revealed objective functions of microfinance institutions evidence from bangladesh abstract this paper discerns between two alternative objective functions for not for profit microfinance institutions mfis profit maximization and poverty targeting i use the strategic branch location choices of the two largest mfis in a mature concentrated market to reveal their objectives i consider location decisions to be the pure strategy nash equilibrium outcome of a one shot game where the mfis simultaneously choose markets in which to locate as well as how many branches to open in each applying the duality principle i nest fully a pure profit maximization objective within a poverty targeting motive i test the model using comprehensive data from bangladesh in 2003 structurally estimating profit and impact functions my msm estimates suggest that pure profit maximization cannot explain the branch placement pattern for grameen bank or brac they both deviate towards poverty alleviation targeting one higher standard deviation of poverty headcount costs grameen 35 2 of its potential profits and brac 51 4

agricultural productivity and convergence europe and the united states this article applies the window malmquist index wmi approach to measure changes in agricultural total factor productivity tfp for the united states and a sample of nine european countries for the period 1973 to 1993 the dataset used in this article is obtained from ball et al 2001 the wmi is constructed by combining data envelopment analysis window analysis with the malmquist index approach furthermore the kruskal and wallis rank test is used for testing frontier shifts among observed periods the article also explores the question of convergence in tfp across the countries under consideration by testing for and convergence as well as for stochastic or long run convergence the results show wide variation in the rate of tfp growth across countries with an average trend growth rate of 1 62 the results indicate the presence of convergence but the absence of convergence for the full period under consideration but the presence of both and convergence for the sub period 1983 to

structural instability and the production smoothing model of inventories the production smoothing model of inventories implies that inventories labor inputs sales and factor input prices are cointegrated if sales and factor prices are i 1 with one cointegrating vector for each state variable held these propositions are tested in six nondurable goods industries all industries provide evidence of cointegration fewer quasi fixed factors are found than previous research often assumed estimates of cointegrating vectors provide implausible parameter estimates rank stability tests with fixed or seqentially chosen breakpoints indicate that the cointegrating matrix has unstable rank parameter estimates of cointegrating vectors do not provide much support for the production smoothing model of inventories

ngos in bangladesh activities resources and governance summary this paper reports results from one of the first large nationally representative surveys of non governmental organizations ngos in a developing country the ngo sector in bangladesh is highly organized and relatively homogeneous most ngos utilize a branch and headquarters structure in which branches have limited autonomy from headquarters at the branch level most ngos in the country whether big or small focus on credit services derive more of their income from fees for services than from grants rely on salaried rather than voluntary staff keep detailed financial accounts that are externally audited and hire middle class college educated men as managers the convergence to a modal institutional form probably is the result of the persuasive power of ideas sociological pressures toward acculturation and conformity as well as material incentives

panel tests of stochastic convergence tfp transmission within manufacturing industries abstract this paper examines the international transmission of industry specific productivity shocks we demonstrate the limitations of panel unit root tests of stochastic convergence and propose an alternative method the data reject stochastic convergence displaying considerable heterogeneity in tfp movements within industries

patents as a measure of technology shocks and the aggregate u s labor market i introduction one of the dominant approaches to macroeconomic research in the past several decades has been the island paradigm of friedman 1968 and phelps 1970 in this framework economic agents operate under incomplete information regarding relative and absolute prices when making economic decisions this paradigm is used in the rational expectations literature see mccallum 1980 and the references therein in a market clearing framework to study among other things the effects of fiscal and monetary policies in aggregate economic systems this market clearing model is sufficiently popular that it is rare to find a textbook treatment of macroeconomics that omits this new classical model of the aggregate economy one component of this aggregate economic model is a labor market where nominal wages are flexible 1 this approach to the labor market was developed by lucas and rapping 1969 in their model it is assumed that labor suppliers operate under incomplete information about the aggregate price level thereby raising the possibility that output produced in the economy will vary with the level of price expectations 2 despite its central role in explaining economic fluctuations in a popular model of the economy there is surprisingly little evidence available in previous research testing the implications of this model of the labor market one objective of the present study is to provide some empirical evidence on this market clearing model of the labor market in carrying out such a test it will be necessary to provide an explanation for the nonstationary nature of labor market series such as real wages and employment one possible explanation for this apparent nonstationarity would be the technology shocks frequently used in the real business cycle literature e g long and plosser 1983 where it has often been assumed that these shocks are i 1 unobservable stochastic processes thus these shocks to the production function may be used as a way of explaining why macroeconomic time series are also i 1 a similar mechanism involves the possibly nonstochastic scalar preceding the aggregate production function in the economic growth literature this magnitude called the solow residual measures the growth in aggregate output that cannot be explained by the growth of quality adjusted factor inputs in production this residual is sometimes thought to be measured by the stock of knowledge used by economic agents barro and sala i martin 1995 p 351 increases in the stock of knowledge enable the aggregate economy to produce more goods and or new goods from quality adjusted resource levels when knowledge increases if the stock of knowledge is nonstationary then so too would be output and other magnitudes in an aggregate economy 4 thus the nonstationary nature of aggregate data can be explained by a nonstationary element of the aggregate production function whether stochastic or deterministic however that variable is interpreted if the sources of the apparent nonstationarity in macroeconomic data are assumed to be unobservable i 1 stochastic processes an implication of this fact is that the inability to measure technology shocks renders it impossible to test the implications of economic models that would arise if these shocks could be measured for example if technology shocks are i 1 then optimizing behavior by households and firms will result in cointegrating relationships between technology shocks and choice variables set by the public if it were possible to measure shocks to the production function one could test for these long run cointegrating relationships and the parameters of these cointegrating vectors could be estimated 5 in addition it is desirable to explicitly incorporate technical change into economic models if it could indeed be measured because doing so may result in more reliable estimates of structural parameters of economic interest and it may permit improved tests of economic hypotheses

