nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

the money supply and nominal agricultural prices in the early 1970s food and agricultural prices in the united states rose substantially faster than other prices now early in the 1980s farm prices are depressed relative to other prices in the economy numerous explanations of the behavior of nominal agricultural prices in the past decade have been offered these explanations may be broadly divided into two categories the first is the structuralist explanation it argues that real shocks in selected sectors of the economy such as global crop failures raise prices of certain goods these price increases are later validated or accommodated by expansions in the money supply so that the prices of other goods need not decline in contrast monetarist inflation explanations argue that autonomous increases in the money supply lead or cause the price increases and do not just occur ex post to accommodate real shocks ultimately both explanations recognize that without monetary expansion no long run inflation can occur the fundamental difference is

a three gap model of foreign transfers and the gdp growth rate in developing countries abstract a simplified macroeconomic framework is developed for the fiscal gap which is considered to be an important stumbling block for adjustment with growth in highly indebted developing countries distinctive characteristics of a fiscally constrained economy are compared with those of economies constrained either by the availability of savings or foreign exchange tentative implications for external conditionality accompanying debt relief measures are derived

estimating var models under non stationarity and cointegration alternative approaches for forecasting cattle prices multivariate var models estimated with non stationary data raise difficult econometric questions because differencing to achieve stationary can introduced distortions into multivariate models three approaches have been suggested for estimating such models 1 vector error correction vec models difference the data to achieve stationary and use an error correction term to replace the long run information lost through differencing 2 var models can be estimated with raw data in levels if the non stationary data is also cointegrated because recent theoretical work proves that estimation with such data will yield consistent parameter estimates 3 bayesian parameter estimates are not affected by non stationarity although some analysts argue that bayesian analysis is not appropriate for data that is also cointegrated a multivariate cattle price model provides a good framework for comparing these approaches because the major variables are both non stationary and cointegrated and because the model s opti

forecasting agricultural exports and imports in south africa the implementation of wide ranging policy reforms including trade and exchange rate policies is improving the efficiency of the south african economy and its reintegration into the global economy with rapid export expansion agricultural exports in the southern african customs union increased from r8 14 billion in 1995 to r23 0 billion in 2003 whilst agricultural imports rose from r6 83 billion to r13 84 billion during the same period this article uses alternative approaches to forecasting agricultural exports and imports in south africa the models used include exponential smoothing autoregressive integrated moving average arima vector autoregression var engle granger eg single equation and vector error correction models vecm we found that the arima and eg methods outperform the var and vecm according to theil s u statistic the var outperforms the vecm in forecasting agricultural exports in south africa the combined forecasts have a lower variance compared to individual forecasts ther

a monetary analysis of food price determination erratic food price movements during the 1970s have received much attention in recent literature salathe and boehm found that movements in retail food prices since 1970 have been substantially more volatile than in earlier periods and that the food component of the consumer price index cpi has often displayed an annual rate of change different from that of the total cpi such changes in agricultural prices reflect low price elasticities for food products and the difficulty of predicting weather patterns and their effects on farm output research interest stems from relatively larger recent price changes caused by persistent general inflation and unexpected supply disruptions several recent studies of retail food prices are based on cost push theories these models posit that as input costs faced by food manufacturers rise the increases are passed through to consumers in the form of higher product prices to model cost push behavior changes in components of the marketing bill such as processing packaging and transportation costs are measured and related to subsequent changes in retail product prices examples of such empirical studies are those by lamm heien and lamm and westcott however these models represent only one perspective of the pricing process this paper suggests the use of a family of alternative models in particular by making a clear distinction between changes in nominal and real values a different set of variables is selected to measure each component of overall price change it is argued that not all models can explain behavior of both real and nominal price changes

managing adjustment costs political authority and the implementation of adjustment programs with special reference to african countries abstract the degree to which a government implements a program given no disruptive factors depends critically on its legitimate authority to carry out the program and the degree to which management aspects notably management costs of the program were satisfactorily dealt with at the design stage program designers should understand the nature dimensions justification and basis of legitimate authority when the government s legitimate authority is inadequate program designers must advise the government to obtain it a properly designed program should also include measures to speed up entry prevent inefficient exit and minimize unemployment and underutilization of capacity have a framework for ensuring competitive and open markets and arm the program manager with tools to alleviate social tensions arising from certain distributional consequences and to respond to predictable nationalistic preferences

