interpreting an error correction model partial adjustment forward looking behaviour and dynamic international money demand an error correction model is derived from a stochastic dynamic programming problem incorporating rational expectations a parametric restriction is derived that allows a test for the theoretical proposition that the optimal strategy behind the error correction from entails the failure to asymptotically close the gap between the choice variable and the growing target this is accomplished by nesting a partial adjustment model with forward looking expectations within the error correction paradigm the counterintuitive behaviour embodied in the error correction model is not supported by the data in the context of a cross country comparison of cash balances relationships

is the price level tied to the m2 monetary aggregate in the long run a long run link between money and prices is evident for the united states since the korean war if the m2 measure of money is used and the velocity of m2 v2 is modeled as a mean reverting series this link between m2 and prices is the basis for a dynamic model of inflation that compares favorably in forecasting exercises with phillips curve and more typical monetarist approaches the behavior of v2 is examined from 1870 to the present providing a basis for reconsidering previous findings that v2 follows a random walk copyright 1991 by american economic association

agricultural support policies in imperfectly competitive markets why market power matters in policy design most agricultural policy analysis assumes that markets are perfectly competitive despite increasing evidence to the contrary we demonstrate that the interaction of market power and government intervention may lead to outcomes that are counter to key results of policy analysis for perfectly competitive markets we show that market power may reduce or eliminate entirely the net welfare benefits from removing two traditional support mechanisms price floors and deficiency payments and may increase considerably the government s cost of implementing either of them accordingly optimally designed price support measures may improve welfare in the presence of downstream oligopoly and or oligopsony power copyright 2011 oxford university press

industrialization and consolidation in the u s food sector implications for competition and welfare good sources for information on recent developments in food market structure include barkema drabenstott and welch u s department of agriculture 1996b and rogers my objective is not to add to this literature but rather to consider what we have learned as a profession about the rapid consolidation in food processing and distribution what are its implications for market power economic efficiency and the distribution of economic welfare among producers consumers and marketers

a model of price determination for fresh produce with application to california iceberg lettuce most fresh produce commodities are highly perishable thus supply at any time is fixed at prices above marginal harvest costs in this paper we develop a model of short run farm price determination for produce commodities that incorporates this key structural feature and also allows for imperfect competition in price determination the model is empirically manifest in a switching regression framework and applied to california iceberg lettuce results support the general model relative to a model restricted to competitive behavior and suggest that retailer buyers capture most of the rents from lettuce production and sale

a dynamic theory of conjectural variations this paper explores the relationship between dynamic oligopolistic competition and static conjectural variations equilibria using an infinite horizon adjustment cost model the author demonstrates that any steady state closed loop subgame perfect equilibrium coincides with a conjectural variations equilibrium in the case of linear demand and quadratic costs the dynamic conjectures consistent with closed loop steady state equilibria are negative constant symmetric and vary continuously with the discount rate and the adjustment cost parameter in an interval between the static consistent conjectures and zero cournot copyright 1992 by blackwell publishing ltd

monetary anticipations and the demand for money abstract it has recently been argued that unanticipated changes in nominal money supply should affect the real demand for money and empirical results which appear to support this hypothesis have been presented unfortunately the econometric techniques used by previous authors yield severel biased estimates in this paper we show how valid estimates may easily be obtained and present some illustrative empirical results using u s data these results do not support the conclusions of earlier authors we find that unanticipated money supply changes do indeed affect the real demand for money but with the wrong sign and that anticipated changes also have a significant effect a consistency test for all models employing the anticipated unanticipated distinction is also proposed

price floors and technical inefficiency in india s sugar processing industry in india cane is processed into sugar by cooperatives public enterprises and private for profit firms the indian government sets a unique floor price for each processor that is increasing in the firm s effectiveness in converting cane into sugar the floor price binds for public and private firms but not for cooperatives which rebate profits to members we argue that this price floor policy creates a disincentive for private and public firms to be technically efficient in converting cane to sugar in support of this hypothesis an analysis of 593 indian sugar factories from 1992 to 2007 reveals statistically significant differences in technical efficiency with cooperatives being the most efficient and public firms least efficient we estimate welfare losses due to the technical inefficiency attributable to the price floor policy and argue that it can be eliminated by enacting policy to base price floors upon quality of the cane input received by a factory

