the expansion of modern agriculture and global biodiversity decline an integrated assessment the world is banking on a major increase in food production if the dietary needs and food preferences of an increasing and increasingly rich population are to be met this requires the further expansion of modern agriculture but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity ecologists have shown that biodiversity loss results in lower plant productivity while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields and sometimes lower mean yields in this paper we consider the macro economic consequences of the continued expansion of particular forms of intensive modern agriculture with a focus on how the loss of biodiversity affects food production we employ a quantitative structurally estimated model of the global economy which jointly determines economic growth population and food demand agricultural innovations and land conversion we show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion

the impact of aid on growth revisited do donor motives matter abstract the typical identification strategy in aid effectiveness studies assumes that donor motives do not influence the impact of aid on growth we call this homogeneity assumption into question constructing a model in which donor motives matter and testing the assumption empirically

international consumption risk sharing this paper formally examines the implications of international consumption risk sharing for a panel of industrialized countries we theoretically derive the international consumption insurance proposition in a simple setup and show how to modify it in more complicated models we analyze the implications of the theory for pairs of countries and find that aggregate domestic consumption is almost completely insured against idiosyncratic real demographic fiscal and monetary shocks over short cycles but that it covaries with these variables over medium and long cycles the cross equation restrictions imposed by the theory are rejected the policy implications are discussed

low emission development strategies in agriculture an agriculture forestry and other land uses afolu perspective summary as countries experience economic growth and choose among available development pathways they are in a favorable position to adopt natural resource use technologies and production practices that favor efficient use of inputs healthy soils and ecosystems current emphasis on increasing resilience to climate change and reducing agricultural greenhouse gasses ghg emissions strengthens the support for sustainable agricultural production in fact reducing losses in soil fertility reclaiming degraded lands and promoting synergistic interaction between crop production and forests are generally seen as good climate change policies in order for decision makers to develop long term policies that address these issues they must have tools at their disposal that evaluate trade offs opportunities and repercussions of the options considered in this paper the authors combine and reconcile the output of three models widely accessible to the public to analyze the impacts of policies that target emission reduction in the agricultural sector we present an application to colombia which reveals the importance of considering the full scope of interactions among the various land uses results indicate that investments in increasing the efficiency and productivity of the livestock sector and reducing land allocated to pasture are preferable to policies that target deforestation alone or target a reduction of emissions in crop production investments in livestock productivity and land carrying capacity would reduce deforestation and provide sufficient gains in carbon stock to offset greater emissions from increased crop production while generating higher revenues

the future of food demand understanding differences in global economic models understanding the capacity of agricultural systems to feed the world population under climate change requires projecting future food demand this article reviews demand modeling approaches from 10 global economic models participating in the agricultural model intercomparison and improvement project agmip we compare food demand projections in 2050 for various regions and agricultural products under harmonized scenarios of socioeconomic development climate change and bioenergy expansion in the reference scenario ssp2 food demand increases by 59 98 between 2005 and 2050 slightly higher than the most recent fao projection of 54 from 2005 2007 the range of results is large in particular for animal calories between 61 and 144 caused by differences in demand systems specifications and in income and price elasticities the results are more sensitive to socioeconomic assumptions than to climate change or bioenergy scenarios when considering a world with higher population and lower economic growth ssp3 consumption per capita drops on average by 9 for crops and 18 for livestock the maximum effect of climate change on calorie availability is 6 at the global level and the effect of biofuel production on calorie availability is even smaller

trade in technology a potential solution to the food security challenges of the 21st century abstract the recent rise in caloric undernutrition in sub saharan africa ssa demonstrates the continued relevance of the malthusian footrace between food availability and population sluggish growth in farm productivity in ssa has brought to the fore the key role of agricultural technology in alleviating future food insecurity we develop a model of technology food security and international trade with three distinct channels for technology reduce food insecurity in ssa the first is via greater domestic r d investment an alternative is to import technologies from other countries with significant knowledge capital the third role for technology to resolve the malthusian dilemma in ssa is that of virtual technology trade i e importing technological investments undertaken elsewhere through cheaper imported food to assess the relative contribution of each channel to food security in africa we employ a partial equilibrium quantitative trade model augmented by a temporal relationship between r d investments knowledge capital and agricultural productivity over the historical period 1991 2011 we find that direct r d investments in ssa have been the dominant vehicle for lowering food prices in africa looking forward to 2050 we find that virtual technology trade will be the most important vehicle for reducing non farm undernutrition in africa

