cows missing milk markets and nutrition in rural ethiopia abstractin rural economies encumbered by significant market imperfections farming decisions may partly be motivated by nutritional considerations in addition to income and risk factors these imperfections create the potential for farm assets to have direct dietary impacts on nutrition in addition to any indirect effects via income we test this hypothesis for the dairy sector in rural ethiopia finding that cow ownership raises children s milk consumption increases linear growth and reduces stunting we also find that household cow ownership is less important where there is good access to local markets suggesting that market development can substitute for household cow ownership

sulfur dioxide control by electric utilities what are the gains from trade title iv of the 1990 clean air act amendments caaa established a market for transferable sulfur dioxide so2 emission allowances among electric utilities this market offers firms facing high marginal abatement costs the opportunity to purchase the right to emit so2 from firms with lower costs and this is expected to yield cost savings compared to a command and control approach to environmental regulation this paper uses econometrically estimated marginal abatement cost functions for power plants affected by title iv of the caaa to evaluate the performance of the so2 allowance market specifically we investigate whether the much heralded fall in the cost of abating so2 compared to original estimates can be attributed to allowance trading we demonstrate that for plants that use low sulfur coal to reduce so2 emissions technical change and the fall in prices of low sulfur coal have lowered marginal abatement cost curves by over 50 percent since 1985 the flexibility to take advantage of these chan

smallholder dairying under transactions costs in east africa abstract it is argued that dairying is vital to future viability of many small farms in east africa and that high transactions costs for dairy production and marketing limit participation by asset and information poor smallholders case studies from kenya and ethiopia illustrate the role of dairy cooperatives in reducing transactions costs analysis of the determinants of producer prices received by a sample of dairy producers near addis ababa suggests that different levels of access to infrastructure assets and information explain why they contemporaneously accept widely different producer prices for fluid milk

feed in tariffs with minimum price guarantees and regulatory uncertainty abstract the feed in tariff fit program is a popular policy for incentivizing new renewable energy projects because it establishes a long term contract with renewable energy investors this paper presents a novel model to analyze a fit contract with a minimum price guarantee i e a price floor regime from an investor s perspective the results show that a perpetual guarantee only induces investment for prices below the price floor when offering a risk free investment opportunity in contrast the finite guarantee may induce investment even when the revenue from the guarantee is lower than the investment cost when an investor faces a scenario with regulatory uncertainty a higher and more likely reduction in the price floor induces earlier investment for all cases investors postpone an investment decision when market conditions present a higher price volatility

financial contagion through capital connections a model of the origin and spread of bank panics financial contagion is modeled as an equilibrium phenomenon in a dynamic setting with incomplete information and multiple banks the equilibrium probability of bank failure is uniquely determined we explore how the cross holding of deposits motivated by imperfectly correlated regional liquidity shocks can lead to contagious eects conditional on the failure of a financial institution we show that contagion is possible in the unique equilibrium of the economy and characterize exactly when it may exist at the same time we identify a direction of flow for contagious eects which provides a rationale for localized financial panics simulations identify the optimal level of interbank deposit holdings in the presence of contagion risk our results suggest that when the probability of bank failure is low maximal levels of interbank holdings are optimal when cross holding of deposits is complete we demonstrate that the intensity of contagion is increasing in the size of regionally aggregate liquidity shocks

a conceptual framework of adoption of an agricultural innovation abstract in this paper we present a conceptual framework of individual farmers decisions on adoption of a new innovation using the example of a new crop species this framework overcomes the shortcomings of a number of previous studies it represents the adoption of an innovation as a dynamic decision problem spanning at least several years the model allows for generation of potentially valuable information from trialing the innovation the value of such trials is due to development of skills e g in agronomic management of a crop as well as reduction in uncertainty about the innovation s long term profitability the framework also includes the farmer s personal perceptions managerial abilities and risk preferences in order to properly represent the adoption decision process the influences of socio demographic factors within the framework are discussed

productivity health and inequality in the intrahousehold distribution of food in low income countries a model is formulated incorporating linkages among nutrition labor market productivity health heterogeneity and the intrahousehold distribution of food and work activities in a subsistence economy empirical results based on a sample of households from bangladesh indicate that despite considerable intrahousehold disparities in calorie consumption households are averse to inequality furthermore consistent with the model the results also indicate that both the higher level and greater variance in the calories consumed by men relative to women reflect in part the greater participation by men in activities in which productivity is sensitive to health status copyright 1990 by american economic association