the search for a stable money demand function a survey of the post 1973 literature phe question of whether the demnand function for money is stable is one of the most important recurring issues in the theory and application of macroeconomic policy what is being sought in a stable demand function is a set of necessary conditions for money to exert a predictable influence on the economy so that the central bank s control of the money supply can be a useful instrument of economic policy as such the notion of a stable demand function appears to involve three key elements e g john t boorman 1976 p 317 and david e w laidler 1977 pp 34 35 first the demand for money relation should be highly predictable in a statistical sense as measured by the usual goodness of fit statistics precision of estimated coefficients and presumably its ability to forecast accurately out of sample second a stable demand function for money has relatively few arguments a relationship that requires knowledge about a large number of variables in order to pin it down is in effect not predictable finally the variables that appear as arguments in the function should represent significant links to spending and economic activity in the real sector in sum a stable demand function for money means that the quantity of money is predictably related to a small set of key variables linking money to the real sector of the economy the importance of a stable money demand function for monetary policy can be illustrated with the standard is lm model in which interest rates and gnp are the endogenous variables in this context a stable demand function for money translates into a well defined relationship between money interest rates and gnp

dynamic oligopoly in the rice export market a linear quadratic dynamic oligopoly model is used to estimate the competitiveness of the rice export market the model nests various market structures using either open loop or feedback strategies the estimated feedback model implies a less competitive market structure than the estimated open loop model the rice export market is oligopolistic but it is closer to competitive than collusive copyright 1989 by mit press

the causal direction between money and prices abstract causality is viewed as a matter of control controllability is captured in simon s analysis of causality as an asymmetrical relation of recursion between variables in the unobservable data generating process tests of the stability of marginal and conditional distributions for these variables can provide evidence of causal ordering the causal direction between prices and money in the united states 1950 1985 is assessed the balance of evidence supports the view that money does not cause prices and that prices do cause money

regression direction and weak exogeneity abstract the absence of testing for weak exogeneity in money demand has often led to stark conditioning claims regarding the validity of price equations this paper uses the johansen procedure to explore the conditioning properties of money demand systems for nonborrowed reserves m1 and m2 our results show that irrespective of the specification of the cointegrating relation a feedback mechanism enters the equation for money the opposite however is not true for the price equations the results also cast a warning for single equation models of money demand in that weak exogeneity is sensitive to how the system is defined

contextualizing leadership a typology of global leadership roles while the global leadership literature has grown rapidly over recent years the context in which global leadership occurs remains ill defined and under conceptualized this lack of contextualization risks equating global leadership roles that are qualitatively very different and prevents sufficient clarity for empirical sampling to foster more cohesive theoretical and empirical work we develop a typology of global leadership roles that considers context as a critical contingency factor drawing on role and complexity leadership theories we propose four ideal typical global leadership roles incremental operational connective and integrative global leadership that differ in their 1 task complexity characterizing the variety and flux within the task context and 2 relationship complexity reflecting the boundaries and interdependencies within the relationship context we further delineate how these contextual demands relate to specific sets of behaviors and actions that allow global leaders to fulfill the requirements of their corresponding ideal typical global leadership roles our article concludes with a discussion of implications the typology presents for global leadership research and practice contextualization of the leadership construct more broadly and the field of international business

estimating the market for tomatoes an econometric model of the market for tomatoes in israel is developed to take into account the distortions brought about by the marketing board and intermediaries the existence of monopoly and monopsony power is hypothesized by analyzing the middlemen s optimal behavior being compelled by the marketing board to purchase all produce wholesalers exert monopsony power by reducing quantities marketed to consumers by selling surpluses to the marketing board at the minimum price the empirical results confirm the existence of strong monopsony power together with weak monopoly power in that market

conjectural variations as a reduced form abstract the conjectural variations solution is usually seen as the reduced form of the equilibrium of an unmodeled dynamic game we show that in linear oligopolies and for an open set of values of the discount factor this correspondence holds exactly for a quantity setting repeated game with minimax punishments during t periods

efficient redistribution through commodity markets efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention the implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs the results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient given the political power of interest groups