social incidence and economic costs of carbon limits a computable general equilibrium analysis for switzerland this paper discusses both distributional and allocational effects of limiting carbon dioxide emissions in a small and open economy it starts from the assumption that switzerland attempts to stabilize its greenhouse gas emissions over the next 25 years and evaluates costs and benefits of the respective reduction program from a methodological viewpoint this paper illustrates how a computable general equilibrium approach can be adopted for identifying economic effects of cutting greenhouse gas emissions on the national level from a political economy point of view it considers the social incidence of a greenhouse policy it shows in particular that public acceptance can be increased and economic costs of greenhouse policies can be reduced if carbon taxes are accompanied by revenue redistribution

impacts of monetary and macroeconomic factors on food prices in eastern and southern africa eastern and southern africa has been experiencing relatively large increases in real food prices since the early 1980s real food prices in some african countries grew as much as 11 per year during the 1980 1996 period the huge volatility in food prices coincided with the implementation of structural adjustment programmes in several african countries this study examines the impacts of monetary and macroeconomic factors on real food prices in eastern and southern africa using the technique of cointegration and error correction modelling to test the long run relationship between real food prices and the factors that influence their behaviour in selected african countries demand elasticities for food are estimated for selected countries the empirical results show that changes in domestic food production coupled with income trade exchange rate and monetary policies have significant impacts on real food prices with wide implications for food availability and food security in the region

general equilibrium effects of environmental policy a cge modeling approach estimation of emission control cost functions is often carried out in a partial equilibrium framework i e under the assumption that emission control measures have negligible effects on input and output prices in this paper a computable general equilibrium model is used for simulation of the impact on factor prices and resource allocation of reductions of so infx sup no infx su and co2 emissions thus the model includes markets for tradable emission permits and the equilibrium prices of permits reflect the marginal costs of emission control the results suggest that major emission reductions are likely to have general equilibrium effects and thus that emission control cost functions that fail to take these effects into account may give a distorted picture of the economic impact of emission control

is market liberalization compatible with food security storage trade and price policies for maize in southern africa abstract concern for the negative impacts of staple food price fluctuations limits the extent to which governments in low income countries are willing to liberalize their agricultural markets these concerns are legitimate as such price fluctuations can lead to high transactions costs for poor consumers in the short run and low growth in the long run however past government attempts to stabilize food prices completely have been expensive and ineffective use of a dynamic programming optimization model suggests that a different type of policy regime could reduce price variability significantly compared to what would prevail in free markets and could accomplish this at relatively low cost this policy regime includes allowing some official price flexibility with respect to changes in production and world price exporting when regional market opportunities exist and holding considerably lower stocks than in the past

moral hazard the long lasting legacy of bailouts the u s government appears to be committed to supporting any large bank that gets into trouble a bailout environment distorts risk assessments debt capital flows more readily to large institutions even inefficient ones than to small ones this article proposes reforms to the u s financial system a change in incentives is needed phasing out the deductibility of interest on all business tax returns would reduce the incentive for leverage another reform would require all banks to issue 10 year subordinated notes which would provide a large capital cushion banks would have to go to market every year to replace maturing subordinated debt which would greatly enhance market discipline listen to a presentation by the author based on this article

of laws lending and limbic systems over the past four centuries financial crises have occurred at semi regular intervals of approximately once a decade their primary mechanism seems to be the increasingly elastic nature of credit in the modern financial system recent advances in neurophysiology and cognitive neuropsychology shed light on this phenomenon and provide hints about how such crises might be mitigated in the future

the effects of macroeconomic factors on south african agriculture significant research efforts have been devoted to understanding the effects of macroeconomic factors on the agriculture sector analysing the sources of volatility in the industry is critical for designing appropriate policies to stabilize agricultural markets reduce poverty and increase economic growth agriculture is a competitive sector with prices that are more flexible than those in nonagricultural sectors this article uses annual data over the 1957 2004 period and a vector error correction model in investigating the dynamic effects of exchange rates money supply and other macroeconomic variables on the agricultural sector in south africa overall real exchange rates interest rates inflation and money supply m3 shocks have significant and persistent impacts on agricultural output prices received by farmers and farm input prices m3 and interest rate shocks tend to put agriculture in a cost price squeeze agricultural price movements are a source of macroeconomic instability in the country r

