direct payments spatial competition and farm survival in norway we argue that farm survival is influenced by neighboring farmers characteristics and in particular by the direct payments neighboring farmers receive the article shows empirically that these interdependencies are crucial for an assessment of the effects of direct payments on farm survival using spatially explicit farm level data for nearly all norwegian farms a spatial probit model is estimated to explain farm survival from 1999 to 2009 controlling for spatial farm interdependence we show that ignoring spatial interdependencies between farms leads to a substantial overestimation of the effects of direct payments on farm survival to our knowledge this article is the first attempt to empirically analyze the importance of neighboring interdependencies for the effects of direct payments on farm survival

garch inadequacy for modelling exchange rates empirical evidence from latin america this article checks for the adequacy of using garch models in exchange rate series using the hinich portmanteau bicorrelation test we find that a garch formulation or any of its variants fails to capture the data generating process of the main latin american exchange rates our results highlight the potential of having misleading public policy when estimates are based in garch types of models this article also complements recent similar findings encountered in european and asian economies

the long run and short run impact of captive supplies on the spot market price an agent based artificial market an agent based model is developed that matches the results of xia and sexton 2004 as well as our generalization of their model we relax xia and sexton s assumption of no supply response by captive feeders which reduces the price depressing effect of captive supplies finally the agent based model is used to simulate packers choosing both captive supply quantities and spot market quantities packers in the relaxed agent based model choose no captive supplies and thus reach the cournot solution the research narrows the gap between theoretical models and the empirical work on captive supplies that shows little effect on prices but a gap remains

how traders influence their neighbours modelling social evolutionary processes and peer effects in agricultural trade networks abstract marketing channel choices in agricultural trade networks affect the networks overall performance and influence rural livelihoods this study identifies key determinants of these choices among natural rubber traders in indonesia to evaluate four policy scenarios and their potential effects on rural incomes since traders marketing decisions are based on past interactions resulting trade networks are formed in recursive processes and can be understood as complex adaptive systems due to inherent endogeneity in these systems process based approaches such as agent based modelling abm can be effective in understanding them using a self gathered primary dataset from jambi province indonesia we implement and parameterise an abm to simulate the formation of the rubber trading network and analyse the effects on rural livelihoods of four hypothetical policy scenarios improved micro credit availability increased access to education better infrastructure and transportation capacity and market information availability the model is calibrated through a genetic algorithm which maximises the similarity between the simulated network and the actual network observed in the data results indicate that sellers decisions on a buyer are primarily determined by debt obligations and past peer interactions the most influential sellers have a similar level of formal education as their peers and live in close physical proximity results of the policy scenario analysis suggests that policies aimed at reducing sellers dependence on credit from buyers and increasing education are the most effective policies for improving value chains and reducing poverty in the region under consideration

structural estimation and the border puzzle abstract we revisit anderson and van wincoop s anderson james and eric van wincoop 2003 gravity with gravitas a solution to the border puzzle american economic review 93 170 192 claim that structural estimation solves the u s canadian border puzzle we find this claim tenuous as the proposed solution attributes to structural estimation the effects of added u s data and an assumption that u s and canadian border costs are symmetric estimated canadian and u s multilateral resistance measures which are the foundation of anderson and van wincoop s argument depend critically on the symmetric costs assumption even accepting symmetry we show that structurally consistent estimates of the canadian border effect are only marginally smaller than the ols estimates when we exclude the arguably non comparable u s data

revisiting purchasing power parity for african countries with nonlinear panel unit root tests this study applies panel seemingly unrelated regressions sur kapetanios et al kapetanios shin snell kss surkss tests proposed by wu and lee 2009 to investigate the properties of long run purchasing power parity ppp in 15 african countries the empirical results from the univariate unit root and panel based unit root tests indicate that ppp does not hold for these 15 countries under study however panel surkss tests indicate that ppp is valid for four of these 15 countries these results have important policy implications for these 15 african countries under study

nonlinear dynamics in deviations from the law of one price a broad based empirical study abstract in this paper we test empirically the validity of the law of one price using data for five major bilateral us dollar exchange rates and nine goods sectors during the recent floating exchange rate regime since the early 1970s using threshold autoregressive models we find strong evidence of nonlinear mean reversion in deviations from the law of one price with plausible convergence speeds consistent with theoretical arguments on international goods markets arbitrage under transactions costs and with an emerging strand of empirical literature these results contribute towards forming a consensus view in favor of discrete regime switching in deviations from the law of one price and the presence of differing nonzero transactions costs across a broad range of goods and countries

are asian real exchange rates stationary by applying the newly developed nonlinear stationary test advanced by kapetanios et al journal of econometrics 112 2003 359 in examining the stationary property of 11 asian real exchange rates this paper rejects unit root in 8 us dollar based and 6 japanese yen based rates whereas the augmented dickey fuller adf test has led to no rejection at all

