in the near term using a higher price elasticity of supply for one region obtained from panel data surveys we show a more pronounced decline in production than the national average such differentiated results confirm the relevance of using a regionally disaggregated model to design more targeted policies we also show a slight increase in world prices which led to small increases in the domestic prices of south and southeast asian rice markets while this reform is largely pro poor consumers policy makers would need to use the additional tariff revenue to help rice growers either increase their competitiveness and modernize their rice production or shift to other crops

speeding up the internet regulation and investment in european fiber optic infrastructure in this paper we study how the coexistence of access regulations for legacy copper and fiber networks shapes the incentives to invest in network infrastructure to this end we develop a theoretical model explaining investment incentives by incumbent telecom operators and heterogeneous entrants and test its main predictions using panel data from 27 eu member states over the last decade our theoretical model extends the existing literature by among other things allowing for heterogeneous entrants in internet access markets as we consider both other telecom and cable tv operators as entrants in the empirical part we use a novel data set including information on physical fiber network investments legacy network access regulation and recently imposed fiber access regulations our main finding is that more stringent access regulations for both the legacy and the fiber networks harm investments by incumbent telecom operators but in line with our theoretical model do not affect cable tv operators

political economy of rice price protection in asia rice continues to be the most important food staple in asia contributing 40 80 of total calorie intake rice is also the major source of livelihood of small farmers and agricultural labor households in this region where at least two thirds of arable land is planted to rice at least half of that rice area is rain fed and vulnerable to drought and floods even in irrigated areas higher cropping intensity has increased pest problems contributing further to the production instability that characterizes the rice economy of monsoon asia because of the economic and political importance of rice in asia no government has left its domestic rice sector freely influenced by market demand and supply forces invariably the central food policy question confronting asian governments is how to reconcile the conflicting objectives of providing low rice prices to consumers and remunerative incentives to farmers maintaining stable domestic rice prices to both consumers and producers is a separate and equally important concern moreover given the political importance of rice and the instability of the world rice market most asian countries aim for rice selfsufficiency rather than rely on international trade to pursue their food security goals among rice exporters on the other hand raising government revenues from rice exports is another policy objective to achieve the above objectives a wide variety of policy instruments have been used to influence output and input prices directly or to increase productivity except for thailand most asian governments control rice prices in the short run through a monopoly on international trade as well as by engaging in domestic marketing operations 1 on the other hand governments also invest in irrigation

on the costs of food price fluctuations in low income countries abstract conventional welfare measures of the costs of food price fluctuations in low income countries are extended to allow for both economic growth and food security effects the analysis reveals that growth and food security effects may dominate more conventional welfare costs of food price fluctuations although estimating the empirical magnitude of the effects is hampered by the lack of consensus on the extent to which food price fluctuations actually reduce economic growth and food security even if the welfare costs of food price fluctuations are high there are many challenges to the design and successful implementation of price stabilization schemes

the changing structure of the world rice market 1950 2000 abstract the world rice market has been unstable for much of its post world war ii history with prices volatile and the availability of supplies uncertain these characteristics exemplified by the world food crisis of the mid 1970s influenced domestic price and production policies in a number of asian countries however the structure of the world rice market has evolved and changed during the past 50 years this paper identifies three distinct phases in the history of the market based on trends in the level and stability of production and the trade orientation of major exporters the level and stability of production increased steadily over the entire period exporters have generally been active in the world market with the period 1965 1981 being an important exception since the mid 1980s prices have been low and quite stable and the patterns identified in the paper suggest that prices will remain so in the future the policy implication is that asian rice importers can afford to rely more on the world market than was warranted in the past

access pricing competition and incentives to migrate from old to new technology abstract in this paper we analyze the incentives of an incumbent and an entrant to migrate from an old technology to a new technology and discuss how the terms of wholesale access affect this migration we show that the coverage of the new technology varies non monotonically with the access price of the old technology a higher access charge on the legacy network pushes the entrant firm to invest more but has an ambiguous effect on the incumbent s investments due to two conflicting effects the wholesale revenue effect and the retail level migration effect when the new technology is also subject to access provision we find that migration from the old to the new generation network at the wholesale level can be incentivized if a positive correlation between the access prices to the two old and new generation networks is maintained

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

a new look at the effects of export instability on investment and growth abstract this paper is concerned with the effects of export instability on investment and growth it is shown that past cross sectional empirical studies on the effects of export instability either in prices or in value terms used an incorrect measure of instability that does not properly take account of the share of exports in gdp using a new instability index and a broad set of conditioning variables it is shown that export instability was positively associated with investment but negatively associated with growth in a large sample of countries during the period from the early 1970s to the mid 1980s

rural bias in the east and south east asian rice economy indonesia in comparative perspective this study analyses the rise in protection of rice farmers in east and south east asia since 1960 a statistical model of price formation is tested for japan south korea malaysia the philippines and indonesia on average about 90 per cent of variation in rice prices in these five countries relative to the world price can be an attributed to efforts at price stabilisation rather than farmer protection or discrimination in earlier periods the shift from urban bias to rural bias is more a result of price stabilisation and declining real rice prices in world markets than basic shifts in political economy