haddad lawrence john hoddinott and harold alderman eds intrahousehold resource allocation in developing countries models methods and policy baltimore md johns hopkins university press 1997 384 pp 55 00 in this volume economists demographers sociologists and anthropologists collaborate in the study of how resources are allocated within households in developing countries and why it matters from a policy perspective surveying a broad range of theory and evidence the contributors examine the many social and cultural factors that influence decisions about the family and household level about the allocation of time income assets and other resources ths contributors show that a more complete understanding of intrahousehold behaviour can increase the likelihood that policies will reach the people they are intended to affect

does population pressure induce farm intensification empirical evidence from tigrai region ethiopia the scarcity of land for crop and livestock production is critical in countries with growing populations the idea that increasing population density leads to natural resource depletion and economic failure as predicted by malthus or rather to farm intensification as hypothesized by boserup motivates this research this article examines how high population pressure in northern ethiopia influences smallholders farm intensification by applying recursive estimation with a control function approach using data from 518 randomly selected farmers although our empirical results are more in favor of the boserupian hypothesis the findings also reveal that both malthusian and boserupian forces coexist consistent with malthus theory high population pressure is found to be associated with small farm size and herd size population pressure affected both technology use breed cow stall feeding and modern cattle feed and output supply milk yield milk income and straw output as predicted by boserup s theory the use of modern input and output supply initially increases with increasing population pressure but declines again when population densities pass a critical threshold 800 persons km2 supporting malthus hypothesis the estimation results also revealed that both milk and straw supply responded positively to prices free grazing and stall feeding are found to be complementary activities likewise crop farm income and off farm job have a nonlinear relation with population pressure implying that both initially increase and then decrease with rising population pressure

crop diversity household welfare and consumption smoothing under risk evidence from rural uganda abstract in the wake of climate change there is now a resurgence of interest in the promotion of crop diversification as a climate smart agricultural practice in sub saharan africa the development economics literature suggests that increasing crop diversity is an effective risk management and consumption smoothing strategy in a context characterized by repeated exposure to shocks but weak institutional innovations using panel survey data from rural uganda merged with historical weather data this paper sheds light on the household welfare and consumption smoothing effects of crop diversity we employ instrumental variables methods to control for unobserved heterogeneity and potential reverse causality our study finds that crop diversification is a welfare enhancing strategy that increases consumption and aggregate household diets instrumental variables quantile regression results show that crop diversification generates higher consumption benefits for poorest households in the lower quantile of the consumption distribution than for relatively richer households crop diversification also improves consumption smoothing through reducing households reliance on less effective strategies such as informal insurance and involuntary diet changes as risk coping mechanisms overall the findings suggest that transforming agriculture towards a more diversified cropping system is a viable pathway for improving diets welfare risk management and the resilience of rural households

the lender of last resort a twenty first century approach the classical bagehot conception of a lender of last resort lolr that lends to illiquid banks has been criticized on two grounds on the one hand the distinction between insolvency and illiquidity is not clear cut on the other a fully collateralized repo market allows central banks to provide the adequate aggregate amount of liquidity and leave to the banks the responsibility of lending uncollateralized the object of this paper is to analyze these issues rigorously by providing a framework in which liquidity shocks cannot be distinguished from solvency ones and then asking whether there is a need for a lolr and how it should operate in the absence of systemic threats determining the optimal lolr policy requires a careful modeling of the structure of the interbank market and of the closure policy in our setup the results depend upon the existence of moral hazard if the main source of moral hazard is the banks lack of incentives to screen loans then the lolr may have to intervene to improve the efficiency of an unsecured interbank market in crisis periods if instead the main source of moral hazard is loan monitoring then the interbank market should be secured and the lolr should never intervene jel e58 628