tastes and technology in a two country model of the business cycle explaining international trade on international financial markets allows people to insure country specific risk and smooth consumption intertemporally equilibrium models of business cycles with trade on global financial markets typically yield international consumption correlations near one and excessive volatility of investment the authors incorporate nontraded goods in the model and find that the implications for aggregate consumption investment and the trade balance are consistent with business cycle properties of industrialized countries however the model driven by technology shocks alone yields counterfactual implications for comovements between consumption and prices at the sectoral level taste shocks produce price quantity relationships more consistent with the data copyright 1995 by american economic association

macroeconomic linkages taxes and subsidies in the u s agricultural sector lj ar division of agricultural sciences unlversily of califorj ha ma croecono nc linkages t xes and subsidies in tiie u s agr cuttural secl or by gordon c rausser james a chalfant h alan love and kostas g stamoulis tt r i f r in i jq lifor ia agricultura experiment station clmoation of j gricultural economics january 1986

a global vector autoregression model for the analysis of wheat export prices food commodity price fluctuations have an important impact on poverty and food insecurity across the world conventional models have not provided a complete picture of recent price spikes in agricultural commodity markets and there is an urgent need for appropriate policy responses perhaps new approaches are needed to better understand international spill overs the feedback between the real and the financial sectors as well as the link between food and energy prices in this article we present the results from a new worldwide dynamic model that provides the short and long run impulse responses of the international wheat price to various real and financial shocks

introducing detailed land based mitigation measures into a computable general equilibrium model abstract we propose a new climate change mitigation assessment method focusing on agriculture forestry and land use change sectors by coupling the computable general equilibrium cge model with a bottom up type technology model the cge model covers the entire economic market but includes a rough description of mitigation measures whereas the bottom up type technology model takes into account abatement cost and mitigation effects of individual mitigation measures but only focuses on a few sectors the coupled framework enables us to connect relevant conditions and to complement the shortcomings of each model as a test we applied our method to indonesia which has set a national greenhouse gas emissions reduction target for 2020 a large proportion of indonesia s greenhouse gas emissions are from the land use sector we assessed the differences in modeling behaviors between the cge models with and without coupling the bottom up type model the two primary findings were 1 consumption loss estimated by the coupled cge 1 2 was larger than the loss estimated by the uncoupled model 0 5 because the emission reduction estimated by the bottom up model was less than the standalone cge s estimate and 2 consumption loss caused by achieving the reduction target by 2020 in indonesia strongly depends on the assumption of mitigation costs and available land area for the emission reduction measures

corrupt governments do not receive more state to state aid governance and the delivery of foreign aid through non state actors abstract a core result of the aid allocation literature is that the quality of governance in recipient countries does not affect the amounts of foreign aid received donor countries may still give aid to poorly governed countries because of a dilemma they face those countries most in need typically also lack proper institutions this paper argues that donors try to resolve this dilemma by delivering aid through non state actors using aid shares as well as absolute amounts of aid allocated through state and non state channels and considering different dimensions of governance we provide evidence that bypassing governments via ngos and multilateral organizations is indeed a response to weak recipient state institutions the effect is stronger in aid sectors where donors can more easily switch between channels and weaker for higher levels of economic self interest among donors