convergence in oecd countries technical change efficiency and productivity the aim of this study is to analyse labour productivity convergence in the oecd countries over the period 1975 90 a nonparametric frontier approach is used to calculate the malmquist productivity index by breaking it down the contribution in the growth of labour productivity of technical progress of changes in efficiency and of the accumulation of inputs per worker are quantified unlike other studies the results obtained show that technical change has worked against labour productivity convergence since it has always been greater in the countries with higher labour productivity

farmer education and the weather evidence from taiwan 1976 1992 abstract this paper uses farm household and weather data from 1976 to 1992 in taiwan to measure the role of unusual weather conditions in explaining time and geographical variation of the return to education in farming based on a farm household model we show that the effect of education measured from an income function is both technical and allocative for a set of schooling variables this effect is found to increase with adverse weather it implies that education provides a higher relative advantage and therefore has a higher economic value when the environment is more unstable and more difficult to deal with this gives empirical support to the notion that education improves the capacity to adapt to change and disequilibria on top of its static technical effects

the role of subsidies in microfinance evidence from the grameen bank the grameen bank of bangladesh has been in the vanguard of the microfinance movement showing the potential to alleviate poverty by providing credit to poor house holds part of this success has been built on subsidies in 1996 for example total subsidies evaluated at the economic opportunity cost of capital amounted to about us 26 30 million the evidence helps to explain why institutions like grameen have not just sprung up on their own as private commercial ventures and it underscores the value of openly addressing the costs and benefits of subsidization the paper also describes recent difficulties in maintaining high repayment rates q 1999 elsevier science b v all rights reserved

microfinance and poverty evidence using panel data from bangladesh micro finance supports mainly informal activities that often have low market demand it may be thus hypothesized that the aggregate poverty impact of micro finance in an economy with low economic growth is modest or nonexistent the observed borrower level poverty impact is then a result of income redistribution or short run income generation the author addresses these questions using household level panel data from bangladesh the findings confirm that micro finance benefits the poorest and has sustained impact in reducing poverty among program participants it also has positive spillover impact reducing poverty at the village level but the effect is more pronounced in reducing extreme rather than moderate poverty

the long run implications of the production smoothing model of inventories an empirical test summary this paper provides an empirical test of the long run implications of the production smoothing model of inventories the dominant framework for inventory investment research in the past intertemporal models of a firm holding inventories of finished goods predict a long run relationship between inventories shipments factor input prices and the real interest rate which is tested here using cointegration test procedures these tests provide little support for the predictions of the production smoothing model in most of the data sets used test statistics indicate that inventories shipments factor input prices the nominal interest rate and the inflation rate maintain a long run equilibrium relationship but parameter estimates of cointegrating vectors are often implausible typically rejecting hypotheses implied by structural models of the production smoothing motive for holding inventories

potential pitfalls for the purchasing power parity puzzle sampling and specification biases in mean reversion tests of the law of one price the ppp puzzle is based on empirical evidence that international price differences for individual goods loop or baskets of goods ppp appear highly persistent or even nonstationary the present consensus is these price differences have a half life that is of the order of five years at best and infinity at worst this seems unreasonable in a world where transportation and transaction costs appear so low as to encourage arbitrage and the convergence of price gaps over much shorter horizons typically days or weeks however current empirics rely on a particular choice of methodology involving i relatively low frequency monthly quarterly or annual data and ii a linear model specification in fact these methodological choices are not innocent and they can be shown to bias analysis towards findings of slow convergence and a random walk intuitively if we suspect that the actual adjustment horizon is of the order of days then monthly and annual data cannot be expected to reveal it if we suspect arbitrage costs are high enough to produce a substantial band of inaction then a linear model will fail to support convergence if the process spends considerable time random walking in that band thus when testing for ppp or loop model specification and data sampling should not proceed without consideration of the actual institutional context and logistical framework of markets