optimal financial crises empirical evidence suggests that banking panics are related to the business cycle and are not simply the result of sunspots panics occur when depositors perceive that the returns on bank assets are going to be unusually low we develop a simple model of this in this setting bank runs can be first best efficient they allow efficient risk sharing between early and late withdrawing depositors and they allow banks to hold efficient portfolios however if costly runs or markets for risky assets are introduced central bank intervention of the right kind can lead to a pareto improvement in welfare from the earliest times banks have been plagued by the problem of bank runs in which many or all of the bank s depositors attempt to withdraw their funds simultaneously because banks issue liquid liabilities in the form of deposit contracts but invest in illiquid assets in the form of loans they are vulnerable to runs that can lead to closure and liquidation a financial crisis or banking panic occurs when depositors at many or all of the banks in a region or a country attempt to withdraw their funds simultaneously prior to the twentieth century banking panics occurred frequently in europe and the united states panics were generally regarded as a bad thing and the development of central banks to eliminate panics and ensure financial stability has been an important feature of the history of financial systems it has been a long and involved process the first cerntral bank the bank of sweden was established more than 300 years ago the bank of england played an especially important role in the development of effective stabilization policies in the eighteenth and nineteenth centuries by the end of the nineteenth century banking panics had been eliminated in europe the last true panic in england was the overend gurney company crisis of 1866

agricultural production and children s diets evidence from rural ethiopia we study the relationship between pre school children s food consumption and household agricultural production using a large household survey from rural ethiopia we find that increasing household production diversity leads to considerable improvements in children s dietary diversity however we also document how this nonseparability of consumption and production does not hold for households that have access to food markets these findings imply that nutrition sensitive agricultural interventions that push for market integration are likely to be more effective in reducing under nutrition than those promoting production diversity

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

banking panics the role of the first come first served rule and information externalities this paper proposes that both the first come first served rule and information externalities are important in causing contagious bank runs the first come first served rule creates a negative payoff externality among depositors this payoff externality forces depositors to respond to early noisy information such as failures of other banks therefore failures of a few banks may trigger runs on other banks contagious runs may occur even if i depositors choose the pareto dominant equilibrium when there are multiple equilibria and ii the deposit contract is chosen to maximize depositor welfare the feasibility of reforming the fdic to impose market discipline is also investigated

farm level constraints on the domestic supply of perennial energy crops in the uk abstract there are a number of estimates of the land area that could potentially be dedicated to perennial energy crops such as short rotation coppice src willow and miscanthus in the uk but little is known about how farmers will respond to the opportunities presented by these relatively novel crops perennial energy crops face competition from other arguably more flexible uses of farmland and if not seen as attractive propositions to individual farmers they will not be grown farmers decisions are therefore a key constraint on potential supply this paper reviews the policy background and considers whether policy is based on any consideration of likely supply response before presenting outcomes of focus groups composed of farmers who already grow or are considering growing perennial energy crops there appear to be a number of barriers to adoption in addition to concerns over the security of contracts the current high wheat price increases the opportunity cost of committing land to perennial energy crops there are also worries about the impact of willow roots on field drains and the cost of returning the land to other uses this paper outlines a number of issues of importance to policy makers and suggests future research needs

rollover risk network structure and systemic financial crises the breakdown of short term funding markets was a key feature of the global financial crisis of 2007 8 combining insights from the literature on global games and network growth we develop a simple model that sheds light on how network topology interacts with the funding structure of financial i nstitutions to determine system wide crises we show how the arrival of bad news about a financial institution leads others to lose confidence in it and how this in tu rn spreads across the entire interbank network the rate of system wide bank failure is rendered endogenous depending crucially on both the rate at which bad news arrives and on the maturity of debt contracts the conditions under which the financial system makes a sharp transition from a dense network of credit relations to a sparse network where credit freezes readily occur are characterized our results also emphasize the role of hysteresis once broken credit relatio ns take a long time to re establish as a result of common knowledge of the equilibrium our findings shed light on the nature of public policy responses both during and after the crisis