export liberalization and household welfare the case of rice in vietnam vietnam has rapidly become one of the three largest rice exporters in the world in spite of a binding export quota this article uses a multimarket spatial equilibrium model to examine the effect of further liberalization on regional rice prices household data are then used to calculate the welfare impact of these price changes on different household groups the results suggest that although rice export liberalization would raise food prices and exacerbate regional inequality it would also increase average real income and reduce slightly the incidence and severity of poverty we explore several explanations of these apparently paradoxical results

the theory of food price stabilisation a small and very volatile fraction of total domestic food production many countries aim at food self sufficiency with the consequence that the country may be an exporter in good years but an importer in bad years international and domestic transport and handling costs are a significant fraction of the average price of cereals so the domestic price fluctuations will tend to be an amplified version of international price fluctuations the difference between the domestic price in exporting and importing years will be twice the transport costs if the world price is unchanged it would require a strong negative correlation between domestic and world supply to offset this additional source of instability 1

strategic investment timing under asymmetric access charge regulation in telecommunications in a liberalized telecommunications market an incumbent has several advantages over any entrant an asymmetric access charge regulation for two such asymmetric firms stimulates competitive investment we show that an entrant with a cost disadvantage has an incentive to invest as a leader under an asymmetric access charge regulation these results fit well with the findings of previous empirical work moreover we also investigate the effects of an asymmetric access charge regulation on competitive investment strategies

preemption and rent equalization in the adoption of new technology we study the adoption of a new technology to illustrate the effects of preemption in games of timing we show that the threat of preemption equalizes rents in a duopoly but that this result does not extend to the general oligopoly game if the gain to preemption is sufficiently small then the optimal symmetric outcome which involves late adoption is an equilibrium this contrasts with reinganum s result that in precommitment equilibria there must be diffusion we develop a new and richer formalism for modeling games of timing which permits a continuoustime representation of the limit of discrete time mixed strategy equilibria

reflections on food crises past abstract world food crises are relatively rare events occurring roughly three times a century but they also tend to be regular events every three decades or so suggesting there is an underlying cyclical cause if so far sighted donor and government investments in raising agricultural productivity and policies on behalf of stable food production and prices might go a long way to preventing food crises in the future preventing food crises rather than trying to cope after the fact with their impact on the poor is the only way to avoid substantial perhaps permanent damage to the welfare of poor households lessons from the world food crises in 1972 73 and in 2007 08 especially lessons from how the world rice market functioned point the way toward improved food policy management at national and international levels in the future

are price controls necessarily bad the case of rice in vietnam abstract most economists instinctive reaction to price controls is that they are harmful its strong enforcement results in shortages and resource misallocation while weak enforcement often leads to black markets and high transaction costs given these instincts this paper assesses the pros and cons of rice price controls in vietnam using a multi sector multi household general equilibrium model these price controls fix producer prices and allow government marketing agencies to sell at higher prices and hence are in part a revenue raising device as such they may be part of an efficient tax mix particularly so since agricultural incomes and production go untaxed under the formal tax system it is argued that such controls can act to dampen costly domestic adjustments in the face of volatile world prices it is shown that this system can be supported as welfare enhancing under conditions currently prevailing in vietnam

trading off volatility and distortions food policy during price spikes this paper analyses the trade off between price distortions and reduced volatility when governments intervened in agricultural and food markets during the recent food price spikes we develop a model to derive how much distortions a government would introduce when it cares about price stability in a situation with limited policy options we show that there is a trade off and identify the optimal combination of distortions and stability for given international price shocks and interest groups preferences for stability we compare these theoretical findings with empirical indicators on actual government interventions in staple food markets we find that several countries have been able to reduce short run price volatility in the domestic markets while at the same time allowing structural medium and long term price changes to pass through to producers and consumers however this is not the general case for many countries even when explicitly taking into account the trade off and the benefits of reducing volatility government policies appear far removed from the optimal trade off and there appears to be much room for policy improvement

food price policy the rationale for government intervention abstract policy makers in the most successful developing countries have not accepted either of the two major schools of thought on food price policy the neo classical school favours free trade to maximize efficiency of resource allocation the structuralist school favours interventions to satisfy goals for income distribution especially in the rapidly growing rice based economies of asia policy makers have been more concerned about stability of domestic prices than their level relative to world prices this concern traditionally dismissed by economists as purely political is justified on economic grounds because of improved macroeconomic and dynamic efficiency from stable food prices the paper identifies both the benefits from food price stability and the costs of achieving it

foodgrain price stabilisation in an open economy a cge analysis of variable trade levies for india within the present multilateral trading system the developing countries are obliged to gradually open up their agricultural sector to world markets as a result of this the effectiveness of conventional instruments of food price stabilisation will be greatly reduced how then is food price stability to be maintained in a liberalised open economy this article presents a general equilibrium evaluation of using variable trade levies on agricultural trade to stabilise foodgrain prices in response to exogenous shocks this is done for the indian economy with the help of a multi period computable general equilibrium cge model focused on agriculture and income distribution the model is used to analyse the sensitivity of the economy s growth income distribution and food security to external and internal shocks under varying degrees of trade openness the results show that both shocks are distributionally regressive and with external shocks become more so the more open the economy is wto consistent var