the services sector in india s states a tale of growth convergence and trade india s success story in services is well documented at the national level but similar literature does not exist for india s states we bridge this gap by studying india s services growth at the sub national level contrary to earlier commentary on the unsustainability of india s services growth process our findings suggest that per capita services may be converging across indian states this is not true of per capita income unlike previous studies on india evidence is provided using both traditional sigma and beta convergence measures and advanced panel unit root tests from the recent econometrics literature a disaggregated analysis of services sectors reveals convergence in railways public administration and financial services finally a jensen and kletzer approach to determine tradability and an additional original methodology provide evidence of most services being traded across india s states suggesting the role of such trade in the services growth story even at the sub national level

are real gdp levels nonstationary evidence from panel data tests potential nonstationarity of important macroeconomic variables and unit root tests are now a standard procedure in empirical analyses while there are many findings of unit roots in macroeconomic variables using the popular augmented dickey and fuller 1979 test this test has low power against near unit root alternatives recently panel data procedures have been proposed as an avenue to increased power this paper applies panel unit root tests to international real gdp and real gdp per capita data the results overwhelmingly indicate that international real gdp and real gdp per capita levels are nonstationary

are real exchange rates nonstationary evidence from a panel data test it is well documented that real exchange rates between the united states and many industrialized countries in the post bretton woods period are integrated this result implies that purchasing power parity ppp does not hold even as a long run relationship this paper demonstrates that the failure to reject the unit root hypothesis may result from the low power of existing univariate test procedures i test for unit roots in real exchange rates by employing a more powerful panel based procedure using both cpi and wpi real dollar exchange rate data i strongly reject the null hypothesis of a unit root my results provide overwhelming support for the long run ppp under the current float copyright 1996 by ohio state university press

some consequences of temporal aggregation in empirical analysis i derive the generating mechanism of a temporally aggregated process when the disaggregated one belongs to the vector autoregressive integrated moving average class i then study the effects of temporal aggregation on a set of characteristics of usual interest such as exogeneity causality cointegration and common features an empirical example with canadian interest rates illustrates the main issues

expanding credit access using randomized supply decisions to estimate the impacts expanding access to commercial credit is a key ingredient of financial development strategies there is less consensus on whether expanding access to consumer credit helps borrowers particularly when loans are extended at high interest rates popular skepticism about unproductive usurious lending is fueled by research highlighting behavioral biases that may induce overborrowing we estimate the impacts of expanding access to consumer credit at a 200 annual percentage rate apr using a field experiment and follow up data collection the randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes there is also some evidence that the loans were profitable the author 2009 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

high frequency trading and extreme price movements abstract are endogenous liquidity providers elps reliable in times of market stress we examine the activity of a common elp type high frequency traders hfts around extreme price movements epms we find that on average hfts provide liquidity during epms by absorbing imbalances created by non high frequency traders nhfts yet hft liquidity provision is limited to epms in single stocks when several stocks experience simultaneous epms hft liquidity demand dominates their supply there is little evidence of hfts causing epms

productivity across industries and countries time series theory and evidence the authors examine whether convergence in aggregate productivity is also occurring at the industry level in fourteen oecd countries from 1970 to 1987 using both cross section and time series methods they find convergence in some sectors such as services however surprisingly the authors find that convergence does not hold for the manufacturing sector decomposing aggregate convergence into industry productivity gains and changing sectoral shares of output they find the service sector to be responsible for the bulk of cross country convergence to the united states the authors develop a new result on the asymptotic normality of panel unit root estimators to formally test within sector convergence copyright 1996 by mit press

labour force ageing and productivity performance in canada abstract this paper studies the direct impact of labour force ageing on productivity growth in 10 canadian provinces over the period 1981 2001 with an outlook to 2046 it shows that older workers are on average less productive than younger workers and that labour force ageing has a modest negative direct impact on productivity growth in canada the impact has increased since the middle of the 1990s will peak in 2001 11 and tail off afterwards during the peak period productivity growth in canada will be reduced by 0 13 to 0 23 percentage points per year with newfoundland being hit the hardest jel classification j21 o47

those who know most insider trading in eighteenth century amsterdam this paper studies how private information is incorporated into prices using a unique setting from the eighteenth century that is closer to stylized models of price discovery than modern day markets specifically the paper looks at english securities traded in both london and amsterdam private information reached amsterdam through sailing boats that sailed only twice a week and in adverse weather could not sail at all results are consistent with a kyle model in which informed agents trade strategically most importantly the speed of information revelation in amsterdam depended on the expected time until the private signal would become public