conceptualising multi regime interactions the role of the agriculture sector in renewable energy transitions abstract the agriculture sector plays an important role in renewable energy transitions owing to its historical involvement in managing key resources particularly land and biomass we develop the multi level perspective in relation to these emergent transition processes conceptualising transitions towards renewable electricity production as examples of multi regime interaction between national level agriculture and electricity regimes we focus particularly on the role of niche anchoring into multiple regimes as the mechanism through which multi regime interaction occurs utilising case studies in germany the czech republic and the united kingdom analysis suggests the birth of a new fiat regime oriented towards renewable electricity production we suggest that fiat regimes which are heavily dependent on policy supports are often multifunctional in nature in addition we argue that agriculture s inherent connection to land demonstrates one of the specific characteristics of fiat regimes fiat regimes are constructed largely in response to policy efforts to produce or protect public goods such as natural resources as opposed to market regimes based on technological developments findings demonstrate support for the special case of the agriculture sector in transition processes high degrees of policy involvement led to windows of opportunity created largely in response to national and international policy agendas and the multiple functions of agriculture were reflected in competition between agriculture and electricity sectors over natural resource access as renewable energy currently represents a secondary transition in the agriculture sector we suggest that further attention needs to be paid to the impact of fiat regime policies on secondary transition processes

the adoption of switchgrass and miscanthus by farmers impact of liquidity constraints and risk preferences lignocellulosic biomass is expected to become a key feedstock for renewable energy production however the potential supply strongly depends on farmers willingness to grow the new perennial energy crops many economic assessments have been led at the farm level all based on the standard net present value approach this paper looks into the effect of farmers liquidity constraints and risk preferences on switchgrass and miscanthus adoption by farmers we study the problem of the land allocation between a traditional cropping system and an innovative one in a static framework using four intertemporal choice models we find that in central france agronomic and economic conditions switchgrass and miscanthus result to be less profitable in terms of annualised net margin than the usual rape wheat barley rotation nevertheless they can be highly competitive as diversification crops when appropriate contracts are offered to farmers despite the additional liquidity they require

transactions costs and agricultural household supply response we develop and estimate a model of supply response when transactions costs create a situation where some producers buy others sell and others do not participate in markets we present two rationales for why producing households may have different relationships to the market proportional and fixed transactions costs using data on mexican corn producers we estimate an empirical model that allows for separate tests of the significance of both types of transactions costs revealing that both fixed and proportional transactions costs matter for the estimation the results provide consistent estimates of supply elasticity and measures of the relative importance of factors determining both proportional and fixed transactions costs

uncertainty in an interconnected financial system contagion and market freezes this paper studies contagion and market freezes caused by uncertainty in financial network structures our model demonstrates that in a financial system where financial institutions are interconnected a negative shock to an individual financial institution could spread to other institutions causing market freezes because of creditors uncertainty about the financial network structure our model also reveals that when both a large creditor and a continuum of small creditors are present the size of the large creditor will affect the severity of market freezes substantially moreover our model is used to examine central bank policies to alleviate market freezes

current and future financial competitiveness of electricity and heat from energy crops a case study from ireland abstract it has been demonstrated that miscanthus and willow energy crop cultivation could be economically competitive with current agricultural land uses at a farm gate biomass price ranging from 70 to 130 t 1 dry matter styles d thorne f jones m b in review energy crops in ireland an economic comparison of willow and miscanthus production with conventional farming systems biomass and bioenergy may 2006 this paper uses the same farm gate prices to calculate the economic competitiveness of energy crop electricity and heat production using a net present value npv approach 20 year period 5 discount rate direct and gasified co firing of willow wood with coal would result in electricity generation 30 or 37 more expensive than coal generation at current coal and co 2 allowance prices and a farm gate biomass cost of 100 t 1 break even co 2 allowance prices are 33 and 37 t 1 respectively however co firing of miscanthus with peat is close to economic competitiveness and would require a co 2 allowance price of 16 t 1 to break even against a current price of 12 t 1 npv analyses indicate that wood heat is significantly cheaper than oil gas or electric heat excluding existing wood boiler installation subsidies discounted annual savings range from 143 compared with gas to 722 compared with electric heating at the domestic scale and from 3454 to 11 222 at the commercial scale inclusion of available subsidies improves the comparative economics of domestic wood heat substantially the economic advantage of wood heat is robust to variation in fuel prices discount rates and heat loads the greatest obstacles to energy crop utilisation include i a reluctance to consider long term economics ii possible competition from cheaper sources of biomass iii the need for a spatially coordinated supply and utilisation network

