common agency with rational expectations theory and application to a monetary union we extend the theory of common agency to the situation where the principals payoffs are affected by their ex ante expectations of the agent s ex post choice we show how the usual truthful schedules must be modified to account for the rational expectations constraint we apply the model to a monetary union where member governments influence the policy of the common central bank using incentive contracts we examine how the outcomes depend on different delegated objectives of the bank and find that some often advocated rules create an excessive deflationary bias

regional dimensions of the australian business cycle dixon r and shepherd d regional dimensions of the australian business cycle regional studies this paper deals with the identification of and explanations for co movement in regional business cycles using employment data for australian states and territories regions it shows that both raw growth rates and the deviations from a hodrick prescott trend reflect noise in the series as well as any cycle but that both can be manipulated so as to reveal their cyclical components it is found that growth rate models are dominated by noise whereas the hodrick prescott filter allows identification of the cyclical features of interest the extent of co movements in cyclical fluctuations in employment amongst the regions can be explained by regional industry structure and size of region dixon r and shepherd d hodrick prescott hodrick prescott

urban influence on costs of production in the corn belt this article determines the relative technical efficiency of rural and urban influenced crop livestock enterprises in the corn belt farmers in urban influenced locations are less technically efficient than farmers in rural locations during 1998 2000 stochastic production frontier procedures indicate that a 10 increase in urban influence leads to a close to 4 decrease in technical efficiency the most successful urban influenced farms have controlled costs as effectively as rural farms they have tended to de emphasize that nondairy livestock activities particularly beef and hogs do not rely extensively on off farm income and have relatively large less residential lifestyle operations compared to less successful urban influenced farmers however our statistical analysis clearly bears out the refrain in popular literature that urban proximity raises the cost for and decreases the viability of traditional farms

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

media bias and influence evidence from newspaper endorsements this paper investigates the relationship between media bias and the inuence of the media on voting in the context of newspaper endorsements werst develop a simple econometric model in which voters choose candidates under uncertainty and rely on endorsements from better informed sources newspapers are potentially biased in favor of one of the candidates and voters thus rationally ac count for the credibility of any endorsements our primary empiricalnding is that endorsements are inuential in the sense that voters are more likely to support the recommended candidate after publication of the endorsement the degree of this inuence however depends upon the credibility of the endorsement in this way endorsements for the democratic candidate from left leaning news papers are less inuential than are endorsements from neutral or right leaning or newspapers and likewise for endorsements for the republican thesendings suggest that voters do rely on the media for information during campaigns but that the extent of this reliance depends upon the degree and direction of any bias

on savings and investment dynamics in a small open economy abstract this paper constructs a stochastic overlapping generations two country model of savings and investment under conditions of perfect international capital mobility the focus of the analysis is on the relationship between savings and investment dynamics in a small open economy in response to stochastic variations in domestic and or foreign production technologies the model is simulated under alternative specifications of the stochastic distribution governing both technologies this provides insight into the very complicated nature and rich diversity of possible relationships between savings and investment dynamics

regional monetary policy an australian perspective fraser p macdonald g a and mullineux a w regional monetary policy an australian perspective regional studies a structural vector autoregressive svar model for australia is utilized to identify the domestic impacts of common monetary policy shocks on national and state business cycles and to consider the role of state diversification disparities for observed differences in responses to monetary policy innovations western australia and queensland differ to other states in their response to common shocks and evidence suggests this may be due to differences in their economic geographies overall the australian monetary union has become increasingly reliant on fiscal transfers particularly from western australia in the past two decades this emphasizes the importance of a political union underpinning a successful monetary union

technical allocative and economic efficiencies in swine production in hawaii a comparison of parametric and nonparametric approaches abstract technical allocative and economic efficiency measures are derived for a sample of swine producers in hawaii using the parametric stochastic efficiency decomposition technique and nonparametric data envelopment analysis dea efficiency measures obtained from the two frontier approaches are compared firm specific factors affecting productive efficiencies are also analyzed finally swine producers potential for reducing cost through improved efficiency is also examined under the specification of variable returns to scale vrs the mean technical allocative and economic efficiency indices are 75 9 75 8 and 57 1 respectively for the parametric approach and 75 9 80 3 and 60 3 for dea while for the constant returns to scale crs they are 74 5 73 9 and 54 7 respectively for the parametric approach and 64 3 71 4 and 45 7 for dea thus the results from both approaches reveal considerable inefficiencies in swine production in hawaii the removal of potential outliers increases the technical efficiencies in the parametric approach and allocative efficiencies in dea but overall contrary to popular belief the results obtained from dea are found to be more robust than those from the parametric approach the estimated mean technical and economic efficiencies obtained from the parametric technique are higher than those from dea for crs models but quite similar for vrs models while allocative efficiencies are generally higher in dea however the efficiency rankings of the sample producers based on the two approaches are highly correlated with the highest correlation being achieved for the technical efficiency rankings under crs based on mean comparison and rank correlation analyses the return to scale assumption is found to be crucial in assessing the similarities or differences in efficiency measures obtained from the two approaches analysis of the role of various firm specific factors on productive efficiency shows that farm size has strong positive effects on efficiency levels similarly farms producing market hogs are more efficient than those producing feeder pigs based on these results by operating at the efficient frontier the sample swine producers would be able to reduce their production costs by 38 46 depending upon the method and returns to scale considered

competition and truth in the market for news in this essay we evaluate the case for competition in news markets from the perspective of economics first we consider the simple proposition that when more points of view are heard and defended beliefs will converge to the truth this concept of competition is several steps removed from market competition among actual media firms but it has played a prominent role in the legal arguments for a free press we then explore three mechanisms by which increasing competition or more precisely increasing the number of independently owned firms can limit bias or distortions that originate on the supply side of the media market first when governments attempt to manipulate news competition can increase the likelihood that the media remain independent second when news providers have an interest in manipulating consumers beliefs diversity in such incentives can reduce the risk of information being suppressed or distorted third competition may drive firms to invest in providing timely and accurate coverage overall we argue that there are robust reasons to expect competition to be effective in disciplining supply side bias next we ask how the effect of competition changes when distortions originate on the demand side of the market when consumers themselves demand biased or less socially relevant news we find that increased competition may or may not improve welfare in these cases though we caution against using this as a justification for concentrating media power in the hands of state controlled or regulated firms