the gravity model an illustration of structural estimation as calibration dawkins srinivasan and whalley calibration handbook of econometrics 2001 propose that estimation is calibration we illustrate their point by examining a leading econometric application in the study of international and interregional trade by anderson and van wincoop gravity with gravitas a solution to the border puzzle american economic review 2003 we replicate the econometric process and show it to be a calibration of a general equilibrium model our approach offers unique insights into structural estimation and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis jel f10 c13 c60 i introduction contemporary economic analysis includes two broad traditions of fitting models to data many estimate stochastic theory based reduced forms with few parameters while others calibrate models by an extensive collection and computation of consistent fitted values although the first technique is called estimation and the second calibration these exercises are identical under consistent identifying assumptions both calibration and estimation fit a model to data dawkins srinivasan and whalley 2001 make this point succinctly calibration is estimation estimation is calibration the point is widely recognized in the macroeconomic real business cycle literature hoover 1995 our purpose is to demonstrate that it is equally relevant to micro based general equilibrium models in our view there is too little communication between calibrators and estimators of such models and the lack of communication impedes research it is important to clearly delineate the processes of data fitting and the subsequent model analyses in analysis of fitted models the degree of concentration on counterfactual simulation versus hypothesis testing around specific parameters often cleaves with our respective notions of calibration and estimation but counter examples are easily found sensitivity analysis found in computable general equilibrium cge studies can be specifically designed to generate higher order moments to facilitate hypothesis testing 1 many econometric studies are specifically focused on model identification for the purpose of counterfactual simulation 2 a more informative distinction might be drawn between testing models and calibrating models hoover 1995 places this issue at the heart of the macroeconomic debate surrounding real business cycle models we see a direct extension of the macroeconomic debate into any empirical methodology that involves general equilibrium systems in the testing paradigm stochastic measures of fit provide a critically important benchmark for evaluating alternative structural assumptions or analytical results derived from a particular set of assumptions when the objective is to provide a quantitative context for counterfactual analysis traditional measures of fit are little more than indicators of parsimony one example of the macroeconomic debate spilling over to the empirical literature is forwarded by learner and levinsohn 1995 who advise us to estimate don t test the point being that falsifiable theories are informative conceptually and empirically in the context of estimating as opposed to testing some researchers find it preferable to exhaust the degrees of freedom available in the data by expanding the set of structural parameters this results in a calibrated model that perfectly fits the benchmark observation but requires external information on how it will respond to shocks model responses are usually summarized in a set of elasticity assumptions econometric estimation does not exhaust the degrees of freedom and may focus on internal measurements of response parameters there also seems to be convergence in the empirical international trade literature some calibrators of traditional general equilibrium simulation models attempt to identify response parameters e

diffusion and spillover of new technology a heterogeneous agent model for cassava in west africa understanding what determines the geographic spread of innovations can help guide the funding and implementation of research and extension programs our approach uses household survey data as model parameters to simulate behavior across the entire surveyed population and avoid the aggregation bias associated with representative farm models such a heterogeneous agent approach allows us to infer the distribution of a technology s impacts across one set of households and predict the potential for spreading to another set that shares similar characteristics with respect to natural resource endowments and farming systems we apply the technique to new cassava varieties in west africa finding a strongly poverty alleviating impact with substantial spillover potential from nigeria to neighboring countries

which factors influence the expansion of bioenergy an empirical study of the investment behaviours of german farmers the german government is planning to increase the share of renewable energy sources in this context it is important to understand the decision making behaviour of farmers regarding investments in renewable energy systems that generate energy from biomass and farmers reactions to investment support measures to study this behaviour we conduct a survey and confront farmers with a hypothetical opportunity to invest in a biogas plant our findings reveal that farmers have heterogeneous investment thresholds their investment decisions are mainly driven by capital costs and the subjective perception of the risk resulting from the investment other decision parameters like sustainability and non monetary objectives that are also examined in this paper play only minor roles however bounded rationality is an important factor moreover the influence of an investment subsidy was analysed only about half of the amount of the subsidy as expected according to normative forecast models is reflected in an increased willingness to invest furthermore farmers who have previously invested in bioenergy plants show lower investment thresholds and have stronger reactions to the subsidy regarding the expansion of renewable energies these findings are meaningful for policy impact analysis

nonlinear adjustment to purchasing power parity in the post bretton woods era abstract this paper models the dynamics of adjustment to long run purchasing power parity ppp over the post bretton woods period in a nonlinear framework consistent with the presence of frictions in international trade we estimate exponential smooth transition autoregressive estar models of deviations from ppp which are obtained using the johansen cointegration method for both consumer price index cpi and wholesale price index wpi based measures and a broad set of us trading partners in several cases we find clear evidence of a mean reverting dynamic process for sizable deviations from ppp with the equilibrium tendency varying nonlinearly with the magnitude of disequilibrium analysis of impulse response functions also supports a nonlinear dynamic structure but convergence to long run ppp in the post bretton woods era is very slow