modelling farmer uptake of perennial energy crops in the uk abstract the uk biomass strategy suggests that to reach the technical potential of perennial energy crops such as short rotation coppice src willow and miscanthus by 2020 requires 350 000 hectares of land this represents a more than 20 fold increase on the current 15 546 hectares previous research has identified several barriers to adoption including concerns over security of income from contracts in addition farmers perceive returns from these crops to be lower than for conventional crops this paper uses a farm level linear programming model to investigate theoretical uptake of energy crops at different gross margins under the assumption of a profit maximising decision maker and in the absence of known barriers to adoption the findings suggest that while src willow at current prices remains less competitive returns to miscanthus should have encouraged adoption on a wider scale than at present this highlights the importance of the barriers to adoption recently announced contracts for miscanthus appear to offer a significant premium to farmers in order to encourage them to grow the crops this raises the question of whether a more cost effective approach would be for government to provide guarantees addressing farmers concerns including security of income from the contracts such an approach should encourage adoption at lower gross margins

the impact of agricultural extension on farm production in resettlement areas of zimbabwe in this paper we revisit the contested issue of the impact of agricultural extension on farm production we exploit two features of the data available to us its longitudinal nature and explicit measures of farmer ability we find that after controlling for innate productivity characteristics and farmer ability either using household fixed effects estimation or by including a measure of farmer ability and village fixed effects access to agricultural extension services defined as receiving one or two visits per agricultural year raises the value of crop production by about 15 per cent this parameter estimate is statistically significant however we also find variability in these parameter estimates across individual crop years with the impact being markedly different in drought and non drought years collectively these results suggest that although access to farm level extension visits does increase productivity even after controlling for innate productivity characteristics and farmer ability results from single year cross sectional studies should be treated with caution

dynamic debt runs we develop a dynamic model of debt runs on a rm which invests in an illiquid asset by rolling over staggered short term debt contracts i e dierent contracts mature at dierent times we derive a unique threshold equilibrium in which creditors coordinate their asynchronous rollover decisions based on the rm s publicly observable and time varying fundamental the coordination problem ampli es the creditors concerns about the rm s future rollover risk created by its time varying fundamental and causes each maturing creditor to run ahead of others even when the current fundamental is substantially higher than its liability our model provides a set of implications on the roles played by volatility illiquidity and debt maturity in driving debt runs as well as on rms capital adequacy standards and credit risk

outside and inside liquidity we propose an origination and contingent distribution model of banking in which liquidity demand by short term investors can be met with cash reserves inside liquidity or sales of assets outside liquidity to long term investors outside liquidity is a more e cient source but asymmetric information about asset quality can introduce a friction in the form of excessively early asset trading in anticipation of a liquidity shock excessively high cash reserves and too little origination of assets by banks the model captures elements of the current flnancial crisis and yields policy prescriptions on public liquidity provision to overcome liquidity crises

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

information learning and wage rates in low income rural areas in this essay we present evidence that employers in rural areas of developing countries have imperfect information with regard to the productivity of heterogeneous workers in addition to obtaining direct measures of the completeness of employer information we consider the implications of information asymmetries for the structure of casual labor markets we then evaluate the extent to which casual labor markets do in fact exhibit these attributes we find that 1 there is adverse selection out of the time rate labor market 2 employers discriminate statistically given two workers with different observed characteristics but the same actual productivity the worker from the group with the higher average productivity will have a higher wage 3 employers exhibit learning over time the extent of employer ignorance is negatively related to labor market exposure on the part of the workers and 4 calorie consumption affects productivity but is not rewarded in the time rate labor market in concluding we argue that an analysis of wage and employment patterns and the implications of these patterns for human capital investment in rural areas of developing countries that ignored the role of information problems could yield misleading conclusions

fear of fire sales illiquidity seeking and credit freezes is there any need to clean up a banking system in the midst of a crisis for instance by closing some weak banks and forcing others to sell bad assets or can one wait till the crisis is over we argue that an overhang of impaired banks that may be forced to sell assets in the future can increase the private returns to holding illiquid assets sufficiently that weak banks have no interest in selling them anticipating a potential future fire sale cash rich buyers have high expected returns to holding cash which also reduces their incentive to lock up money in term loans the potential for a worse fire sale than necessary as well as the associated decline in credit origination could make the crisis worse which is one reason it may make sense to clean up the system even in the midst of the crisis we discuss alternative ways of cleaning up the system and the associated costs and benefits