technical efficiency and impact of environmental regulations in farrow to finish swine production in taiwan this article demonstrates how technical efficiency and the impact of environmental regulations of taiwanese farrow to finish swine production can be estimated in the presence of undesirable outputs the issue of measuring technical efficiencies while considering undesirable outputs has been addressed by past studies but the proper method of including undesirable outputs has always been a subject of debate this article develops a data envelopment analysis dea based model that includes undesirable outputs the technologies of desirable output production and undesirable output control are considered simultaneously this allows one to transform undesirable output into desirable output whereby a traditional shephard distance function can be used to measure technical efficiencies an approach to measuring the impacts due to environmental regulations is then derived empirical results show that larger farms are more technically efficient than small sized farms but no clear conclusions can be reached for the measures of regulatory impact among farms with different sizes on average the sample farms incurred an opportunity cost due to environmental regulations equivalent to 9 8 of market value opportunity costs rise with efficiency

the regional effects of monetary policy a survey of the empirical literature this survey provides an updated review of the empirical literature on the regional effects of monetary policy in economic activity by means of undertaking a threefold perspective first the main methodological dimensions of this literature are examined while pinpointing those modelling or methodological traits that constitute a source of diverging estimates and thereby produce inconclusive evidence secondly the estimates yielded by the literature are summarized by carrying out a cross study analysis of the results for each monetary union by drawing on empirical regularities that are robust across studies the conclusiveness of the results is assessed while those monetary unions for which conclusive evidence is still lacking are also identified lastly the sources of regional heterogeneity identified by these studies are reviewed in order to shed some light on the linkage between monetary policy and territorial heterogeneity as a result of this threefold perspective this survey delivers overall structured conclusions and updated policy relevant lessons moreover various research gaps and emerging topics in the literature are also identified

incomplete intertemporal consumption smoothing and incomplete risk sharing this paper develops a method to estimate jointly the degree of intertemporal consumption smoothing and the degree of inter regional risk sharing the empirical results for the u s states and oecd and eu countries suggest that i regardless of the assumption on the degree of intertemporal consumption smoothing the degree of risk sharing within a country is larger than across countries ii the degree of intertemporal consumption smoothing within a country is also larger than across countries and iii the difference between the degree of intertemporal consumption smoothing within u s states and across oecd and eu countries is as large as the difference between the degree of risk sharing contrary to the findings of some past studies

dairy farm efficiency measurement using stochastic frontiers and neoclassical duality this paper presents a stochastic efficiency decomposition model based on kopp and diewert s deterministic methodology the stochastic model is used to analyze technical economic and allocative efficiency for a sample of new england dairy farms the results suggest that mean economic efficiency for the farmers in the sample is about 70 and that on average there is little difference between technical 83 0 and allocative 84 6 efficiency analyses of the relationship between efficiency and four socioeconomic variables farm size education extension and experience reveal that despite some statistically significant associations efficiency levels are not markedly affected by these variables

international and intranational business cycles this paper surveys and analyzes the international real business cycle literature we re explore two international business cycle anomalies emphasized by backus kehoe and kydland 1995 as well as establishing the pattern of productivity growth between industries and countries we then compare these findings for the international business cycle to those obtained for data between regions within a country the so called intranational business cycle importantly the intranational business cycle is a natural environment for thinking about the interactions between economies when there are no trade frictions and when there are not multiple currencies we summarize our findings with a comparison between the stylized facts for international and intranational business cycles and draw some policy conclusions copyright 1997 by oxford university press

are statistical reporting agencies getting it right data rationality and business cycle asymmetry this article provides new evidence on the rationality of early releases of industrial production ip and producer price index ppi data rather than following the usual practice of examining only first available and fully revised data we examine the entire revision history for each variable thus we are able to assess for example whether earlier releases of data are in any sense less rational than later releases and when data become rational our findings suggest that seasonally unadjusted ip and ppi become rational after approximately 3 4 months whereas seasonally adjusted versions of these series remain irrational for at least 6 12 months after initial release for all variables examined we find evidence that the remaining revision is predictable from its own past or from publicly available information in other economic and financial variables in addition we find a clear increase in the volatility of revisions during recessions suggesting that early data releases are less reliable in toughe

the market for news we investigate the market for news under two assumptions that readers hold beliefs which they like to see confirmed and that newspapers can slant stories toward these beliefs we show that on the topics where readers share common beliefs one should not expect accuracy even from competitive media competition results in lower prices but common slanting toward reader biases on topics where reader beliefs diverge such as politically divisive issues however newspapers segment the market and slant toward extreme positions yet in the aggregate a reader with access to all news sources could get an unbiased perspective generally speaking reader heterogeneity is more important for accuracy in media than competition per se

measuring network systemic risk contributions a leave one out approach abstract the aim of this paper is to propose a new network measure of systemic risk contributions that combines the pair wise granger causality approach with the leave one out concept this measure is based on a conditional granger causality test and consists of measuring how far the proportion of statistically significant connections in the system breaks down when a given financial institution is excluded we analyse the performance of our measure of systemic risk by considering a sample of the largest banks worldwide over the 2003 2018 period we obtain three important results first we show that our measure is able to identify a large number of banks classified as global systemically important banks g sibs by the financial stability board fsb second we find that our measure is a robust and statistically significant early warning indicator of downside returns during the last financial crisis finally we investigate the potential determinants of our measure of systemic risk and find similar results to the existing literature in particular our empirical results suggest that the size and the business model of banks are significant drivers of systemic risk

why has us policy uncertainty risen since 1960 we consider two classes of explanations for the rise in policy related economic uncertainty in the united states since 1960 the first stresses growth in government spending taxes and regulation a second stresses increased political polarization and its implications for the policymaking process and policy choices