the black market exchange rate vs the official rate in testing ppp which rate fosters the adjustment process abstract in testing the purchasing power parity theory ppp researchers hardly pay attention to the speed with which the exchange rate adjusts to a change in relative prices in this paper we show that the speed of adjustment is faster when the black market exchange rate is used in testing the ppp as compared to the official exchange rate this could be another reason as to why central banks should unify the two rates

the economic significance of national border effects to address the economic significance of national border effects this paper provides evidence on two fundamental questions 1 do large border effects arise because of high perceived price wedges between foreign and domestic products or because imports and domestic goods are very close substitutes and 2 if price wedges are important do they reflect distortionary barriers to trade or do they arise from nondistortionary factors such as differences in transactions costs or product characteristics i conclude that while border effects may imply barriers welfare costs and a role for policy distortions are probably not as substantial as initial border results suggested jel f1

are fluctuations in oil consumption permanent or transitory evidence from linear and nonlinear unit root tests abstract this paper examines the integration properties of the total oil consumption in 57 countries for the period of 1965 2012 a combination of new and powerful linear and nonlinear stationarity tests are employed to achieve the objectives of the study we find that the oil consumption series in 21 countries follow a nonlinearity path while those in the other countries are linear in nature evidence of the presence of a unit root is found for the total oil consumption series in 38 countries while the series is stationary in the remaining 19 countries an important insight is that the blueprints that were designed to reduce oil consumption are likely to have a permanent effect in most of the countries

modelling land use deforestation and policy a hybrid optimisation heterogeneous agent model with application to the bolivian amazon abstract we introduce a hybrid simulation model simpachamama designed to explore the complex socio environmental trade offs of alternative policy bundles and policy sequencing options for stemming deforestation and reducing poverty in tropical countries designed and calibrated to the initial conditions of a small forest village in rural bolivia the model consists of a an optimising agricultural household module of heterogeneous agents that make individually optimal land use decisions based on factor endowments and market conditions b an encompassing general equilibrium shell module that endogenously determines wages and links the agricultural labour market and rural urban migration rates and c a novel user controlled policy maker module that allows the user to make real time choices over a variety of public and environmental policies that in turn impact land use welfare and migration over a 20 year simulation period the results highlight trade offs between reductions in deforestation and improvements in household welfare that can only be overcome either when international redd payments are offered or when decentralized deforestation taxes are implemented the sequencing of policies plays a critical role in the determination of these results

does ppp hold in african countries further evidence based on a highly dynamic non linear logistic unit root test with a view to investigating whether the purchasing power parity ppp theory holds true for selected african countries during the january 1980 december 2003 period we employ a rigorous highly dynamic non linear logistic unit root test as first advanced by leybourne et al 1998 which is considerably more powerful than those tests traditionally used compared with the rejection of the null of the unit root process for only one of the 22 countries under study when we use the traditional adf pp kpss np and the df gls unit root tests with the leybourne et al 1998 test we strongly reject the null of the unit root process for a surprising six of the 22 countries these empirical results clearly indicate that ppp holds true for these six countries namely the central african republic the cote d ivoire kenya madagascar uganda and lesotho

long run purchasing power parity with asymmetric adjustment further evidence from african countries this study applies threshold cointegration test advanced by enders and siklos 2001 to investigate the properties of asymmetric adjustment in long run purchasing power parity ppp in 22 selected african countries during the period of january 1980 to december 2003 although there is evidence of long run ppp for most african countries the adjustment mechanism is asymmetric these results have particularly important policy implications for african countries

dealing with uncertainty in agent based simulation farm level modeling of adaptation to climate change in southwest germany climate change will most likely confront agricultural producers with natural economic and political conditions that have not previously been observed and are largely uncertain as a consequence extrapolation from past data reaches its limits and a process based analysis of farmer adaptation is required simulation of changes in crop yields using crop growth models is a first step in that direction however changes in crop yields are only one pathway through which climate change affects agricultural production a meaningful process based analysis of farmer adaptation requires a whole farm analysis at the farm level we use a highly disaggregated mathematical programming model to analyze farm level climate change adaptation for a mountainous area in southwest germany regional level results are obtained by simulating each full time farm holding in the study area we address parameter uncertainty and model underdetermination using a cautious calibration approach and a comprehensive uncertainty analysis we deal with the resulting computational burden using efficient experimental designs and high performance computing we show that in our study area shifted crop management time slots can have potentially significant effects on agricultural supply incomes and various policy objectives promoted under german and european environmental policy schemes the simulated effects are robust against model uncertainty and underline the importance of a comprehensive assessment of climate change impacts beyond merely looking at crop yield changes our simulations demonstrate how farm level models can contribute to a process based analysis of climate change adaptation if they are embedded into a systematic framework for treating inherent model uncertainty