the influence of a renewable energy feed in tariff on the decision to produce biomass crops in ireland abstract a target of 30 per cent substitution of biomass for peat in the three peat fired power stations from 2015 has been set by the irish government however a knowledge gap exists on the extent to which irish farmers would actually choose to grow these crops an extension of the renewable energy feed in tariff refit scheme to include the co firing of biomass with peat in electricity generation would enable the power stations to enter into power purchase agreements ppas these offer a fixed price to farmers for biomass feedstock the decision to adopt biomass is represented as a constrained problem under certainty with the objective of profit maximisation the results showed that the price offered under a ppa has a large effect on the economic returns from biomass crops the price that the power stations previously estimated they would be able to pay at 46 and 48 per tonne for willow and miscanthus respectively was used as a starting point at this price the number of farmers who would choose to adopt biomass production is insufficient to achieve the national co firing target the target could be achieved at 70 and 65 per tonne for willow and miscanthus respectively

liquidity and valuation in an uncertain world abstract during the 2007 2009 financial crisis there was little or no trading in a variety of financial assets even though bid and ask prices existed for many of these assets we develop a model in which this illiquidity arises from uncertainty and we argue that this new form of illiquidity makes bid and ask prices unsuitable as metrics for establishing fair value for these assets we show how the extreme uncertainty that traders face can be characterized by incomplete preferences over portfolios and we use bewley s 2002 model of decision making under uncertainty to derive equilibrium quotes and the nonexistence of trading at these quotes we then suggest alternatives for valuing assets in illiquid markets

shocks and their consequences across and within households in rural zimbabwe abstract increasing attention is now being paid to poverty dynamics in developing countries this work links the extent to which households smooth consumption or smooth assets given income shocks the empirical evidence on the churning of households in and out of poverty and the possibility that temporary shocks can have permanent consequences using longitudinal data from rural zimbabwe this paper extends the discussion of these issues by disaggregating the impact of shocks by levels of asset holdings by disaggregating the impact of shocks on individual level welfare and by assessing the extent to which such shocks have permanent consequences by doing so it assesses the validity of distinguishing between asset and consumption smoothing and provides insights into whether poverty dynamics assessed at the household level provide an adequate picture of dynamics at the individual level

interbank lending and systemic risk systemic risk refers to the propagation of a bank s economic distress to other economic agents linked to that bank through financial transactions banking authorities often prevent systemic risk through an implicit insurance of interbank claims or by reducing interbank transactions and centralizing banks liquidity management this paper investigates whether the flexability afforded by decentralized bank interactions can be preserved while protecting the central banks from the necessity of conducting undesired rescue operations it develops a model in which decentralized interbank leading is motivated by peer monitoring in this context the paper derives the optimal prudential rules and in particular looks at the impact of interbank monitoring on the solvency and liquidity ratios of borrowing and lending banks last it provides conditions which a too big to fail policy is or is not justified and studies the possibility of propagation of a bank s liquidity shock throughout the financial system copyright 1996 by ohio state university press

balance sheet contagion japan has been in a slump for the past decade after gdp had been growing by on average 4 percent during the 1980 s the growth rate dropped to 1 percent in the 1990 s asset prices also fluctuated significantly capital gains on stocks and real estate in the 1980 s followed by capital losses in the 1990 s were both on the order of a few years worth of gdp even after taking inflation into account together with production and asset prices the fraction of nonperforming loans fluctuated substantially these are by no means all bank loans for the nonfinancial corporate sector in japan the ratio of financial assets to total assets is about 40 percent much higher than in the united states such financial assets include loans to and securities of other private agents that is nonfinancial institutions simultaneously borrow from and lend to each other on a significant scale many nonperforming loans are interlocked paralyzing the financial system it is important to recognize that these swings have been experienced by almost all sectors of the japanese economy yet in other countries comparable movements in asset prices have had less widespread consequences for example the recent fluctuations in the nasdaq index in the united states have been no smaller than those of asset prices in japan but the damage appears to be contained to closely related sectors although u s equity holders particularly pension funds have lost value the level of nonperforming loans is relatively limited up to now the question is why does there appear to be more contagion in some countries than in others has contagion anything to do with the nature of financing or the extent to which there are inter locking loans in this theoretical paper we examine two different mechanisms by which contagion may occur in both cases propagation is through balancesheet effects first through the indirect effects that fluctuations in asset prices have on collateral values second through the direct effects that default on or postponement of debt repayments have when there are chains of credit