productivity development in icelandic norwegian and swedish fisheries this article analyses the total factor productivity tfp performance of fisheries in iceland norway and sweden during the period 1973 to 2003 we measure tfp growth using real gross value added as output and capital input labour input and a stock input index based on the major fish stocks in developed neighbouring countries we expect rapid diffusion of fishing technology innovations contributing to productivity convergence in addition innovations in the public regulation and the industrial organization may also have influenced productivity growth during the period we find that iceland had the highest annual tfp growth accounting for stock changes it amounts to 3 while the corresponding figures for sweden and norway are 2 8 and 0 8 respectively despite best practice fishing technologies being widely available we find no evidence of productivity convergence among the three countries

microfinance mission drift summary claims have been made that microfinance institutions mfis experience mission drift as they increasingly cater to customers who are better off than their original customers we investigate mission drift using average loan size as a main proxy and the mfis lending methodology main market and gender bias as further mission drift measures we employ a large data set of rated multi country mfis spanning 11 years and perform panel data estimations with instruments we find that the average loan size has not increased in the industry as a whole nor is there a tendency toward more individual loans or a higher proportion of lending to urban costumers regressions show that an increase in average profit and average cost tends to increase average loan and the other drift measures more focus should be given to cost efficiency in the mfi

hysteresis in unemployment empirical evidence from taiwan s region data based on panel unit root tests in this study we test the hysteresis hypothesis in unemployment for taiwan s 21 regional data sets using the levin et al 2002 im et al 2003 and taylor and sarno 1998 panel based unit root tests for the june 1993 to september 2001 period the results from all three tests provide evidence that based on taiwan s regional unemployment data the hysteresis hypothesis can justifiably be rejected

the temporal price relationship between s p 500 futures and the s p 500 index this paper empirically examines the intraday price relationship between s p 500 futures and the s p 500 index using minute to minute data three stage least squares regression is used to estimate lead and lag relationships with estimates for expiration days of the s p 500 futures compared with estimates for days prior to expiration the results suggest that futures price movements consistently lead index movements by twenty to forty five minutes while movements in the index rarely affect futures beyond one minute

a further analysis of the lead lag relationship between the cash market and stock index futures market the intraday lead lag relation between returns of the major market cash index and returns of the major market index futures and s p 500 futures is investigated empirical results show strong evidence that the futures leads the cash index and weak evidence that the cash index leads the futures the asymmetric lead lag relation holds between the futures and all component stocks including those that trade in almost every five minute interval evidence indicates that when more stocks move together market wide information the futures leads the cash index to a greater degree this suggests that the futures market is the main source of market wide information article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

multi factor agricultural productivity efficiency and convergence in botswana 1981 1996 abstract this paper applies the sequential malmquist index to calculate multi lateral multi factor productivity mfp indices for agriculture in the 18 districts and the commercial sector of botswana from 1981 to 1996 the mfp index grew at an average rate of 1 7 per annum led by the regions that specialize in livestock which grew at well over 3 per annum this growth was powered by technological change at 4 per year but offset by technical efficiency falling at 2 4 per annum as the commercial sector and the better regions exploited new technologies and infrastructure whereas the less productive areas fell further behind the best practice frontier thus convergence tests show that the gap between the more productive and the poorer regions widened

market making with costly monitoring an analysis of the soes controversy we develop a model of price formation in a dealership market where monitoring of the information flow requires costly effort the result is imperfect monitoring which creates profit opportunities for speculators who pick off stale quotes externalities associated with monitoring give rise to multiple equilibria in which dealers earn strictly positive expected profits we obtain various policy implications a switch to automatic execution can improve or worsen spreads and price discovery depending on the specific equilibrium a reduction in the minimum quoted depth tightens the spread but it reduces price efficiency our analysis is relevant for the soes controversy given that speculators in our model behave as the real world soes bandits our model predicts that soes bandits should trade in stocks with small spreads and that soes bandit activity should widen the spread we provide empirical evidence consistent with these predictions

technological change technological catch up and capital deepening relative contributions to growth and convergence we decompose labor productivity growth into components attributable to 1 technological change shifts in the world production frontier 2 technological catch up movements toward or away from the frontier and 3 capital accumulation movement along the frontier the world production frontier is constructed using deterministic methods requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections we analyze the evolution of the cross country distribution of labor productivity in terms of the tripartite decomposition finding that technological change is decidedly nonneutral and that both growth and bipolar international divergence are driven primarily by capital deepening jel o30 o47 d24

transitional dynamics in an r d based growth model with imitation comparing its predictions to the data abstract employing cross country data this paper evaluates the transitional dynamics predictions of a non scale growth model of endogenous technology innovation and imitation we show that unlike the neoclassical growth framework the transitional dynamics of the rd 1995 quartely journal of economics 110 641 680 with the importance of technology transfer