economic development and environmental policy in turkey an institutionalist critique turkey has had a prolonged exemplary experience with economic development in this paper we will trace the emergence of an environmental concern within development planning in turkey after a brief theoretical discussion on rival frameworks it is our contention that whereas economic policies are planned to meet certain goals environmental policies are formulated after observing the results of these economic policies and only in a fragmented manner what is needed is an alternative comprehensive policy based on a theoretical framework in tune with karl polanyi gunnar myrdal william kapp and nicholas georgescu roegen in order to uplift the analysis and policy design to a comprehensive level copyright oxford university press

the environmental consequences of stagnation in nicaragua abstract a decade of war and revolution under the sandinistas caused macroeconomic chaos but may have been indirectly beneficial to the environment now the country is a ward of the international financial community with foreign debt at almost six times gdp and few policy options the chamorro government elected in 1990 has reduced the role of government and restored the price system as the principal means of resource allocation and income distribution a three gap model is used to show that environmental deterioration is likely to accelerate as a result of pursuing neoliberal policies the analysis is based on a distinction between intensive and extensive environmental decay

dilemmas of structural adjustment and environmental policies under instability post 1980 turkey abstract the turkish structural adjustment since 1980 has been associated with chronic instability since the late 1980s the weaknesses in the fiscal system and the premature external liberalization emerge as the main factors hindering the passage toward stable growth enforced and erratic distributional changes and relative stagnation of capital accumulation have undermined the growth potential of the economy further it is demonstrated that existing market structures may negate environmental policies based on market incentives these observations as well as those on the interactions of the market system and the environment create strong arguments in favor of an active state

limits to alternative forms of capitalization the case of anatolian holding companies summary since the late 1960s alternative forms of capitalization have emerged in the absence of an effective capital markets regime in turkey we can see these alternative forms in the failed attempts to create anatolian holding companies through the direct investment of small savings this article shows how anatolian holding companies became victims of poor institutional and regulatory regimes and how the lack of institutions to promote impersonal trust in the economy in turn permitted widespread abuses we identify populist politics lax oversight and social norms that incorporated gambling as three interlinked reasons which hindered the genesis and development of viable capital market reform and regulatory institutions in turkey 2003 elsevier ltd all rights reserved

maize pricing policy in eastern and southern africa abstract public sector attempts to determine official producer and consumer prices suffer from a number of problems made more apparent by the process of agricultural market liberalization six measures to ease the financial problems of policy adjustment are identified covering the clarification of the post reform role of official prices the move towards economically based pricing structures the introduction of within year price flexibility to reduce the costs of intervention the incorporation of macroeconomic linkages into the procedures for price setting the use of multi annual analysis and modelling for price determination and the articulation of modified systems of price support as marketing board networks are cut back an important conclusion is the need for a gradual phased approach to price reform

the world bank and the environment the world development report 1992 abstract despite its biases toward market friendliness the world bank s latest world development report on the whole gives a sympathetic review of the environmental difficulties confronting developing countries the bank s preferred market based policies however will not be able to resolve these problems fully and it is by no means certain that funding for required investments and development of new technologies will be at hand

rubble logic what did we learn from the great stock market bubble the financial analysts journal s 60th anniversary happens to coincide with the five year anniversary of the peak of the great stock market bubble of 1999 2000 the combination of proximity in time with just a bit of distance makes this year an appropriate time to consider what we may have learned from this momentous event this article suggests lessons that if we haven t learned them we should have

editorial the revival of the liberal creed the imf and the world bank in a globalized economy abstract this editorial reviews problems arising from the popular washington consensus economic package as economies become more globalized and the reasons why they occur suggestions for improving the performance of the institutions behind the policies the world bank and international monetary fund are provided

forecasting exchange rate for the australian dollar via a vis the us dollar using multivariate time series models the purpose of the paper is to forecast exchange rates by using restricted and unresticted vector autoregressive var models also introduced is an econometric model for the purpose of comparison a comparison of forecast stastistics shows that the restricted model bvar has better forecasting ability compared with the unrestricted var model however the econometric model outperforms both the study also indicates that the exchange rate relative price and three month forward rate are cointegrated thus an error correction model also is considered for the structural one and the forecasting performance improved further for this model