rollover risk and market freezes the debt capacity of an asset is the maximum amount that can be borrowed using the asset as collateral we model a sudden collapse in the debt capacity of good collateral we assume short term debt that must be frequently rolled over a small transaction cost of selling collateral in the event of default and a small probability of meeting a buy to hold investor we then show that a small change in the asset s fundamental value can be associated with a catastrophic drop in the debt capacity the kind of market freeze observed during the crisis of 2007 to 2008 one of the many striking features of the crisis of 2007 to 2008 was the sudden freeze in the market for the rollover of short term debt from an in stitutional perspective the inability to borrow overnight against high quality but long term assets was a market failure that effectively led to the demise of a substantial part of investment banking in the united states more broadly it led to the collapse in the united states the united kingdom and other countries of banks and other financial institutions that had relied on signifi cant maturity mismatch between assets and liabilities and in particular on the rollover of short term wholesale debt in the asset backed commercial paper abcp and overnight sale and repurchase repo markets in this paper we are interested in developing a model of a sudden collapse in the ability to borrow short term against long lived assets in the absence of obvious problems of asymmetric information or fears about the value of col lateral we refer to this phenomenon as a market freeze more precisely a market freeze occurs when the debt capacity the maximum amount of collat eralized borrowing that can be supported by an asset is a small fraction of the fundamental value the economic value measured by the net present value npv of the stream of future returns an extreme form of a market freeze occurs when the fundamental value is close to the maximum possible value of the asset whereas the debt capacity is close to the minimum possible value of the asset

diet transformation in africa the case of ethiopia africa s food systems are changing fast amid rapid economic growth emerging urbanization and structural transformation in this study we use four rounds of nationally representative data from ethiopia to document changes in household food consumption patterns over a period of unprecedented economic growth we find that while the share of food in the total consumption basket is declining food quantities and calorie intakes have considerably increased between 1996 and 2011 a decomposition analysis suggests that this was mostly driven by improvements in household incomes a finding that is consistent across the calorie distribution also the content of the food basket is changing with a gradual shift toward high value foods such as animal products fruits and vegetables and processed foods overall this diet transformation has important implications for the food security debate and for agricultural and food policy in the country

economic evaluation of miscanthus production a review this paper reviews the peer reviewed literature dealing with the economics of miscanthus cultivation to identify factors influencing the adoption of miscanthus and to reveal shortcomings in research in total 51 studies have been identified for this review the majority of these publications are recent i e the majority is published after 2009 and concern case studies in europe particularly the uk and ireland and north america this review reveals that the economic viability of miscanthus depends on largely uncertain assumptions especially concerning yields 10 48 t dry matter per ha and prices 48 134 t dry matter but also concerning the lifespan 10 20 years and different cost items a lack of established markets high establishment costs and uncertainties arising to a large extent from the long term commitment are identified as major barriers to miscanthus adoption in addition the level of support for miscanthus production e g via subsidies is identified as crucial for miscanthus profitability but is found to be highly heterogeneous across countries next to diversity in agronomic and economic assumptions also the assessment criteria and research techniques used to investigate the profitability of miscanthus differ widely while the net present value criterion was most frequently used we identify a lack of approaches that account for risks and uncertainties which seem to potentially play a critical role in the uptake of miscanthus by farmers

crop diversification and child health empirical evidence from tanzania malnutrition is recognized as a major issue among low income households in developing countries with long term implications for economic development recently crop diversification has been considered as a strategy to improve nutrition and health however there is no systematic empirical evidence on the role played by crop diversification in improving human health we use three waves of the tanzania national panel survey to test the effect of crop diversification on child health we implement two instrumental variable approaches and perform several robustness checks to address potential endogeneity concerns we find a positive but small effect of an increase in crop diversification on child height for age z score through greater dietary diversity the effect is larger for subsistence households and children living in households with limited market access