analyses of technical efficiency using sdf and dea models evidence from nepalese agriculture alleviation of poverty is a central issue in nepal given the limited stock of land and the infant unorganized manufacturing sector increased demand for food has to be satisfied by improving production efficiency this article examines how this could be achieved stochastic distance function and data envelopment analysis models identify the existence of a high degree of technical inefficiency in nepalese agriculture suggesting that there is a substantial prospect of increasing agricultural productivity using the existing level of inputs and resources more efficiently among the three farm sizes in the data set medium size farmers achieve a higher technical efficiency than large and small farm sizes suggesting that productive efficiency can be increased with the encouragement of creating medium size holdings the observed decreasing returns to scale also implies that productivity gains could be achieved by breaking up of large farms into small family farms the technical inefficiency model suggests the

bayesian counterfactual analysis of the sources of the great moderation we use counterfactual experiments to investigate the sources of the large volatility reduction in us real gdp growth in the 1980s contrary to an existing literature that conducts counterfactual experiments based on classical estimation and point estimates we consider bayesian analysis that provides a straightforward measure of estimation uncertainty for the counterfactual quantity of interest using blanchard and quah s 1989 structural var model of output growth and the unemployment rate we find strong statistical support for the idea that a counterfactual change in the size of structural shocks alone with no corresponding change in the propagation of these shocks would have produced the same overall volatility reduction as what actually occurred looking deeper we find evidence that a counterfactual change in the size of aggregate supply shocks alone would have generated a larger volatility reduction than a counterfactual change in the size of aggregate demand shocks alone we show that these results are consistent with a standard monetary var for which counterfactual analysis also suggests the importance of shocks in generating the volatility reduction but with the counterfactual change in monetary shocks alone generating a small reduction in volatility copyright 2007 john wiley sons ltd

are prices countercyclical evidence from the g 7 abstract this paper re examines the cyclical behavior of prices using postwar quarterly data for the g 7 we confirm recent evidence that the price level is countercyclical however we find strong evidence that the inflation rate is procyclical in our sample our results show the importance of making a clear distinction between inflation and the cyclical component of the price level when reporting and interpreting stylized facts regarding business cycles

productivity economies and efficiency in u s agriculture a look at contracts the growing importance of production contracts especially for some livestock species and in certain regions suggests that contracts confer economic benefits on farmers this trend has however stimulated concerns about the impacts of contracting on farm structure and concentration and environmental degradation which have led to efforts by various levels of government to regulate contract production for example in the u s hog industry between 1992 and 1998 the portion of feeder pigto finish hog operations using production contracts increased from 11 to 34 while the share of output produced under contract increased from 22 to 63 key and mcbride mcbride and key recent growth in hog contracts have been particularly noteworthy in the upper midwest with 2002 contracted production accounting for 47 of the value of total farm production in iowa and minnesota compared to only about 5 in 1996 and virtually none in 1991 meanwhile production contract levels in north carolina the other center of hog production have been relatively stable production contracts offer several potential advantages over independent production that could explain their increasing prevalence such as lowering income risk for growers contracting may also raise farm productivity by improving the quality of managerial inputs speeding the transfer of technical information to growers and facilitating growers access to credit thereby permitting the adoption of newer more efficient technologies at the same time

the correlation of productivity growth across regions and industries in the united states abstract this paper shows that productivity growth is more strongly correlated across u s regions than across the g7 countries cross region correlations of productivity growth within a given industry are typically stronger than cross sector correlations of productivity growth within the same region

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

comparing frontier methods for economic environmental trade off analysis abstract this paper uses a mechanistic frontier approach as a reference to evaluate the ability of conventional parametric sfa and non parametric dea frontier approaches for analyzing economic environmental trade offs conventional frontier approaches are environmentally adjusted through incorporating the materials balance principle the analysis is worked out for the flemish pig finishing case which is both representative and didactic results show that on average sfa and dea yield adequate economic environmental trade offs both methods are good estimators for technical efficiency cost allocative and environmental allocative efficiency scores are less robust due to the well known methodological advantages and disadvantages of sfa and dea for particular firms sfa dea and the mechanistic approach may yield different economic environmental trade offs one has therefore to be careful when using conventional frontier approaches for firm specific decision support the mechanistic approach allows for optimizing performances per average present finisher which is the production unit in pig finishing conventional frontier methods do not allow for this optimization since the number of average present finishers varies along the production functions since the mechanistic production function is based on underlying growth feed uptake and mortality functions additional firm specific indicators can also be calculated at each point of the production function

micro targeting and polarization abstract this paper connects the rise in polarization to changes in media technology which allow for higher precision in the advertising strategy of candidates candidates place ads in media outlets whose audiences differ in ideology and size we develop the concept of media centrality which takes into account differences in the media network and in ideology media centrality leads to a simple characterization of both the optimal targeting strategy and policy we show that generally a more fragmented media landscape leads to an increase in polarization

borders and business cycles abstract we document that business cycles of u s census regions are substantially more synchronized than those of european countries data from regions within european countries confirm a european border effect within country correlations are substantially larger than cross country correlations these results continue to hold after controlling for exogenous factors such as distance and size we consider the role of four factors that have received attention in the debate about emu sectoral specialization the level of trade monetary policy and fiscal policy we find that the lower level of trade between european countries explains most of the observed border effect

spatial allocation and the shadow pricing of product characteristics abstract the paper considers an industry transforming primary commodities farm products into processed commodities food products it focuses on the allocation of embedded characteristics carbohydrate protein etc both across space and among commodities the approach generates a spatial competitive market equilibrium of production consumption transformation and trade for both primary and processed commodities along with the spatial distribution of shadow prices for the product characteristics the model provides a basis for analyzing the allocation and pricing of agricultural products food products and characteristics in spatial markets the empirical usefulness of the model is illustrated in the context of regional resource allocation in the u s dairy sector