productivity growth and convergence in crop ruminant and non ruminant production measurement and forecasts there is considerable interest in projections of future productivity growth in agriculture whether one is interested in the outlook for global commodity markets future patterns of international trade or the interactions between land use deforestation and ecological diversity the rate of productivity growth in agriculture is an essential input yet solid projections for this variable have proven elusive particularly on a global basis this is due in no small part to the difficulty in measuring historical productivity growth the purpose of this paper is to report the latest time series evidence on total factor productivity growth for crops ruminants and non ruminant livestock on a global basis we then follow with tests for convergence amongst regions providing forecasts for farm productivity growth to the year 2040 the results suggest that most regions in the sample are likely to experience larger productivity gains in livestock than in crops within livestock the non ruminant sector is expected to continue to be more dynamic than the ruminant sector given the rapid rates of productivity growth observed recently non ruminant and crop productivity in developing countries may be converging to the productivity levels of developed countries for ruminants the results show that productivity levels may be diverging between developed and developing countries

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

dynamics and heterogeneity of inter and intranational risk sharing this study extends the empirical model of incomplete risk sharing developed by crucini 1999 by allowing unequal income pooling and explores the implications of using an alternative measure for aggregate risk based on samples from canadian provinces g 7 and oecd countries spanning the years 1961 2008 we show that the empirical procedure used by crucini tends to overstate the average degree of risk sharing and understate the dispersion of risk sharing when compared to our unequal income pooling model the empirical results from our unequal pooling model show that i the degree and dispersion of risk sharing across canadian provinces g 7 countries and oecd countries remain stable over time ii the degree of risk sharing across canadian provinces is higher than that across the g 7 and oecd countries and iii the degree of risk sharing seems positively related to equity and trade diversification

do performance measures of donors aid allocation underperform indices of donor performance abound their recent popularity has occurred within the context of pessimism over aid s impact and optimism over the effect of changes in donor behaviour rankings of donor allocative performance aim to change donor behaviour either through direct pressure on governments or indirectly through public engagement the indices themselves rely on descriptive measures and typically claim methodological superiority over positive alternatives due to their simplicity however there are two problems first measures do not seem robust to simple variations in methodology second correlation amongst competing indices is low leading to a host of contradictory judgements this offers neither clear technical guidance nor consistent political pressure the advantages and disadvantages of the approach are discussed building upon the more general critique of aggregate indices i suggest a graphical solution that embraces the advantages of the descriptive approach including ease of public communication while avoiding some of its major weaknesses which typically stem from aggregation

on the organisation of agricultural research in the united kingdom 1945 1994 a quantitative description and appraisal of recent reforms abstract in this paper we review recent radical changes in the structure and funding of agricultural and food research in the united kingdom we assemble data on the contributions of both public and private institutions during the past fifty years to put these changes in greater perspective they are then explained by the interaction of proactive governmental policies for the agricultural and food industries driven by external considerations with more reactive policies motivated by problems particular to these industries essentially the assumption that government intervention is required only when market incentives fail has dictated that public funding should be reallocated from technology transfer activities and productivity enhancing and near market research to basic research which affects a broader range of industries than just the food and agriculture industries and to public interest research on pressing problems of food safety and environmental protection we conclude that the much heralded notion of progress through partnership of the public and private sectors is not succeeding since the latter has not taken up the research abandoned by the former

international risk sharing and european monetary unification abstract we explore income and consumption smoothing patterns among european community ec countries and among oecd countries during the period 1966 90 we find that for oecd as well as for ec countries about 40 percent of shocks to gdp are smoothed at the one year frequency with about half the smoothing achieved through national government budget deficits and half by corporate saving at the three year differencing frequency only 25 percent of shocks to gdp are smoothed mainly via government lending and borrowing in the absence of alternative income and consumption smoothing mechanisms the restrictions on budget deficits imposed by the maastricht treaty should be relaxed to allow governments to run large temporary deficits in response to output shocks