the inadequacy of linear autoregressive model for real exchange rates empirical evidence from asian economies utilizing the formal linearity test of luukkonen saikkonen and terasvirta biometrika 75 491 499 1998 as diagnostic tool the empirical finding suggests that the linear autoregressive ar model is inadequate in describing the real exchange rates behaviour of 11 asian economies it is noted that the conventional battery of diagnostic tests is capable of identifying the inadequacy of the linear model in only three of these series moreover the linearity nature of this behaviour has been formally rejected in favour of the non linear smooth transition autoregressive star model the finding of non linearity in the data generating process of these real exchange rates warrants that the use of linear framework in empirical modelling and statistical testing procedures in the field of exchange rates may lead to an inappropriate policy conclusions

an exploration of livestock development policies in western china limited agricultural land potential poorly integrated markets and low rural incomes are all interrelated problems for agricultural households in western china within the wide range of development options available this paper focuses on the impact of forage growing subsidies and reducing livestock feed trade barriers on agricultural household incomes and enterprise mixes in the qingyang prefecture of gansu province china a heterogeneous agent model is used to assess the local consequences of these two policies data from a survey conducted in 2009 are used as inputs into the model the results indicate that a simultaneous reduction in livestock feed trade barriers and an introduction of forage growing subsidies lifts net household incomes by approximately 10 different scenarios have different impacts on incomes land allocation decisions and grain purchases with heterogeneity also found among household income responses livestock development policies have the potential to lift household incomes however there are tradeoffs between income and grain self sufficiency

purchasing power parity in less developed and transition economies a review paper abstract the concept of purchasing power parity ppp has been the subject of numerous studies many of which have been unable to prove conclusively this core principle of international finance although industrialized countries have received most of the attention studies that focus on less developed and transition economies have also attained mixed results this study surveys trends in this branch of the literature highlighting the econometric advances that have sought to solve this puzzle while pointing out that more needs to be done to address the reasons that might cause ppp not to hold

purchasing power parity with flexible fourier stationary test for central and eastern european countries this study applies stationary test with a fourier function proposed by enders and lee 2004 2009 to test the validity of long run purchasing power parity ppp to assess the nonstationary properties of the real exchange rate rer for seven central and eastern european countries ceecs we find that our approximation has higher power to detect u shaped breaks and smooth breaks than linear method if the true data generating process of exchange rate is in fact a stationary nonlinear process we examine the validity of ppp from the nonlinear point of view and provide robust evidence clearly indicating that the ppp holds true for all ceecs our findings point out their exchange rate adjustment is mean reversion towards ppp equilibrium values in a nonlinear way

was it real the exchange rate interest differential relation over the modern floating rate period in this paper we explore the relationship between real exchange rates and real interest rate differentials in the united states germany japan and the united kingdom contrary to theories based on the joint hypothesis that domestic prices are sticky and monetary disturbances are predominant we find little evidence of a stable relationship between real interest rates and real exchange rates we consider both in sample and out of sample tests one hypothesis that is consistent with our findings is that real disturbances such as productivity shocks may be a major source of exchange rate volatility this paper investigates the empirical relationship between major currency real exchange rates and real interest rates over the modern post march 1973 flexible rate experience the exchange rates examined here include the dollar mark dollar yen and dollar pound rates our two major findings are as follows first the data do not indicate a strong correspondence between real interest rate differentials short term or long term and real exchange rates this finding appears to conflict with the predictions of most monetary and portfolio balance models of exchange rate determination though the conflict can be substantially reconciled if aggregate disturbances are primarily real in nature i e changes in productivity tastes etc it is true that in many cases the sign of the estimated exchange rate interest rate differential relationship is consistent with the possible predominance of financial market disturbances but the relationship is not stable enough to be statistically significant second although one does find some evidence of a unit root in both real exchange rates and long term but not shortterm real interest differentials these two series do not appear to be linearly cointegrated hence the nonstationarity or near nonstationarity in the two series cannot be attributed to the same factor in section i we briefly describe a class of small scale monetary models of exchange rate determination the importance of this class of models for empirical work derives from its strong predictions about how the exchange rate will move

a note on efficiency of australian and new zealand stock markets in this article we re examine efficiency of the australia s and new zealand s stock markets extending recent work of narayan 2005 for this purpose we apply the nonlinear unit root test procedure recently developed by kapetanios et al 2003 the nonlinear unit root tests reject the null hypothesis of unit root suggesting that the both stock markets are not weak form efficient contrary to the findings of narayan 2005

modeling non linearities in real effective exchange rates abstract the aim of this paper is to test for and model non linearities in the real effective exchange rates of 10 major industrial countries the g 10 to exploit non linear dependencies in exchange rates we apply the star smooth transition autoregressive family of models these non linear models imply the existence of two distinct regimes in exchange rates with potentially different dynamic properties but the transition between the regimes is smooth tests reject linearity for eight exchange rates the real exchange rate process is cyclical in both regimes for almost all countries and there appears to be some evidence of asymmetry star models outperform hamilton s markov regime switching model in an out of sample forecasting contest