the spanish beef sector in the 1990s impact of the bse crisis on efficiency and profitability the beef sector has undergone a series of changes as a result of successive food scares and agricultural policy reforms the purpose of the paper is to analyse technical efficiency and profitability in spanish livestock enterprises during the 1990s focusing on the possible impact of the bse crisis and the 1992 cap reform on each of these variables the main findings reveal the existence of technical inefficiency during the sample period some factors have a positive impact others a negative impact on efficiency as far as the effects of cap reform and the bse crisis are concerned the results show the ineffectiveness of agricultural policy regulation to promote efficiency in the sector and the improvement in the efficiency as a consequence of the bse crisis the profitability analysis reveals the importance of direct subsidies however in their absence a large percentage of holdings is unable to remunerate either own or rented factors analysis shows therefore that there are two counteracting effec

channels of interstate risk sharing united states 1963 1990 we develop a framework for quantifying the amount of risk sharing among states in the united states and construct data that allow us to decompose the cross sectional variance in gross state product into several components which we refer to as levels of smoothing we find that 39 percent of shocks to gross state product are smoothed by capital markets 13 percent are smoothed by the federal government and 23 percent are smoothed by credit markets the remaining 25 percent are not smoothed we also decompose the federal government smoothing into subcategories taxes transfers and grants to states

ranking efficiency units in dea using bootstrapping an applied analysis for slovenian farm data this article explores how data envelopment analysis dea along with a smoothed bootstrap method can be used in applied analysis to obtain more reliable efficiency rankings for farms the main focus is the smoothed homogeneous bootstrap procedure introduced by simar and wilson 1998 to implement statistical inference for the original efficiency point estimates two main model specifications constant and variable returns to scale are investigated along with various choices regarding data aggregation the coefficient of separation cos a statistic that indicates the degree of statistical differentiation within the sample is used to demonstrate the findings the cos suggests a substantive dependency of the results on the methodology and assumptions employed accordingly some observations are made on how to conduct dea in order to get more reliable efficiency rankings depending on the purpose for which they are to be used in addition attention is drawn to the ability of the slice model implemented in gams to enable researchers to overcome the computational burdens of conducting dea with bootstrapping

too small to be beautiful the farm size and productivity relationship in bangladesh this paper examines the agricultural productivity farm size relationship in the context of bangladesh features of bangladesh s agriculture help overcome several limitations in testing the inverse farm size productivity relationship in other developing country settings a stochastic production frontier model is applied using data from three rounds of a household panel survey to estimate simultaneously the production frontier and the technical inefficiency functions the correlated random effects approach is used to control for unobserved heterogeneous household effects methodologically the results suggest that the stochastic production frontier models that ignore the inefficiency function are likely mis specified and may result in misleading conclusions on the farm size productivity relationship empirically the findings confirm that the farm size and productivity relationship is negative but with the inverse relationship diminishing over time total factor productivity growth driven by technical change is found to have been robust across the sample across farm size groups the relatively larger farmers experienced faster technical change which helped them to catch up and narrow the productivity gap with the smaller farmers

testing for volatility changes in u s macroeconomic time series we test for a change in the volatility of 214 u s macroeconomic time series over the period 1959 1999 we find that approximately 80 of these series have experienced a break in unconditional volatility during this period even though more than half of the series experienced a break in conditional mean most of the reduction in volatility appears to be due to changes in conditional volatility our results are robust to controlling for business cycle nonlinearity in both mean and variance volatility changes are more appropriately characterized as instantaneous breaks than as gradual changes nominal variables such as inflation and interest rates experienced multiple volatility breaks and witnessed temporary increases in volatility during the 1970s on this evidence we conclude that the increased stability of economic fluctuations is widespread

do asymmetries matter for european monetary policy in this paper we analyze the impact of economic and institutional ecb decision rules asymmetries on the effectiveness of monetary policy in euroland we consider a model where asymmetric shocks and divergent propagation of shocks in output and inflation are potential causes of tensions within the ecb concerning the conduct of common monetary interest rate policy welfare implications of the alternative decision procedures are discussed

getting closer or drifting apart advances in communication and transportation technologies have the potential to bring people closer together and create a global village however they also allow heterogenous agents to segregate along special interests which gives rise to communities fragmented by type rather than geography we show that lower communication costs should always decrease separation between individual agents even as group based separation increases each measure of separation is pertinent for distinct types of social interaction a group based measure captures the diversity of group preferences that can have an impact on the provision of public goods an individual measure correlates with the speed of information transmission through the social network that afiects for example learning about job opportunities and new technologies we test the model by looking at coauthoring between academic economists before and during the rise of the internet in the 1990s

aggregation persistence and volatility in a macro model we introduce firm heterogeneity into the standard monopolistically competitive real business cycle rbc model the fundamental equilibrium path is derived and the time series properties of aggregate gdp are studied analytically although firms productivities are subject to temporary shocks the aggregate process displays a surprising novel form of nonlinearity and long memory which had not been built into the model at the outset this aggregate gdp turns out to have very different properties from log linear time series models such as auto regressive ar models and their extensions it displays very strong persistence which ends abruptly with a sudden change of tendency giving its autocorrelation function acf an s shape although persistent it is mean reverting unlike the everlasting memory of unit root processes its volatility is of a greater order of magnitude than that of any of its components so small micro shocks can generate large macro fluctuations it is also characterized by long asymmetric cycles of random lengths increased monopoly power tends to reduce the amplitude and increase the

the dynamics of a small open economy in response to monetary fiscal and productivity shocks abstract this paper evaluates empirically the relative importance of monetary and fiscal versus technology shocks in an open economy characterized by perfect international capital mobility the variance covariance matrix of these shocks is estimated a stochastic model is used to perform numerical simulations the results show that persistent shocks to productivity can reproduce several empirical regularities including the puzzling high correlation between national saving and investment remarkably well and that monetary and fiscal shocks play a minor role