fiscal flows in the united states and canada lessons for monetary union in europe regional flows of federal taxes and transfers within the united states and canada are used to analyze long term fiscal flows the redistributive element and short term responses to regional business cycles the stabilization element in the united states long run flows amount to 22 cents in the dollar while the stabilization effect is 31 cents in the dollar in canada the redistributive effect is larger 39 cents and the stabilization effect smaller 17 cents federal flows appears to depend on the institutional structure of the country concerned however in both countries the redistributive element is considerably larger than the amounts involved in the ec structural funds program as for stabilization national fiscal policies in the ec appear to have been as effective as federal governments in the united states and canada in cushioning shocks to incomes

why do global long term scenarios for agriculture differ an overview of the agmip global economic model intercomparison recent studies assessing plausible futures for agricultural markets and global food security have had contradictory outcomes to advance our understanding of the sources of the differences 10 global economic models that produce long term scenarios were asked to compare a reference scenario with alternate socioeconomic climate change and bioenergy scenarios using a common set of key drivers several key conclusions emerge from this exercise first for a comparison of scenario results to be meaningful a careful analysis of the interpretation of the relevant model variables is essential for instance the use of real world commodity prices differs widely across models and comparing the prices without accounting for their different meanings can lead to misleading results second results suggest that once some key assumptions are harmonized the variability in general trends across models declines but remains important for example given the common assumptions of the reference scenario models show average annual rates of changes of real global producer prices for agricultural products on average ranging between 0 4 and 0 7 between the 2005 base year and 2050 this compares to an average decline of real agricultural prices of 4 p a between the 1960s and the 2000s several other common trends are shown for example relating to key global growth areas for agricultural production and consumption third differences in basic model parameters such as income and price elasticities sometimes hidden in the way market behavior is modeled result in significant differences in the details fourth the analysis shows that agro economic modelers aiming to inform the agricultural and development policy debate require better data and analysis on both economic behavior and biophysical drivers more interdisciplinary modeling efforts are required to cross fertilize analyses at different scales

cross border returns differentials were the u s to persistently earn substantially more on its foreign investments u s claims than foreigners earn on their u s investments u s liabilities the likelihood that the current environment of sizeable global imbalances will evolve in a benign manner increases however we find that the returns differential of u s claims over u s liabilities is far smaller than previously reported and importantly is near zero for portfolio equity and debt securities for portfolio securities we confirm our finding using a separate dataset on the actual foreign equity and bond portfolios of u s investors and the u s equity and bond portfolios of foreign investors in the context of equity and bond portfolios we find no evidence that the u s can count on earning more on its claims than it pays on its liabilities finally we reconcile our finding of a near zero returns differential with observed patterns of cumulated current account deficits the net international investment position and the net income balance jel codes f3

aid policies and growth the authors of this paper use a new database on foreign aid to examine the relationships among foreign aid economic policies and growth of per capita gdp in panel growth regressions for 56 developing countries and 6 four year periods 1970 93 they find that the policies that have a great effect on growth are those related to fiscal surplus inflation and trade openness they construct an index for those three policies and have that index interact with foreign aid they have instruments for both aid and aid interacting with policies they find that aid has a positive impact on growth in developing countries with good fiscal monetary and trade policies in the presence of poor policies aid has no positive effect on growth this result is robust in a variety of specifications which include or exclude middle income countries include or exclude outliers and treat policies as exogenous or endogenous they examine the determinants of policy and find no evidence that aid has systematically affected policies either for good or for ill they estimate an aid allocation equation and show that any tendency for aid to reward good policies has been overwhelmed by donors pursuit of their own strategic interests in a counterfactual they reallocate aid reduce the role of donor interests and increasing the importance of policy such a reallocation would have a large positive effect on developing countries growth rates

what can explain the apparent lack of international consumption risk sharing recent research in international business cycles finds that international consumption comovements do not match the risk sharing predictions of standard complete markets models in this paper i ask whether two different types of explanations can help explain this result 1 nonseparabilities between tradables and nontradable leisure or goods and 2 the effects of capital market restrictions on consumption risk sharing i find that risk sharing cannot be resolved by either explanation alone however when i allow for both nonseparabilities and certain market restrictions risk sharing among unrestricted countries cannot be rejected this evidence suggests that a combination of these two effects may be necessary to explain consumption risk sharing across countries