spot electricity price discovery in indian electricity market this paper investigates the spot electricity price discovery that exists among the five regions of indian electricity market using hourly spot electricity price data from 1st january 2014 to 31st december 2015 using augmented dickey fuller 1981 and narayan and popp 2010 unit root tests we find that the spot electricity prices for both peak and off peak hours across all the regions are stationary at level then by applying granger causality test for a reduced var model at level the results show that there hardly any causality exists between these electricity markets barring few regions though we did not find any causality between peak price and off peak price for all individual region but we formed two panels by using peak and off peak price data of all five regions our results showed short run and long run panel granger causality between peak price and off peak price the results of the study suggests that though india as a nation has all the regions inter connected with single frequency of power grid operation since 2008 however these markets are not highly integrated in comparison to electricity markets of developed nations around the world

smart policies to reduce pesticide use and avoid income trade offs an agent based model applied to thai agriculture abstract policy makers in developing countries need better evidence of how changes in pesticide regulation would affect pesticide reduction and farm incomes but there are very few modeling tools that can provide such information the present study develops a new model based on mathematical programming based multi agent system mpmas a simulation software that allows assessing ex ante the impact of alternative pesticide use reduction strategies including combinations of pesticide taxes the introduction of integrated pest management a price premium for safe agricultural produce and subsidies for biopesticides the model is parameterized with farm and plot level data from northern of thailand where the adoption of high value cash crops has been accompanied by a rapid increase in synthetic pesticide use simulation results suggest that a pesticide tax alone has little effect on synthetic pesticide use a smart policy package combining integrated pest management a progressive pesticide tax based on toxicity and subsidies lowering the price of biopesticides can reduce average use of hazardous pesticides by 34 over current levels without adverse effects on the average farm income

does structure matter the impact of switching the agricultural policy regime on farm structures abstract this paper investigates the relationship between structural change in agriculture and a policy regime switch at the regional level using the agent based spatial and dynamic simulation model agripolis we simulate structural change for two different farm structures in response to a policy change results show that structural adjustment differs depending on the initial structure

do real exchange rates follow a nonlinear mean reverting process in developing countries in an effort to fight relatively high inflation many developing countries try to manage their nominal exchange rates through official intervention in addition developing countries tend to have high transportation costs tariffs and nontariff barriers these factors are among the sources of generating nonlinearity in real exchange rates and hence some nonlinear adjustment toward purchasing power parity ppp in developing countries in this paper we employ monthly real effective exchange rate reer data of 88 developing countries and test the null of nonstationarity versus an alternative of linear stationarity by the means of a conventional unit root test and compare the results with those obtained from a new test in which the null is the same but the alternative hypothesis is nonlinear stationarity the latter test supports the ppp theory in more developing countries compared with the former test suggesting that nonlinear adjustment toward ppp in developing countries is an important phenomenon reported country characterizations indicate that reversion in reer occurs more often for high inflation countries and for countries with high flexibility in their exchange rates

long run purchasing power parity in the 1920s abstract this paper presents an empirical analysis of long run purchasing power parity ppp during the 1920s float using recently developed methodology on the cointegration of economic time series our results are generally supportive of ppp as a long run equilibrium condition on which exchange rates tended to converge over the period for dollar sterling however there is some evidence of a non stationary drift away from fundamentals during the last year or so before britain s return to the gold standard perhaps due to speculation our results also appear to reconcile some apparently conflicting evidence in the literature

characterizing nonlinearities in business cycles using smooth transition autoregressive models during the past few years investigators have found evidence indicating that various time series representing business cycles such as production and unemployment may be nonlinear in this paper it is assumed that if the time series is nonlinear then it can be adequately described by a smooth transition autoregressive star model the paper describes the application of these models to quarterly logarithmic production indices for 13 countries and europe tests reject linearity for most of these series and estimated star models indicate that the nonlinearity is needed mainly to describe the responses of production to large negative shocks such as oil price shocks

new evidence of regional income divergence in post reform russia this article investigates regional income convergence in russia during 2000 2008 we test the hypothesis in which income divergence across regions of the country should give place to income convergence as the country moves toward free market economy with strong market institutions the study contributes to the existing literature by using the exponential smooth autoregressive augmented dickey fuller adf unit root test in a panel setup a novel econometric technique which encompasses cross sectional dependence results show strong evidence of on going regional income divergence in post reform period

some new stylized facts of floating exchange rates abstract this paper re examines real exchange rate behavior of oecd currencies under the current float using the more extensive dataset that an additional decade s worth of experience has made available what emerges is a new set of stylized facts which suggest that the problems of the current float were not as commonly believed generic to that system but in fact rather specific being largely confined to one sub period the early and mid 1980s and one currency the us dollar this dollar behavior ranks as one of the important puzzles of the past 25 years