sources of productivity growth an empirical analysis with german sectoral data many theoretical analyses of the sources of economic growth focus on knowledge spillovers and scale economies to explain growth endogenously the contribution of this paper is to shed some light on these arguments by an empirical investigation based on a production function framework sectoral production functions are estimated with annual german data of 51 sectors from 1960 90 the estimates reveal that both a pure solow growth model and a solow model augmented with human capital cannot account for the observed productivity increases the model should be extended by allowing for inter industry spillovers and scale economies at the aggregate level as well as for scale economies associated with human capital at the sectoral level the business cycle affects observed productivity changes in the short run and in the long run

productivity growth in indian agriculture is there evidence of convergence across states this paper explores the question of convergence in total factor productivity tfp in agriculture across fourteen major agricultural states of india using a tornqvist theil index for tfp growth for the period 1973 1993 we find no evidence to support convergence to a single tfp level convergence after grouping the various states on the basis of their productivity performance we find that the high performing states show a gradual movement towards the trend whereas the low performing states generally show more volatility testing for long run convergence in levels of agricultural productivity we find evidence of conditional beta convergence after controlling for state specific factors and idiosyncratic year specific volatility the results are robust to alternative specifications of tests of unit root in panel data developed recently

panel unit root tests of purchasing power parity for price indices abstract this paper adopts four panel unit root tests to evaluate ppp over the floating period for six different price indices results generally support ppp albeit the speeds of adjustment differ considerably between price indices and test procedures the degree of contemporaneous and serial correlation as well as heterogeneity of the series in the panel affect stationarity and the speed of mean reversion

microfinance in times of crisis the effects of competition rising indebtedness and economic crisis on repayment behavior this paper analyzes repayment determinants for loans from caja los andes a bolivian mi crolender the analysis focuses on the influence of recent changes in the bolivian microfinance market in particular we examine the effects of the rapidly growing supply of funds for micro loans the increasing competition a rising level of indebtedness among micro entrepreneurs and the recent economic crisis our results show a two fold influence structure of competition and indebtedness firstly clients with loans from multiple sources at the same time are found to be more likely to default than others secondly clients with given characteristics have an overall better repayment behaviour in areas with higher competition and a higher supply of micro loans

good day sunshine stock returns and the weather psychological evidence and casual intuition predict that sunny weather is associated with upbeat mood this paper examines the relationship between morning sunshine in the city of a country s leading stock exchange and daily market index returns across 26 countries from 1982 to 1997 sunshine is strongly significantly correlated with stock returns after controlling for sunshine rain and snow are unrelated to returns substantial use of weather based strategies was optimal for a trader with very low transactions costs however because these strategies involve frequent trades fairly modest costs eliminate the gains these findings are difficult to reconcile with fully rational price setting

agriculture s terms of trade issues and implications the article addresses 1 the issue of what agricultural commodity prices should be compared to if we are concerned with the welfare of agriculturalists 2 the general absence of product quality adjustment when analysis is undertaken comparing agricultural to manufactured goods prices 3 the extent to which energy prices are or will be the driver of both manufactured and agricultural prices and 4 the importance of considering agriculture s terms of trade tot against the service sector since the service sector is typically the largest in the economy it reflects on the basic question of whether the widespread perception that agriculture s tot secularly decline is correct

what do nongovernmental organizations do nongovernmental organizations are one group of players who are active in the efforts of international development and increasing the welfare of poor people in poor countries nongovernmental organizations are largely staffed by altruistic employees and volunteers working towards ideological rather than financial ends their founders are often intense creative individuals who sometimes come up with a new product to deliver or a better way to deliver existing goods and services they are funded by donors many of them poor or anonymous yet these attributes should not be unfamiliar to economists development ngos like domestic nonprofits can be understood in the framework of not for profit contracting it is easy to conjure up a glowing vision of how the efforts of ngos could focus on problem solving without getting bogged down in corruption or bureaucracy but the strengths of the ngo model have some corresponding weaknesses in agenda setting decision making and resource allocation we highlight three factors in explaining the increased presence of ngos in the last few decades a trend towards more outsourcing of government services new ventures by would be not for profit entrepreneurs and the increasing professionalization of existing ngos

productivity convergence in oecd manufacturing industries the extent of and convergence of average labor productivity across manufacturing industries in 18 oecd countries over the period 1972 1992 shows large inter industry differences one reason for these differences is knowledge and capital barriers preventing the occurrence of catch up we find the level of average labor productivity as a proxy for these barriers is correlated with the extent of convergence