contrasting approaches to projecting long run global food security the provision of food has been a central preoccupation of policy makers throughout history today we are witnessing a period of food security pessimism triggered by increases in food prices and their higher volatility that began in 2008 however previous episodes of food pessimism were ended by the industrial and green revolutions and policy makers legitimately ask whether human ingenuity and technical advances will address today s worries without the need for their intervention here we explore some of the ways natural and social scientists have attempted to explore the supply and demand for food in the future to help policy makers understand the challenges ahead we are particularly struck that different communities have approached this problem in different ways that seldom reference each other we describe two broad approaches statistical extrapolation and economic simulation models of the food system that incorporate market mechanisms we compare the strengths and weaknesses of the different approaches and make some tentative suggestions about how they can together address important policy priorities

consumption and real exchange rates in dynamic economies with non traded goods abstract we examine the possibility that non traded goods may account for several striking features of international macroeconomic data large persistent deviations from purchasing power parity small correlations of aggregate consumption fluctuations across countries and substantial international real interest rate differentials a dynamic exchange economy is used to show that non traded goods in principle can account for each of these phenomena in the theory there is a close relation between fluctuations in consumption ratios and those in bilateral real exchange rates but we find little evidence for this relation in time series data for eight oecd countries

the aid effectiveness literature the sad results of 40 years of research abstract the aid effectiveness literature ael consists of empirical macroeconomic estimates of the effects of development aid by the end of 2004 it comprised 97 econometric studies of three families of related effects each family has been analyzed in a separate meta analysis the ael is an ideal subject for meta analysis as it uses only a few formally similar models to estimate the same underlying effects it is also an area with strong beliefs often generated by altruism when this whole literature is examined a clear pattern emerges after 40 years of development aid the preponderance of the evidence indicates that aid has not been effective we show that the distribution of results is significantly asymmetric reflecting the reluctance of the research community to publish negative results the dutch disease effect on exchange rates provides a plausible explanation for the observed aid ineffectiveness

agriculture and climate change in global scenarios why don t the models agree agriculture is unique among economic sectors in the nature of impacts from climate change the production activity that transforms inputs into agricultural outputs involves direct use of weather inputs temperature solar radiation available to the plant and precipitation previous studies of the impacts of climate change on agriculture have reported substantial differences in outcomes such as prices production and trade arising from differences in model inputs and model specification this article presents climate change results and underlying determinants from a model comparison exercise with 10 of the leading global economic models that include significant representation of agriculture by harmonizing key drivers that include climate change effects differences in model outcomes were reduced the particular choice of climate change drivers for this comparison activity results in large and negative productivity effects all models respond with higher prices producer behavior differs by model with some emphasizing area response and others yield response demand response is least important the differences reflect both differences in model specification and perspectives on the future the results from this study highlight the need to more fully compare the deep model parameters to generate a call for a combination of econometric and validation studies to narrow the degree of uncertainty and variability in these parameters and to move to monte carlo type simulations to better map the contours of economic uncertainty

co movements in commodity prices a note based on network analysis this article analyses co movements in a wide group of commodity prices during the time period 1992 2010 our methodological approach is based on the correlation matrix and the networks inside through this approach we are able to summarize global interaction and interdependence capturing the existing heterogeneity in the degrees of synchronization between commodity prices our results produce two main findings a we do not observe a persistent increase in the degree of co movement of the commodity prices in our time sample however from mid 2008 to the end of 2009 co movements almost doubled when compared with the average correlation b we observe three groups of commodities which have exhibited similar price dynamics metals oil and grains and oilseeds and which have increased their degree of co movement during the sampled period