a dynamic multi stage data envelopment analysis model with application to energy consumption in the cotton industry abstract data envelopment analysis dea is a non parametric method for evaluating the relative efficiency of homogenous decision making units dmus with multiple inputs and outputs in this paper we present a dynamic multi stage dea dms dea approach to evaluate the efficiency of cotton production energy consumption in the proposed model the farms which consume resources i e fertilizers seeds and pesticides to produce cotton are assumed to be the dmus inputs not consumed during a planning period are carried over to the next period in the planning horizon initially a dms dea model is used to determine the overall efficiency of the dmus with dynamic inputs next the efficiency score of each dmu is calculated for each time period in the planning horizon we demonstrate the applicability of the proposed method and exhibit the efficacy of the procedures and algorithms with a real life case study of energy consumption in the cotton industry

a generalized production frontier approach for estimating determinants of inefficiency in u s dairy farms this article investigates farm level efficiency of u s dairy farmers by estimating their technical and allocative efficiency technical inefficiency is assumed to be composed of a deterministic component that is a function of some farm specific characteristics and a random component by doing this we extend the stochastic frontier methodology in which determinants of technicial inefficiency are explicitly introduced in the model given the inputs variations in efficiency of farms are then explained by both deterministic and random components of technical inefficiency the empirical results indicate that a levels of education of the farmer are important factors determining technical inefficiency and b large farms are more efficient technically than small and medium sized farms both technical and allocative inefficiency are found to decrease with increase in the level of education of the farmer

cyclical patterns in the variance of economic activity this article models the conditional mean and variance of real gross national product gnp and its components using asymmetric exponential generalized autoregressive conditional hetero scedasticity a model previously applied only to financial variables the results imply that the variance of real gnp is higher following negative innovations than positive innovations and that this asymmetry arises in the cyclically sensitive sectors further evidence links this asymmetry to the phase of the business cycle the conditional variance appears to be largest around business cycle troughs in addition shocks to the conditional variance of gnp and its components typically persist for long periods the evidence of asymmetry in conditional variance is robust to a variety of alternative specifications

the less volatile u s economy a bayesian investigation of timing breadth and potential explanations using a bayesian model comparison strategy we search for a volatility reduction in u s real gross domestic product gdp growth within the postwar sample we find that aggregate real gdp growth has been less volatile since the early 1980s and that this volatility reduction is concentrated in the cyclical component of real gdp sales and production growth in many of the components of real gdp display similar reductions in volatility suggesting the aggregate volatility reduction does not have a narrow source we also document structural breaks in inflation dynamics that occurred over a similar time frame as the gdp volatility reduction

an examination of economic efficiency of russian crop production in the reform period this article examines economic efficiency ee of crop production of russian corporate farms for 1993 1998 ee declined over the period due to declines in both technical and allocative efficiency technical efficiency te results indicate that output levels could have been maintained while reducing overall input use by an average of 29 31 in 1998 depending on the method used while the allocative efficiency ae results show that costs could have been reduced about 30 the ee scores show that russian corporate farms could have increased efficiency by reducing the use of all inputs particularly fertilizer and fuel russian agriculture inherited machinery intensive technology from the soviet era which may be inappropriate given the relative abundance of labor in the post reform environment investment constraints have prevented the replacement of old machinery intensive technology with smaller scale machines that allow for a more labor using technology jel classification p2 q1

conditional asymmetries in real gnp a seminonparametric approach two critical assumptions are often made in empirical research regarding the relationship between economic variables and economic disturbances linearity and gaussianity together these two assumptions place strong restrictions on the time series behavior of a model most important these restrictions imply conditional symmetry using seminonparametric snp techniques this article presents evidence that real gross national product growth displays conditional asymmetry although these results confirm related results of brock and sayers sichel and hamilton the snp approach is novel in that it emphasizes the relationship between common modeling assumptions and the restrictions that these assumptions place on data

estimating the causal effect of water scarcity on the groundwater use efficiency of rice farming in south india abstract there is no consensus among researchers on the influence of scarcity on common pool resource use some suggest that scarcity leads to prudent use whereas others suggest that it will cause over extraction of resources this issue is particularly of interest for developing countries where natural resources are becoming scarce at an alarming rate this paper investigates the causal association between water scarcity and groundwater use efficiency in a rice based cropping system in south india where groundwater is increasingly becoming a scarce resource contextualization of the work is done under the premise of reported contradictions concerning the scarcity efficiency nexus using a two stage approach the causality is estimated first farm level groundwater use efficiency gwue scores are calculated using non parametric efficiency analysis and then these inefficiencies are linked to farm level scarcity indicators using the inverse probability weighting method our results showed a negative causal association between farm level water scarcity and gwue indicating the existence of competitive appropriation behavior in the face of scarcity hence policy measures to conserve groundwater should include supply enhancement to remove the threat of immediate scarcity on farm to avoid inefficient pumping in addition to demand management measures and improved governance

trade finance specialization and synchronization i investigate the determinants of business cycle synchronization across regions the linkages between trade in goods financial openness specialization and business cycle synchronization are evaluated in the context of a system of simultaneous equations the main results are as follows i specialization patterns have a sizable effect on business cycles most of this effect is independent of trade or financial policy but directly reflects differences in gdp per capita ii a variety of measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized even though they also tend to be more specialized iii the estimated role of trade is closer to that implied by existing models once intra industry trade is held constant the results obtain in a variety of data sets measurement strategies and specifications they relate to a recent strand of international business cycle models with incomplete markets and transport costs and on the empir

partisan bias and expressive voting abstract we conduct an experiment to characterize the expressive voting behavior of political partisans we find that participants who are asked to vote on the answer to factual questions tend to offer more partisan responses than those who must answer as decisive individuals we further test whether voters exploit corrective information that sometimes challenges their partisan views when information is available we observe smaller partisan gaps and more correct responses especially when the information is free when information is costly to acquire we find that voters generally choose to remain uninformed consistent with the downsian theory of rational ignorance