do weather induced moods affect the processing of earnings news we investigate whether unpleasant environmental conditions affect stock market participants responses to information events we draw from psychology research to develop a new prediction that weather induced negative moods reduce market participants activity levels exploiting geographic variation in equity analysts locations we find compelling evidence that analysts experiencing unpleasant weather are slower or less likely to respond to an earnings announcement relative to analysts responding to the same announcement but experiencing pleasant weather price association tests find evidence consistent with reduced activity due to weather induced moods delaying equilibrium price adjustments following earnings announcements we also use our analyst based research design to re examine an existing prediction that unpleasant weather induces investor pessimism and find evidence of both analyst pessimism and reduced activity in the presence of unpleasant weather together our study provides new evidence that both extends and reaffirms findings of a relation between unpleasant weather and market activities and contributes to the broader psychology and economics literature on the impact of weather induced mood on labor productivity this article is protected by copyright all rights reserved

the relationship between waste paper and other inputs in the swedish paper industry a number of life cycle assessment studies havecompared the environmental impacts of materialrecycling and incineration of waste paper theyhave shown that in most cases a recyclingscenario results in lower total energy use butgreater use of fossil fuels if waste paper andfossil fuels are complements parts of theenvironmental argument for recycling isabolished this paper estimates a cost functionfor the swedish paper industry if the costshares are co integrated an error correctionmodel will be used to model the dynamics short and long run elasticities are thencalculated to address the relationship betweenwaste paper and the other inputs capital labor purchased pulp fiber fossil fuels andelectricity contrary to the life cycleassessment studies the results show that wastepaper and fossil fuels are substitutes andthat waste paper and electricity arecomplements

resource use and technological progress in agriculture a dynamic general equilibrium analysis we analyze the global effects of economic and population growth and the impact of a slowdown in agricultural total factor productivity tfp on agriculture and forest resources using a dynamic multi region computable general equilibrium model with land use and cover detail given the current consensus about the growth of the world economy our results suggest that food security will not be threatened and agricultural activities will not encroach on forest resources over the next decade a slowdown in agricultural tfp growth might lead to higher crop prices in all regions with south east asia facing the steepest increases a slowdown in agricultural tfp growth also might be accompanied by higher conversion rates of forestland to farmland as well as by greater environmental or ecological damages on the remaining forestland

every cloud has a silver lining fast trading microwave connectivity and trading costs modern markets are characterized by speed differentials with some traders being fractions of a second faster than others theoretical models suggest that such differentials may have both positive and negative effects on liquidity and gains from trade we examine these effects by studying a series of exogenous weather episodes that temporarily remove the speed advantages of the fastest traders by disrupting their microwave networks the disruptions are associated with lower adverse selection and lower trading costs in additional analysis we show that the long term removal of speed differentials results in similar effects and also increases gains from trade

sectoral regularities of productivity growth in developing countries a kaldorian interpretation this paper provides a kaldorian interpretation for empirical regularities of product ivity growth at the sectoral level of the economy the statistical evidence is based on a dataset drawn from internationally compatible time series for employment and value added in 30 developing countries based on novel non linear statistical techniques the findings show i a regular pattern of positive sectoral employment elasticities with respect to output growth ii robust differences across sectors in the magnitude of the employment elasticities and iii employment elasticities for all sectors that are signifi cantly less than unity suggesting strong evidence for increasing returns at the sector level of the economy

effects of microcredit and other loans on female empowerment in bangladesh the borrower s gender influences intra household resource allocation this article examines microcredit s effectiveness in empowering women borrowers in rural bangladesh it does so by examining how gender specific borrowing activities influence household expenditures which are either specifically of interest to men or women and by examining the effects of all loans rather than only those provided by microcredit organizations the article uses a quasi experimental design to identify the effects of borrowing by men and women by using an original combination of panel data and instrumental variables on subsamples of the surveyed population it finds that the borrower s gender affects how households allocate their resources to different expenditure items and assets that are valued differently by men and women in all the findings suggest that providing greater credit access to women may improve their household bargaining positions

the challenge of rural financial inclusion evidence from microfinance financial inclusion is said to foster development and growth however progress in financial inclusion has been slow in rural areas where poverty is most pronounced this is often attributed to hig

how rising competition among microfinance institutions affects incumbent lenders this article uses data from uganda s largest incumbent microfinance institution to analyse the impact of entry by competing lenders on client behaviour we observe that rising competition does not lead to an increase in client dropout rate but induces a decline in repayment performance and savings deposited with the incumbent suggesting rising multiple loan taking by clients this joint effect on dropout and repayment is consistent with some negative information about clients and is being shared across lenders however the observed decline in repayment rates in a context of rising multiple loan taking shows that information sharing about clients is far from complete