bilateral donors and the age of the national interest what prospects for challenge by development agencies summary foreign aid agencies represent and champion global development priorities within a donor nation increasingly however these agencies sit within donor governments that are strongly committed to upholding the national interest through their development commitments this paper is concerned with how bilateral aid agencies manage this tension and how they might continue to serve the altruistic aims of development the main research question asks if autonomy or a combination of autonomies can improve a development agency s ability to defend the humanitarian imperative of development against normative pressures privileging the national interest by drawing on theories of autonomy within public management literatures it is possible to identify points of leverage for development agencies where spaces for autonomous preferences and actions remain as well as sources of limitation where such opportunities are considerably reduced six types of autonomy are examined across three nations widely perceived as strong performers as donors norway the uk and sweden the paper suggests that while structural autonomy is critical for preserving humanitarian motivations there are also unexplored opportunities within other autonomous spheres a multi dimensional examination of autonomy highlights the varying capacity that development agencies have to resist pressures to strongly nationalize the global development project

full insurance in the presence of aggregate uncertainty this paper tests implications of full consumption insurance the object is to determine how much mileage can be obtained from a model with complete markets with such features as private information or liquidity constraints omitted the implication exploited is that individual consumption responds to aggregate risk but not to idiosyncratic risk the test involves regressing the change in household consumption onto the change in aggregate consumption and other right hand side variables such as the change in household income and change in employment status all variables other than the change in aggregate consumption are predicted to be insignificant in explaining the change in household consumption with observations on consumption and income for 10 695 households from the consumer expenditure survey the results are mixed the results for one specification exponential utility are mostly consistent with full consumption insurance the results for the other specification power utility are not

are valuation effects desirable from a global perspective abstract recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country this paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation of resources in a frictionless world it is desirable to have large movements in prices and exchange rates but once a small degree of price rigidity is introduced not only should prices be stabilized but also the response of the exchange rate should be muted there is a minor role for valuation effects that depends both on the size and composition of assets and liabilities

consequential life cycle assessment of bioenergy systems a literature review abstract policies and business decisions intended to promote the use of bioenergy should be based on accurate estimates of the sustainability impacts of various alternatives including indirect consequences of any change consequential life cycle assessment clca attempts to include such impacts in the analysis this paper reviews studies that have adopted a clca approach to analysing the use of bioenergy describing their main topics approaches empirical and methodological aspects and scenarios the review finds that the production of studies proceeded at a modest pace from 2007 with a significant increase occurring from 2015 onward the most studied impact is global warming potential gwp although other impacts are frequently taken into consideration a majority of the studies concern the agricultural followed by the forest sector the literature has a european emphasis and relatively few studies have focused on low and middle income countries the review also finds a diversity in terms of how empirical and methodological aspects are taken into consideration based on the findings of the review areas of improvement for future research are suggested an increased focus on bioenergy use in the household sectors more studies in under researched regions more precise explanations of the clca methods used a critical examination of the scenarios and methodological collaboration with economic bio sector modelling in addition the factors that affect the generalizability of the results can be discussed in a more systematic manner frameworks and procedures for improving the applicability and validity of clca will likely emerge as the research field develops

consumption real exchange rates and the structure of international asset markets abstract international real business cycle irbc models that assume complete asset markets yield strong restrictions for consumption and bilateral real exchange rate series empirical tests with data for the us japan france uk italy canada and sweden suggest that neither the trend behavior nor high frequency movements of consumption and real exchange rates are well explained by irbc models with complete markets it appears however that high frequency fluctuations of consumption and real exchange rates are consistent with unrestricted international trade in risk free bonds

the external wealth of nations measures of foreign assets and liabilities for industrial and developing countries abstract although capital flows are closely monitored surprisingly little is known about the accumulated stocks of foreign assets and liabilities held by various countries especially in the developing world this paper constructs estimates of foreign assets and liabilities and their equity and debt subcomponents for a sample of 67 industrial and developing countries it characterizes the stylized facts of international balance sheets and asks whether there are trends in net foreign asset positions and shifts in debt equity ratios over time finally it explores the sensitivity of estimated stock positions to the treatment of valuation effects not captured in balance of payments data