do exchange rates follow a random walk process in middle eastern countries abstract in this note we employ the kpss test in addition to the adf test to determine whether the real effective exchange rates in middle eastern countries follow a random walk process or they are stationary while in most cases the kpss test supported the stationary of the real effective rates thus the ppp the adf test did not the failure to support the ppp by the adf test is said to be due to its low power

assessing the benefits of trade facilitation a global perspective this paper estimates the relationship between trade facilitation and trade flows using a panel of disaggregated manufactured goods for the 2000 2001 period for 75 countries four categories of trade facilitation are defined measured and assessed for their impact on bilateral trade flows using a gravity model the four measures of trade facilitation are port infrastructure air and maritime customs environment regulatory environments and e business infrastructure the results suggest that raising global capacity halfway to the world average in the four areas would increase trade by 377 billion most regions of the world increase exports more than imports in large part this result stems from increased exports to oecd markets that is obtained through a country s own effort to improve ports customs regulations and services infrastructures in addition the results suggest that reform and capacity building in trade facilitation in areas related to gatt articles v viii and x that are under discussion at the world trade organisation could expand trade and exports significantly many of the reform measures necessary to achieve this goal need not necessarily require large scale investment projects but rather action in legal and administrative reform to facilitate trade

real exchange rates under the gold standard purchasing power parity is one of the most important equilibrium conditions in international macroeconomics empirically it is also one of the most hotly contested numerous recent studies for example have sought to determine the validity of purchasing power parity using data from the post bretton woods float and have reached different conclusions we assert that most such studies are flawed for two reasons first the post 1973 data contain by definition only a very limited amount of the low frequency information relevant for examination of long run parity second the dynamic econometric techniques used to model deviations from parity are typically quite crude with respect to admissible low frequency dynamics both deficiencies are rectified in the present paper with dramatic results we construct a new data set of 16 real exchange rates covering more than a century of the classic gold standard period and we study deviations from parity using long memory models that allow for subtle forms of mean

exchange rates and fundamental variables a semi parametric analysis of binary choice this study is motivated by the dearth of models that provide good out of sample fit for exchange rates that is current models of exchange rate behaviour are poor predictors of subsequent currency movements an attempt is made to determine if the relationship between exchange rates and fundamental variables can help explain the more extreme exchange rate movements distributional switches models are developed that relate fundamental economic variables to the resulting estimates based on the mixture of normal probability distributions parametric estimation procedures logit and probit are compared with a semi parametric technique maximum score estimation mscore which is relatively untested in the field of finance the fundamental variables of these models include information on trade balances money supply changes interest rate changes real economic growth relative inflation rates and changes in stock market indexes classification results favour mscore implications of results and improvements

changes in beef packers market power after the livestock mandatory price reporting act an agent based auction controversy remains about the effectiveness of the 1999 livestock mandatory price reporting act mpra we determine the likely changes in beef packers market power after the mpra by using an agent based first price common value auction past research has employed cournot models but we use an auction model which more closely resembles the actual cattle procurement process we find that feeders benefit from the mpra regardless of whether price uncertainty decreases for packers and or feeders if the packers price uncertainty is reduced the feeder benefits from an increase in competition between the packers if the feeder s price uncertainty is reduced the feeder benefits from imposing more accurate reserve prices copyright 2013 oxford university press

simulating the diffusion of organic farming practices in two new eu member states abstract agriculture continues to be a major contributor to water pollution climate change and loss of biodiversity although policies to encourage farmers to work to higher sustainability standards in food and energy crop production have increased throughout the european union in new member states accession to the european union mostly brought a substantially increased public support to foster the diffusion of certified organic farming however the take up of organic farming is varied for reasons that are not yet well understood in this paper we analyse the diffusion of organic farming through farm populations this involves an understanding of farmer behaviour and how it can change over time we present a generic agent based model that builds on the theory of planned behaviour as framework for understanding and modelling farmers decision making processes the model is applied to high diffusion regions in two new eu member states latvia and estonia the values for the model s parameters are informed by survey data the model reproduces the interdependence of social influence and economic factors social influence alone is shown to make little difference to the model dynamics organic farmers remain organic and conventional farmers remain conventional introducing a change to the environment e g a subsidy results in an increase in the proportion of adopters thus economic factors appear to be more influential than social factors however only when allowing for both the subsidy and social influence do we reveal the whole picture and the combined adoption rate is higher than the sum of the proportion of adopters resulting from just social influence without a subsidy and from just a subsidy without social influence we also compare the effect of the subsidy with the effect of influence from organic farm advisors to develop policy recommendations

nominal exchange rate regimes and the real exchange rate abstract two assumptions about the real exchange rate are common in the literature on international finance 1 the real exchange rate is a random walk 2 the time series properties of the real exchange rate depend on the nominal exchange rate regime this paper presents evidence that indicates that the random walk behavior of the real exchange rate is only a characteristic of the post world war ii period moreover our findings also suggest that what is crucial to the real exchange rate behavior is the particular historical period rather than the nominal exchange rate arrangement