media and gridlock abstract i develop a model of the relation between the media environment and political obstructionism i show that when voters are less informed by media obstructionism becomes a more effective political signal for the minority party the model thus implies that media change can cause gridlock via signaling by contrast the previous literature on causes of gridlock focuses on polarization and other factors the model also makes several auxiliary predictions consistent with recent trends in u s politics

ideological segregation online and offline we use individual and aggregate data to ask how the internet is changing the ideological segregation of the american electorate focusing on online news consumption offline news consumption and face to face social interactions we define ideological segregation in each domain using standard indices from the literature on racial segregation we find that ideological segregation of online news consumption is low in absolute terms higher than the segregation of most offline news consumption and significan tly lower than the segregation of face to face interactions with neighbors co workers or family members we find no evidence that the internet is becoming more segregated over time

games of monetary and fiscal interactions in the emu abstract this paper constructs various models of the emu and ecb when member countries have different objectives voting in pursuit of national interest can yield moderate and stable inflation the metaphor of walsh type contracts implements a monetary policy rule that averages the member countries most preferred rules in a repeated relationship where a country suffering a large adverse shock can use political bargaining to subvert the ecb s commitment the optimal rule should incorporate some flexibility to forestall that finally freedom of national fiscal policies undermines the ecb s monetary commitment this may justify fiscal constraints like the stability and growth pact

efficiency in agricultural production the case of peasant farmers in eastern paraguay abstract this paper contributes to the productivity literature in developing country agriculture by quantifying the level of efficiency for a sample of peasant farmers from eastern paraguay a stochastic efficiency decomposition methodology is used to derive technical allocative and economic efficiency measures separately for cotton and cassava an average economic efficiency of 40 1 for cotton and of 52 for cassava is found which suggests considerable room for productivity gains for the farms in the sample through better use of available resources given the state of technology gains in output through productivity growth have become increasingly important to paraguay as the opportunities to bring additional virgin lands into cultivation have significantly diminished in recent years no clear strategy to improve farm productivity could be gleaned from an examination of the relationship between efficiency and various socioeconomic variables one possible explanation for this finding is the existence of a stage of development threshold below which there is no consistent relationship between socioeconomic variables and productivity if this is the case then our results suggest that this sample of paraguayan peasants are yet to reach such a threshold hence improvements in educational and extension services for example would be needed to go beyond this threshold once this is accomplished additional productivity gains would be obtained by further investments in human capital and related factors

exchange rate volatility exchange rate regime and trade volume evidence from the uk us export function 1889 1999 abstract this paper investigated the impact of exchange rate volatility and exchange rate regime on the british exports to the united states using data for the period 1889 1999 the empirical findings suggest that neither exchange rate volatility nor the different exchange rate regimes that spanned the last century had an effect on export volume

is a monetary union feasible for east asia the empirical suitability of the east asian economies for potential monetary integration is assessed the structural vector autoregression var method is employed to identify the underlying shocks using a three variable var model across the east asian economies the estimates of the eec are used as a benchmark to compare the size of the underlying shocks and the speed of adjustment to shocks in both regions to determine the feasibility of forming an optimum currency area oca in east asia the empirical results do not display strong support for forming an oca in the east asian region the results do imply however that some small subregions are potential candidates for ocas since their disturbances are correlated and small and these economies adjust rapidly to shocks

the unintended consequences of internet diffusion evidence from malaysia abstract can the introduction of the internet undermine incumbent power in a semi authoritarian regime i examine this question using evidence from malaysia where the incumbent coalition lost its 40 year monopoly on power in 2008 i develop a novel methodology for measuring internet penetration matching ip addresses with physical locations and apply it to the 2004 to 2008 period in malaysia using distance to the backbone to instrument for endogenous internet penetration i find that internet exposure accounts for 6 6 points nearly half the swing against the incumbent party in 2008 i find limited evidence of increased turnover and no evidence of an effect on turnout

technical efficiency and farm size a conditional analysis the relationship between technical efficiency and size might be affected by farm heterogeneity we analyse this relationship conditional on a set of control variables these control variables are chosen using a production model where technical efficiency is introduced as a parameter as a result technical efficiency affects both the input demand and the output supply of a profit maximising producer the empirical application explores these issues using panel data of dairy farms in spain

asymmetric shocks among u s states abstract the paper applies a factor model to the study of risk sharing among u s states the factor model makes it possible to disentangle movements in output and consumption due to national regional or state specific business cycles from those due to measurement error the results of the paper suggest that some findings of the previous literature which indicate a substantial amount of inter state risk sharing may be due to the presence of measurement error in output when measurement error is properly taken into account the evidence points towards a lack of inter state smoothing

overconfidence in political behavior this paper studies theoretically and empirically the role of overconfidence in political behavior our model of overconfidence in beliefs predicts that overconfidence leads to ideological extremeness increased voter turnout and stronger partisan identification the model also makes nuanced predictions about the patterns of ideology in society these predictions are tested using unique data that measure the overconfidence and standard political characteristics of a nationwide sample of over 3 000 adults our numerous predictions find strong support in these data in particular we document that overconfidence is a substantively and statistically important predictor of ideological extremeness voter turnout and partisan identification jel c83 d03 d72 d83

profit efficiency among bangladeshi rice farmers abstract production inefficiency is usually analyzed by its three components technical allocative and scale efficiency in this study we provide a direct measure of production efficiency of the bangladeshi rice farmers using a stochastic profit frontier and inefficiency effects model the data which are for 1996 include seven conventional inputs and several other background factors affecting production of modern or high yielding varieties hyvs of rice spread across 21 villages in three agro ecological regions of bangladesh the results show that there are high levels of inefficiency in modern rice cultivation the mean level of profit efficiency is 77 suggesting that an estimated 23 of the profit is lost due to a combination of technical allocative and scale inefficiency in modern rice production the efficiency differences are explained largely by infrastructure soil fertility experience extension services tenancy and share of non agricultural income