three bubbles and a panic an explanatory review of recent food commodity price events abstract this paper is a summary of the behaviour of food commodity prices in 2007 2008 and a review of the causes of the price increases extracted from a report to the chief scientific advisor to her majesty s government thirtle c piesse j 2008 an explanatory review of the world food commodity price events of 2007 2008 a report to the chief scientific advisor department for innovation universities and skills london the historical background shows that the price spike was much less severe than in the 1970s the conventional wisdom that prices of the main food commodities were falling prior to 2006 is questioned most ceased falling and were quite stable from the 1980s the paper separates the causes of the spike from the underlying changes driving the long run trends the literature on the causes of the spike is critically reviewed and summarised there is a reasonably broad consensus on most of the causes but much less on the impact of the depreciation of the us dollar there are also concluding speculations on the future

comparing supply side specifications in models of global agriculture and the food system this article compares the theoretical and functional specification of production in partial equilibrium pe and computable general equilibrium cge models of the global agricultural and food system included in the agmip model comparison study the two model families differ in their scope partial versus economy wide and in how they represent technology and the behavior of supply and demand in markets the cge models are deep structural models in that they explicitly solve the maximization problem of consumers and producers assuming utility maximization and profit maximization with production cost functions that include all factor inputs the pe models divide into two groups on the supply side 1 shallow structural models which essentially specify area yield supply functions with no explicit maximization behavior and 2 deep structural models that provide a detailed activity analysis specification of technology and explicit optimizing behavior by producers while the models vary in their specifications of technology both within and between the pe and cge families we consider two stylized theoretical models to compare the behavior of crop yields and supply functions in cge models with their behavior in shallow structural pe models we find that the theoretical responsiveness of supply to changes in prices can be similar depending on parameter choices that define the behavior of implicit supply functions over the domain of applicability defined by the common scenarios used in the agmip comparisons in practice however the applied models are more complex and differ in their empirical sensitivity to variations in specification comparability of results given parameter choices is an empirical question to illustrate the issues sensitivity analysis is done with one global cge model magnet to indicate how the results vary with different specification of technical change and how they compare with the results from pe models

risk sharing through capital gains we estimate channels of international risk sharing between european monetary union emu european union and other oecd countries 1992 2007 we focus on risk sharing through savings factor income flows and capital gains risk sharing through factor income and capital gains was close to zero before 1999 but has increased since then risk sharing from capital gains at about 6 is higher than risk sharing from factor income flows for european union countries and oecd countries risk sharing from factor income flows is higher for euro zone countries at 14 reflecting increased international asset and liability holdings in the euro area on examine les canaux de partage international du risque entre l union monetaire europeenne l union europeenne et les autres pays de l ocde 1992 2007 on se concentre sur le partage du risque via les epargnes les flux de revenus des facteurs et les gains de capitaux le partage du risque via les revenus des facteurs et les gains de capitaux a ete presque nul avant 1999 mais s est accru depuis le partage du risque via les gains de capitaux a peu pres 6 est plus grand que le partage du risque via les flux de revenus des facteurs pour les pays de l union europeenne et les pays de l ocde le partage du risque vis les flux de revenus des facteurs est plus eleve pour l euro zone a quelques 14 refletant le fait que les actifs et passifs internationaux detenus dans la zone euro se sont accrus

a simple test of consumption insurance are consumers effectively insured against idiosyncratic shocks to income or wealth either by formal institutions such as charities private insurance and government programs or by informal mechanisms such as gifts and loans from relatives friends and neighbors under full insurance consumption growth should be cross sectionally independent of idiosyncratic variables that are exogenous to consumers this proposition is tested by cross sectional regressions of consumption growth on a variety of exogenous variables full insurance is rejected for long illness and involuntary job loss but not for spells of unemployment loss of work due to strike and an involuntary move