trade frictions and welfare in the gravity model how much of the iceberg melts a key element missing from the structural gravity literature is an examination of the implied general equilibrium by design the gravity equation is adept at predicting bilateral trade flows to make inferences beyond trade flows however the theoretic models should be consistent with other observables structural econometric estimates from anderson and van wincoop 2003 allow us to evaluate their proposed general equilibrium along several dimensions we find that their gravity model predicts too large a difference between consumer and producer prices excessive variation in the geographic distribution of consumer price indices and an exceptionally large portion of output devoted to overcoming trade frictions under plausible parameterizations of the model at least 50 of output melts in transit jel classification f10 frictions commerciales et bien etre dans un modele gravitationnel quelle portion du iceberg fond un element cle qui manque dans la litterature specialisee sur la gravite structurelle est l examen de l equilibre general implicite par construction l equation de gravite predit bien les flux de commerce bilateraux pour suggerer des inferences au dela des flux de commerce il faut cependant que les modeles theoriques soient compatibles avec ce qu on observe par ailleurs les calibrations econometriques structurelles d anderson et van wincoop 2003 permettent d evaluer leur equilibre general propose selon plusieurs dimensions il s avere que leur modele de gravite predit une difference trop grande entre les prix des producteurs et des consommateurs une variation excessive dans la distribution geographique des indices de prix a la consommation et une portion anormalement grande de la production depensee pour surmonter les frictions commerciales a partir de parametrisations plausibles du modele on montre que 50 de la production fond en cours de route

real exchange rate behavior in the middle east a re examination abstract this letter extends recent work by bahmani oskooee bahmani oskooee m do exchange rates follow a random walk process in middle eastern countries economics letters 1998 58 339 344 on testing long run purchasing power parity for middle eastern countries during the post bretton woods period using multivariate nonlinear models strong support is provided for highly nonlinear reversion of real exchange rates toward a stable equilibrium for each country examined

sprayed to death path dependence lock in and pest control strategies theoretical literature on the economics of technology has emphasized the effects on technological trajectories of positive feedbacks in a competition among technologies that all perform a similar function the presence of increasing returns to adoptions can force all but one technology from the market furthermore the victor need not be the superior technology this paper provides an empirical study of one technological competition which illuminates this theoretical work it uses theoretical results to explain why chemical control of agricultural pests remains the dominant technology in spite of many claims that it is inferior to its main competitor integrated pest management copyright 1996 by royal economic society

agent based spatial models applied to agriculture a simulation tool for technology diffusion resource use changes and policy analysis abstract this paper presents a spatial multi agent programming model which has been developed for assessing policy options in the diffusion of innovations and resource use changes unlike conventional simulation tools used in agricultural economics the model class described here applies a multi agent cellular automata ca approach by using heterogeneous farm household models and capturing their social and spatial interactions explicitly the individual choice of the farm household among available production consumption investment and marketing alternatives is represented in recursive linear programming models adoption constraints are introduced in form of network threshold values that reflect the cumulative effects of experience and observation of peers experiences the model s economic and hydrologic components are tightly connected into a spatial framework the integration of economic and hydrologic processes facilitates the consideration of feedback effects in the use of water for irrigation the simulation runs of the model are carried out with an empirical data set which has been derived from various data sources on an agricultural region in chile simulation results show that agent based spatial modelling constitutes a powerful approach to better understanding processes of innovation and resource use change

transactions costs and nonlinear adjustment in real exchange rates an empirical investigation eolquilibrium models of real exchange rate determination in the presence of transactions costs imply a nonlinear adjustment process toward purchasing power parity ppp conventional cointegration tests which ignore the effect of transactions costs may be biased against the long run ppp hypothesis our results using both monthly data for the interwar period and annual data spanning two centuries clearly reject the linear framework in favor of an exponential smooth transition autoregressive process the systematic pattern in the estimates of the nonlinear models provides strong evidence of mean reverting behavior for ppp deviations and helps explain the mixed results of previous studies

testing purchasing power parity under the null hypothesis of co integration this paper analyzes monthly data on the exchange rates and price indices of the eleven major industrial countries over the modern period of floating exchange rates it presents tests that are based upon the null hypothesis of cointegration the paper finds evidence that most country pairs not involving north american currencies have exchange rates and price indices that are cointegrated it estimates the error correction representation for the series that are cointegrated and it shows that the dynamic adjustment of the relationship between exchange rates and prices is accomplished almost entirely in the market for foreign exchange copyright 1991 by royal economic society