aggregation unit roots and the time series structure of manufacturing real wages the effects of both temporal and cross sectional aggregation on the estimated time series characteristics of manufacturing real wage data are examined the effects especially of temporal aggregation are found to be quite large and in accord with statistical theory the well known results of j altonji and o ashenfelter 1980 that real wages are a random walk and of c r nelson and c i plosser 1982 that real wages are an ima 1 1 process both seem to be entirely artifacts of temporal aggregation with the true models following processes that are much more complex and that display substantial cyclical behavior copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

are differences in firm size transitory or permanent an erratum for this article has been published in journal of applied econometrics 18 2 2003 249 previous empirical work on corporate growth rates using cross section or short panel econometric techniques suggests that growth rates are random but that some degree of mean reversion exists this means that size differences between firms are transitory another more natural way to explore the long run distribution of firm sizes is to examine data on the growth of particular firms over long periods of time using a sample of 147 uk firms observed continually for more than 30 years our conclusions are that growth rates are highly variable over time and that differences in growth rates between firms do not persist for very long further firms show no tendency to converge to either a common size or to a pattern of stable size differences over time these results are compared and contrasted with standard approaches that suggest that firms reach and maintain stable positions in a skewed size distribution copyright 2002 john wiley sons ltd

a time series analysis of real wages consumption and asset returns summary this paper re examines whether the time series properties of aggregate consumption real wages and asset returns can be explained by a neoclassical model previous empirical rejections of the model have suggested that the optimal labour contract model might be appropriate for understanding the time series properties of the real wage rate and consumption we show that an optimal contract model restricts the long run relation of the real wage rate and consumption we exploit this long run restriction cointegration restriction for estimating and testing the model using ogaki and park s 1989 cointegration approach this long run restriction involves a parameter that we call the long run intertemporal elasticity of substitution ies for non durable consumption but does not involve the ies for leisure this allows us to estimate the long run ies for non durable consumption from a cointegrating regression tests for the null of cointegration do not reject our model as a further analysis our estimates of the long run ies for non durable consumption are used to estimate the discount factor and a coefficient of time nonseparability using hansen s 1982 generalized method of moments we form a specification test for our model a la hausman 1978 from these two steps this specification test does not reject our model this paper re examines whether the time series properties of aggregate consumption real wages and asset returns are consistent with a simple neoclassical representative agent economy previous empirical explorations of this issue have rejected the neoclassical model in large part because the marginal rate of substitution between consumption and leisure does not equal the real wage as is implied by the the first order conditions of the model in this paper we argue that an optimal labour contracting model is more appropriate for understanding the time series behaviour of real wages and consumption we show that a version of the optimal contract model restricts the long run relation between real wages and consumption we exploit this longrun restriction ri cointegration restriction to estimate preference parameters and test the model first we employ the cointegration approach suggested by ogaki and park 1989 to estimate the long run intertemporal elasticity of substitution for non durable consumption from a cointegrating regression we test the model by testing for the cointegration restriction

do all countries grow alike abstract this paper investigates the driving forces of output change in 77 countries during the period 1970 2000 a flexible modeling strategy is adopted that accounts for i the inefficient use of resources and ii different production technologies across countries the proposed model can identify technical efficiency and input change for each of three endogenously determined regimes membership in these regimes is estimated rather than determined ex ante this framework enables explorations into the determinants of output growth and convergence issues in each regime

the evolving role of agriculture in poverty reduction an empirical perspective abstract the role of agriculture in development remains much debated this paper takes an empirical perspective and focuses on poverty as opposed to growth alone the contribution of a sector to poverty reduction is shown to depend on its own growth performance its indirect impact on growth in other sectors the extent to which poor people participate in the sector and the size of the sector in the overall economy bringing together these different effects using cross country econometric evidence indicates that agriculture is significantly more effective in reducing poverty among the poorest of the poor as reflected in the 1 day squared poverty gap it is also up to 3 2 times better at reducing 1 day headcount poverty in low income and resource rich countries including those in sub saharan africa at least when societies are not fundamentally unequal however when it comes to the better off poor reflected in the 2 day measure non agriculture has the edge these results are driven by the much larger participation of poorer households in growth from agriculture and the lower poverty reducing effect of non agriculture in the presence of extractive industries

designing credit agent incentives to prevent mission drift in pro poor microfinance institutions abstract credit agents in microfinance institutions mfis must be given incentives to acquire information on potential borrowers and select them in accordance with the mfi s objectives we show that while giving incentives has no cost in for profit mfis it is costly in pro poor mfis when repayment and wealth are positively correlated a pro poor mfi cannot obtain the selection of poor clients in the proportion it wishes with incentives based solely on repayment it then becomes necessary to audit the share of very poor borrowers selected by an agent in order to provide the latter with adequate incentives when audit costs are large pro poor mfis may have to forego selection on wealth and use other targeting devices such as working in impoverished geographical locations driven by donor concerns with mission drift away from the poor audits on the wealth status of clients have been introduced at the level of mfis we show that introducing pro poor incentives requires extending such audits to the level of credit agents