urban accounting and welfare why do people live in particular cities we can list many reasons but two are undoubtedly relevant agents can enjoy the city or be more productive there a combination of life amenities and productivity levels determines the size of cities but the positive effects of these characteristics are capped by the costs and frictions arising from congestion depending on city governance and the flexibility of markets these costs and frictions can be more or less important these city characteristics are in turn enhanced and amplified by the presence of urban externalities understanding the different forces that determine city sizes is crucial for answering a broad set of questions what is the relative importance of these forces in determining the size distribution of cities how much would we gain or lose if cities had similar amenities technology levels or frictions how much reallocation would this cause more generally what are the welfare implications of the location of agents across cities in this paper we provide a simple way of decomposing the characteristics that lead to the size distribution of cities into three main components efficiency amenities and excessive frictions we use a simple urban theory to calculate these components and to carry out a wide set of counterfactual exercises that provide answers to the questions we asked above the theory consists of a multi city model with monocentric cities that produce a single good workers decide how much to work and where to live efficiency is modeled as tfp amenities as directly affecting preferences

social connectivity media bias and correlation neglect we propose a model of political persuasion in which a biased newspaper aims to convince voters to vote for the government each voter receives the newspaper s report as well as an independent private signal voters then exchange this information on social media and form posterior beliefs neglecting correlation among signals an increase in connectivity increases the newspaper s bias if voters are ex ante predisposed to vote against the government and reduces the bias if they are predisposed in favour of the government while more precise independent signals reduce the newspaper s optimal bias the bias remains positive even when connectivity becomes large thus even with a large number of social connections the election produces an inefficient outcome with positive probability implying a failure of the condorcet jury theorem

technical efficiency of kansas arable crop farms a local maximum likelihood approach this study uses local maximum likelihood lml methods recently proposed by kumbhakar et al 2007 to assess the technical efficiency of arable crop kansas farms lml techniques overcome the most relevant limitations associated to mainstream parametric stochastic and nonparametric frontier models lml allows deriving farm level frontier parameter estimates the relevance of using localized estimates is evidenced by the observed heterogeneity in production technologies technical efficiency scores derived from the lml approach 0 905 are higher than those of the dea model under crs 0 808 and sfa 0 804 and close to dea vrs 0 917 ratings deriving reliable information about farm efficiency performance is relevant to identify inefficient farms and define adequate policy and management strategies the use of refined methods has thus important implications

central bank constitutions for federal monetary unions abstract in a monetary union the central bank constitution must distribute the power over monetary policy between the members and the administrative center of the union we compare alternative distributions and evaluate their performance dominance of regional interests always leads to inefficient monetary stabilization policies whether or not dominance of regional interests leads to a higher long run rate of inflation depends on the union s political constitution

the differential regional effects of monetary policy this paper examines whether monetary policy has similar effects across regions in the united states impulse response functions from an estimated structural vector autoregression reveal a core of regions new england mideast plains southeast and the far west that respond to monetary policy changes in ways that closely approximate the u s average response of the three noncore regions one great lakes is noticeably more sensitive to monetary policy changes and two southwest and rocky mountains are found to be much less sensitive a state level version of the model is estimated and used to provide evidence on the channels for monetary policy

time varying smooth transition autoregressive models nonlinear regime switching behavior and structural change are often perceived as competing alternatives to linearity in this article we study the so called time varying smooth transition autoregressive tv star model which can be used both for describing simultaneous nonlinearity and structural change and for distinguishing between these features two modeling strategies for empirical specification of tv star models are developed monte carlo simulations show that neither of the two strategies dominates the other a specific to general to specific procedure is best suited for obtaining a first impression of the importance of nonlinearity and or structural change for a particular time series a specific to general procedure is most useful in careful specification of a model with nonlinear and or time varying properties an empirical application to a large dataset of u s macroeconomic time series illustrates the relative merits of both modeling strategies

does the great recession imply the end of the great moderation international evidence in this paper we examine whether or not the great recession had a temporary or permanent effect on output growth volatility after years of low macroeconomic volatility since the early eighties based on break detection methods applied to a set of advanced countries our empirical results do not give evidence to the end of the great moderation period but rather that the great recession is characterized by a dramatic short lived effect on the output growth but not on its volatility we show that neglecting the breaks both in mean and in variance can have large effects on output volatility modeling based on garch specifications

the cyclical behavior of prices abstract the procyclical behavior of prices has been a staple of business cycle lore since the work of the early nber business cycle researchers this paper reexamines that empirical fact the aggregate data do not support procyclical price movements as a stable feature of the business cycle the only episode where it is a robust feature of the data is the period between the two world wars particularly the period of the great depression

monetary policy in a heterogeneous monetary union the australian experience australia is a monetary union with strong regional specialization manufacturing and service industries are located in the population centres on the south eastern seaboard and mining and pastoral activities take place in the interior and north of the continent monetary policy affects the interior and north more strongly than the south eastern seaboard because australian primary goods are mostly exported and the exchange rate provides the main transmission channel for monetary policy the reserve bank of australia must consider the economic interests of the interior and north and the south eastern seaboard since monetary policy cannot differentiate between regions there is a need for interregional macroeconomic risk sharing

how well does the mundell fleming model fit australian data since the collapse of bretton woods australian time series for the nominal interest rate real output the nominal exchange rate prices and nominal money since 1973 are characterized by a vector autoregressive process driven by five exogenous disturbances those disturbances are identified so that they can be interpreted as the five main sources of fluctuations found in the mundell fleming model of a small open economy under flexible exchange rates namely world interest rate aggregate supply is money supply and money demand shocks the dynamic responses of the estimated model to the structural shocks are analysed and shown to match most of the predictions of the mundell fleming model

citizen editors endogenous information acquisition and news accuracy abstract this paper provides a model of the market for news where profit maximizing media outlets choose their editors from a population of rational citizens the analysis identifies a novel mechanism of media bias the bias in a media outlet s news reports is the result of the slanted endogenous information acquisition strategy of its editor in particular the results show that the expected accuracy of news reports is lower the more ideological an editor is nevertheless citizens find it optimal to acquire information from a media outlet whose editor has similar ideological preferences depending on the distribution of citizens ideological preferences a media outlet may choose an ideological editor even in a monopolistic market moreover ideological editors are more likely to be present in the market for news i the higher the number of media outlets competing in the market for news ii the lower the opportunity cost that citizens have to incur to acquire information