quantifying value chain analysis in the context of livestock systems in developing countries the analysis of value chains has augmented our knowledge on the complexities inter linkages distributional benefits and institutional arrangements of production and marketing channels in developing countries however the analysis remains relatively qualitative and case specific with limited ability to rank or assess the impact of alternative interventions or to analyze sufficiently the complex market dynamics and feedbacks present in livestock systems this paper offers theoretical and applied insights on ways to improve the analytical rigor of the value chain methodology that combines both qualitative and quantitative approaches

multi agent simulations to explore rules for rural credit in a highland farming community of northern thailand thanks to recent advances in the field of distributed artificial intelligence agentbased models abm can now be used to run simulations of social phenomena based on their computerized representations and to apply experimental methods in social sciences axelrod 1997 gilbert and troitzsch 1999 jager 2000 in the field of renewable resource management and environmental sciences several abm simulation platforms offer the possibility to explore interactions between social and ecological dynamics costanza and ruth 1998 bousquet et al 1998 lansing 2002 in these complex systems the social and economic dynamics can be viewed as a set of interactions among heterogeneous agents generating aggregate phenomena that are different from the behaviour of groups of average individuals considered in classical economic thinking rouchier and bousquet 1998 such a view was adopted in the research presented here

can intensification of cattle ranching reduce deforestation in the amazon insights from an agent based social ecological model abstract deforestation in the amazon with its vast consequences for the ecosystem and climate is largely related to subsequent land use for cattle ranching in addition to conservation policies proposals to reduce deforestation include measures to intensify cattle ranching however the effects of land use intensification on deforestation are debated in the literature this paper introduces the abacra model a stylized agent based model to study the interplay of deforestation and the intensification of cattle ranching in the brazilian amazon the model combines social learning and ecological processes with market dynamics in the model agents adopt either an extensive or semi intensive strategy of cattle ranching based on the success of their neighbors they earn their income by selling cattle on a stylized market we present a comprehensive analysis of the model with statistical methods and find that it produces highly non linear transient outcomes in dependence on key parameters like the rate of social interaction and elasticity of the cattle price we show that under many environmental and economic conditions intensification does not reduce deforestation rates and sometimes even has a detrimental effect on deforestation anti deforestation policies incentivizing fast intensification can only lower deforestation rates under conditions in which the local cattle market saturates

simulating soil fertility and poverty dynamics in uganda a bio economic multi agent systems approach declining soil fertility and increasing rural poverty are major problems facing sub saharan agriculture bio economic modeling has been used to analyze the complex interaction between ecological sustainability and rural poverty as well as to explore policy options promoting sustainable development this paper shows that these models can be further advanced by adopting an agent based modeling approach this gives a more realistic representation of diversity in socioeconomic and biophysical terms allows local interaction between households and can yield an ex ante assessment of the distributional consequences of policy intervention this paper describes the modeling approach and illustrates it with an empirical application to two village communities in the lake victoria crescent of uganda it is shown how the model system can be calibrated with and validated against empirical data the model is used to analyze the potential effect of short term credit mineral fertilizer and improved maize seed on poverty and sustainability simulation results suggest substantial reductions in poverty although the incidence of poverty would remain high and these innovations alone would have little effect on the long term ecological sustainability of the system

agent based modeling for ex ante assessment of tree crop innovations litchis in northern thailand this study uses an agent based model for ex ante assessment of agricultural innovations the model builds on whole farm mathematical programming mp and extends the methodology with a spatial representation of the system the heterogeneity of farm households and landscapes and the interaction between farm households we apply the model in a northern thai watershed to study the potential of four innovations to increase the profitability of litchi orchards cost benefit analysis shows that each innovation would increase the profitability of litchi growing however the results of the agent based model show that at current price levels these innovations alone would not be enough to stem the decline in the area under litchis the model was validated and the sensitivity of the results tested for variations in the irrigated water supply and liquidity we report on how farmers responded to these results and discuss the implications for other areas in northern thailand

trade facilitation and economic development this article analyzes the relationship between trade facilitation and trade flows in the asia pacific region country specific data for port efficiency customs environment regulatory environment and e business usage are used to construct indicators for measuring trade facilitation the relationship between these indicators and trade flows is estimated using a gravity model that includes tariffs and other standard variables enhanced port efficiency has a large and positive effect on trade flows regulatory barriers deter trade improvements in customs and greater e business use significantly expand trade but to a lesser degree than improvements in ports or regulations the benefits of specific trade facilitation efforts are estimated by quantifying differential improvements in these four areas among members of the asia pacific economic cooperation apec a scenario in which apec members with below average indicators improve capacity halfway to the average for all members shows that intra apec trade co

the disappearance of the border barrier in some european union countries bilateral trade this paper estimates the tariff equivalent of the border barrier in each bilateral trade among european union countries the results show that there are large differences in the border barrier across european union countries bilateral trade in some bilateral trade flows the border barrier has almost disappeared whereas in other cases it is still equivalent to a 75 per cent tariff the results also show that some countries have low border barriers in most of their bilateral trade flows with other eu members whereas other countries persistently present large border barriers