partial adjustment in the demand for money theory and empirics central to the notion of money as the medium of exchange is the concept that all transactions are conducted using money balances this notion expounded most explicitly by robert clower 1967 1970 has led to the development over the past decade of interesting models of the transactions and precautionary demand for money these have examined optimal behavior of the economic agent in steady state although there has been much gained by examining money balance behavior in this way money demand models so far have ignored the behavior of money during periods of disequilibrium an adequate understanding of total money balances is possible only by incorporating both equilibrium and disequilibrium behavior into an overall view in this regard michael darby 1972 is exceptional in explicitly treating disequilibrium money demand behavior darby s paper is mainly empirical but it contains an interesting intuitive discussion of money s role as a shock absorber during periods of disequilibrium in the present study we address both the theoretical foundation and empirical importance of the shock absorber effect we construct a model of optimal behavior by the economic agent showing the necessary conditions for the existence of partial adjustment and indicating how the intensity of adjustment behaves over time and in response to changes in economic variables this appears to be the first such attempt in the money demand literature although there is related work in the investment literature on the flexible accelerator we test the model on u s quarterly data to estimate the existence and magnitude of partial adjustment we find a significant but small effect for both ml and m2 furthermore the effect dies out within one and two quarters for the respective definitions of money the results thus support but disagree in magnitude with those of darby 1972 who found a larger and longer lasting partial adjustment effect our finding of so short an effect is especially important in light of robert barro s 1978 paper which relies on darby s long lasting effect to explain price behavior

the demand for money in the united states evidence from cointegration tests this paper uses recent cointegration test procedures to investigate the underlying economic relationship between real money balances real income and interest rates for the united states unlike recent studies of money demand the authors analysis uses quarterly data spanning the period 1915 88 thus providing a sample encompassing a wide variety of economic experiences the evidence presented indicates that the broader m2 measure of money is the preferable measure with which to consider the long run effects of monetary policy copyright 1991 by ohio state university press

parastatals as instruments of government policy the food corporation of india abstract reforms of agri food policies typically occur without taking account of the structure of markets in which the policy reforms occur it is usually assumed that markets are perfectly competitive an assumption that is violated in the presence of parastatals they often play multiple roles in meeting the objectives of government policy through their activities in procurement and distribution of food commodities after presenting a general framework we modify it to model the specifics of the food corporation of india and the functions that it fulfils in providing price support to farmers and food security to poor households keeping the government s policy objectives unchanged we then alter the functions that the fci fulfils to be consistent with recommendations from the high level committee that recently investigated the role of the fci these recommendations included the substitution of negotiable warehouse receipts for the minimum support price scheme for farmers and the substitution of cash transfers in place of the targeted public distribution system for poor households we find that this re instrumentation of the means of achieving policy objectives together with a consequent greater role for the private sector leads to substantial welfare gains as well as to greater food security when measured as food availability

estimating long run economic equilibria with stochastic trends an asymptotic theory is provided to analyze a menu of currently existing estimators of cointegrated systems we study in detail the single equation ecm seecm approach of hendry our theoretical results lead to prescriptions for empirical work such as specifying seecm s nonlinearly and including lagged equilibrium relationships rather than lagged differences of the dependent variable as covariates simulations support these prescriptions and point to problems of overfitting not encountered in the semiparametric approach of phillips and hansen 1990

does oligopsony power matter in price support policy design empirical evidence from the thai jasmine rice market in the oligopsony market farmers may receive low prices and policy analysis assuming perfect competition can yield serious bias results in this paper we estimate oligopsony power between processors and farmers and evaluate the welfare impact of the paddy pledging program ppp a generous price support program in the thai jasmine rice market with an imperfect competition model we develop a model that consists of rice supply equation and derived demand equation we then simultaneously estimate these equations using system estimation methods to recover oligopsony power parameters finally we use these parameters to assess the welfare impact of the price support program using annual panel data running from crop marketing year 2001 2002 2015 2016 and exploiting the institutional feature of the ppp we find strong evidence of some oligopsony power a moderate level of oligopsony price distortion and a negative relationship between price support and oligopsony power we also find that the ppp is inefficient but effective in income redistribution moreover the program benefits both farmers and consumers with better policymaking decisions the ppp can be efficient by setting a suitable support price therefore our results show that in the case of the thai jasmine rice market the generally accepted wisdom about agricultural price support policy does not necessarily hold and price support can be designed to improve the efficiency of the market