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

heteroskedasticity robust panel unit root tests this article proposes new unit root tests for panels where the errors may be not only serial and or cross correlated but also unconditionally heteroscedastic despite their generality the test statistics are shown to be very simple to implement requiring only minimal corrections and still the limiting distributions under the null hypothesis are completely free from nuisance parameters monte carlo evidence is also provided to suggest that the new tests perform well in small samples also when compared to some of the existing tests supplementary materials for this article are available online

television and voter turnout i use variation across markets in the timing of television s introduction to identify its impact on voter turnout the estimated effect is significantly negative accounting for between a quarter and a half of the total decline in turnout since the 1950s i argue that substitution away from other media with more political coverage provides a plausible mechanism linking television to voting as evidence for this i show that the entry of television in a market coincided with sharp drops in consumption of newspapers and radio and in political knowledge as measured by election surveys i also show that both the information and turnout effects were largest in off year congressional elections which receive extensive coverage in newspapers but little or no coverage on television

factors affecting the technical efficiency among smallholder farmers in the slash and burn agriculture zone of cameroon abstract this paper estimates technical efficiency among small holder farmers in the slash and burn agriculture zone of cameroon and identifies sources of inefficiency using detailed survey data obtained from 450 farmers over 15 villages throughout 2001 2002 growing season we find that the mean levels of technical efficiency are 77 73 and 75 respectively for groundnut monocrop maize monocrop and maize groundnut farming systems suggesting existence of substantial gains in output and or decreases in cost with available technology and resources the efficiency differences are explained significantly by credit soil fertility social capital distance of the plot from the access road and extension services policy recommendations are drawn from these findings

demand for slant how abstention shapes voters choice of news media political commentators warn that the fragmentation of the modern media landscape induces voters to withdraw into information cocoons and segregate along ideological lines we show that the option to abstain breaks ideological segregation and generates cross over in news consumption voters with considerable leanings towards a candidate demand information that is less biased towards that candidate than voters who are more centrist this non monotonicity in the demand for slant makes voters ideologies non recoverable from their choice of news media and generates disproportionate demand for media outlets that are centrist or only moderately biased it also implies that polarisation of the electorate may lead to an ideological moderation in news consumption

random interactions in the chamber legislators behavior and political distance abstract i investigate the role of social interaction among members of parliament mps and the impact of such interaction on the political distance between parties using the random allocation of seats in the icelandic parliament i find that mp s voting and speech behaviors are affected by the behavior of legislators seated nearby i also show that greater random exposure to mps from different parties ultimately reduces the political distance between parties similar evidence is found using historical data for the u s house of representatives by exploiting the introduction of a lottery mechanism to determine desk assignments in 1845 i argue that random seating arrangements could constitute a low cost way of reducing differences within the political arena

currency unions and trade how large is the treatment effect currency unions and trade what can the data say the impact of a common currency on trade can be grossly mismeasured if countries that belong to currency unions are systematically different from those that do not and if the relationship between trade and its observable determinants is complex i argue that such complications are plausible and likely to distort the empirical results of a recent economic policy paper by andrew rose issue 30 2000 pp 7 45 using techniques designed to be robust in this situation i find that the effects of common currency on international trade are considerably less dramatic and much less precisely estimated torsten persson i have always maintained that the measured effect of a single currency on trade appears implausibly large but i am not convinced by torsten persson s diagnosis and proposed solution i apply a variety of estimation techniques to a new larger data set where many more instances of currency union creation and abandonment make it possible to rely on time series as well as cross sectional evidence the results are similar to my earlier ones the effect of a single currency on trade is large andrew rose

a currency union for hong kong and mainland china abstract this paper investigates the degree and the evolution of business cycle synchronization between hong kong sar and mainland china as well as hong kong sar and the united states with a two step procedure a structural var model is first set up to capture the dynamics of shocks to different regions then a state space model is used to gauge the degree of symmetry of regional shocks and to examine whether business cycles have been more synchronized over time our results cast doubt on the feasibility of a currency union between hong kong and mainland china in the foreseeable future

international demand and liquidity shocks in a svar model of the australian economy a structural vector autoregressive model of the australian economy that allows for international shocks from the usa japan as well as world commodity prices is specified and estimated for the period 1979 1999 a block exogenous structure linking the three countries is imposed the international linkages are modelled using a factor structure to circumvent problems from estimating large scale dynamic models the factors are estimated recursively using a kalman filter and are found to represent aggregate demand and liquidity shocks for the usa and japan respectively the key empirical result is the usa shocks are the dominant source of international shocks on the australian economy with the japanese economy having a dampening effect on the usa shocks the empirical results also show that australian monetary policy responds to domestic conditions rather than international monetary policy

asymmetric business cycles theory and time series evidence abstract we offer a theory of economic fluctuations based on intertemporal increasing returns agents who have been active in the past face lower costs of action today this specification explains the observed persistence in individual and aggregate output fluctuations even in the presence of i i d shocks because individuals respond to the same shock differently depending on their recent past experience the exact process for output the sharpness of turning points and the degree of asymmetry are determined by the form of heterogeneity our general formulation under certain assumptions reduces to a number of popular state space unobserved components models we find that on us data our general formulation performs better than many of the existing econometric models largely because it allows sharper downturns and more pronounced asymmetries than linear models and is smoother than discrete regime shift models our estimates imply that only modest intertemporal returns are needed for our model to explain us gnp and that heterogeneity across agents plays an important role in the propagation of business cycle shocks

international real business cycles we ask whether a two country real business cycle model can account simultaneously for domestic and international aspects of business cycles with this question in mind we document a number of discrepancies between theory and data the most striking discrepancy concerns the correlations of consumption and output across countries in the data outputs are generally more highly correlated across countries than consumptions in the model we see the opposite