convergence in u s productivity growth for agriculture implications of interstate research spillovers for funding agricultural research state crop livestock and aggregate agricultural total factor productivity tfp data 1950 82 are examined for evidence of convergence to a single tfp level convergence or to a steady state rate of growth or conditional convergence our empirical results do not support convergence but do support convergence the rate of convergence is variable and depends on research and development r d spillins from other states private r d and farmers schooling the finding of strong positive interstate spillover effects implies that independent state planning of agricultural research is inefficient and cooperation across states boundaries including establishment of new political jurisdictions for financing public agricultural research can enhance efficiency

unbiased estimation of the half life to ppp convergence in panel data three potential sources of bias introduce complications for panel data estimation of the half life of purchasing power parity deviations they are bias induced by inappropriate cross sectional aggregation of heterogeneous coefficients small sample estimation bias of dynamic lag coefficients and bias induced by time aggregation of commodity prices all of these biases have been addressed individually in the literature in this paper we address all three biases in arriving at our estimates using an annual panel data set of cpi based real exchange rates for 21 oecd countries from 1973 to 1998 we obtain a point estimate of the unbiased half life of 3 0 years with a 95 confidence interval of 2 3 4 2 years

do rural banks matter evidence from the indian social banking experiment lack of access to finance is often cited as a key reason why poor people remain poor this paper uses data on the indian rural branch expansion program to provide empirial evidence on this issue between 1977 and 1990 the indian central bank mandated that a commercial bank can open a branch in a location with one or more bank branches only if it opens four in locations with no bank branches we show that between 1977 and 1990 this rule caused banks to open relatively more rural branches in indian states with lower initial financial development the reverse is true outside this period we exploit this fact to identify the impact of opening a rural bank on poverty and output our estimates suggest that the indian rural branch expansion program significantly lowered rural poverty and increased non agricultural output

us regional income convergence a spatial econometric perspective rey s j and montouri b d 1999 us regional income convergence a spatial econometric perspective reg studies 33 143 156 this study reconsiders the question of us regional economic income convergence from a spatial econometric perspective recently developed methods of exploratory spatial data analysis provide new insights on the geographical dynamics of us regional income growth patterns over the 1929 94 period strong patterns of both global and local spatial autocorrelation are found throughout the study period and the magnitude of global spatial autocorrelation is also found to exhibit strong temporal co movement with regional income dispersion a spatial econometric analysis of the familiar baumol specification reveals strong evidence of misspecification due to ignored spatial error dependence because of this dependence shocks originating in one state can spillover into surrounding states potentially complicating the transitional dynamics of the convergence process rey s j et montouri

unit root tests on real wage panel data for the g7 abstract using a unit root test for panel data we find that real wage innovations in most g7 economies are temporary rapidly mean reverting and have no permanent component results are sensitive to an identical cross equation restriction on all series

on the relationship between inflation persistence and temporal aggregation this paper examines the impact of temporal aggregation on alternative definitions of inflation persistence using the cpi and the core pce deflator of the united states our results show that temporal aggregation from the monthly to the quarterly to the annual frequency induces persistence in the inflation series

real convergence in europe how robust are econometric inferences the paper examines the convergence properties of productivity in fifteen european countries over the period 1960 1997 european productivity is estimated using modified translog production systems with a completely general intertemporal structure to capture the notion that trade may have an influence on aggregate convergence imports are included in the production function stationarity tests are used to test for convergence around a common long run trend including unit root tests the kpss and bayesian tests as well as testing based on fractional differencing parameter estimation for long memory models it is found that convergence inferences are sensitive to the type of test employed

productivity growth and convergence in crop ruminant and non ruminant production measurement and forecasts there is considerable interest in projections of future productivity growth in agriculture whether one is interested in the outlook for global commodity markets future patterns of international trade or the interactions between land use deforestation and ecological diversity the rate of productivity growth in agriculture is an essential input yet solid projections for this variable have proven elusive particularly on a global basis this is due in no small part to the difficulty in measuring historical productivity growth the purpose of this paper is to report the latest time series evidence on total factor productivity growth for crops ruminants and non ruminant livestock on a global basis we then follow with tests for convergence amongst regions providing forecasts for farm productivity growth to the year 2040 the results suggest that most regions in the sample are likely to experience larger productivity gains in livestock than in crops within livestock the non ruminant sector is expected to continue to be more dynamic than the ruminant sector given the rapid rates of productivity growth observed recently non ruminant and crop productivity in developing countries may be converging to the productivity levels of developed countries for ruminants the results show that productivity levels may be diverging between developed and developing countries