multilateral aid and domestic economic interests existing studies of foreign aid suggest that donor countries economic groups such as exporters should be generally opposed to multilateral aid because multilateral flows do not allow donor countries to tie their aid implicitly or explicitly to the promotion of their domestic economic interests however economic groups can actually benefit from some types of multilateral aid and this serves as an incentive for donor governments to support international organizations generating the benefits i test my argument using data on aid allocated to the multilateral fund for the implementation of the montreal protocol and the global environment facility and international trade by commodity i find robust empirical support for the argument that when donors domestic economic groups are likely to gain from opportunities created by international environmental organizations programs donor governments increase aid allocations to these organizations

price trends and volatility scenarios for designing forest sector transformation abstract potential scenarios for the forest bioeconomy are heavily reliant on price assumptions in particular any abrupt changes in prices have a profound impact on the relevancy of any sector analysis the objective of this paper was to demonstrate a new forest sector approach for incorporating price uncertainties in order to improve our assessment of investment decision making alternatives methodologically we linked a multivariate generalized autoregressive conditional heteroscedasticity model mgarch 1 1 with three global land use scenarios that are of strategic importance to the forest bioeconomy the three scenarios were formulated as i a business as usual scenario ii a high biomass usage scenario and iii a no growth scenario our results indicate an upward trend in prices over time for all three scenarios and for most woody biomass commodities under all scenarios price volatility in the forest sector would be smaller than that for the fossil fuel energy i e oil and natural gas price volatilities from fossil fuel markets are positively influencing woody biomass price volatility and positively influencing pulp volatility these results are discussed in the context of a case study describing investment alternatives for a district heating facility with options for woody biomass natural gas or heating oil

consumption smoothing and housing capital gains evidence from australia canada and new zealand using regional level panel data of three developed countries comprising australia canada and new zealand the study investigates the response of consumption smoothing to housing capital gains t

determinants of risk sharing through remittances abstract the sending of remittances is a decentralised decision of migrant workers nevertheless it has macroeconomic implications in providing insurance against domestic output shocks in the recipient economies a phenomenon known in literature as risk sharing income smoothing using a large sample of 86 developing countries for the period 1990 2010 we establish that remittance inflows serve as an important channel through which risk sharing takes place in the developing world the extent of income smoothing via remittances stands at around 5 on average subsequently we explore the underlying factors that explain countries ability to share risk through remittances the diversification of migrants turns out to be the leading explanation for the extent of risk sharing via remittances the more diverse the migration destinations of a country the higher the amount of risk shared in addition the size of remittance flows appears to have a strong and statistically significant impact on enhancing risk sharing we also find suggestive evidence that a higher proportion of remittances originating from farther countries facilitate more risk sharing compared to those originating from neighbouring or regional economies

what lies beneath the euro s effect on financial integration currency risk legal harmonization or trade abstract although recent research shows that the euro has spurred cross border financial integration the exact mechanisms remain unknown we investigate the underlying channels of the euro s effect on financial integration using data on bilateral banking linkages among twenty industrial countries in the past thirty years we also construct a dataset that records the timing of legislative regulatory harmonization policies in financial services across the european union we find that the euro s impact on financial integration is primarily driven by eliminating the currency risk legislative regulatory convergence has also contributed to the spur of cross border financial transactions trade in goods while highly correlated with bilateral financial activities does not play a key role in explaining the euro s positive effect on financial integration

risk sharing role of foreign aid in developing countries abstractthe effects of foreign aid on economic growth have been extensively investigated over the past 40 years however even though foreign aid can be a significant source of insurance against do

home bias and international risk sharing twin puzzles separated at birth abstract we document that international home bias in debt and equity holdings declined during the period 1993 2003 at the same time as international risk sharing increased using panel data regressions for oecd countries we demonstrate that less home bias is associated with more international risk sharing more generally we show that more financial integration is associated with more risk sharing when we measure financial integration as the ratio of foreign assets to gross domestic product our results indicate that risk sharing and international financial integration are closely related empirical phenomena

explaining grain and oilseed price volatility the role of export restrictions this study examines the impact that export restrictions have had on price volatility food price volatility causes planning problems for policy makers and is disruptive to the food supply chain an increasingly common response to stabilizing domestic prices is to implement export restrictions however if the country is a large enough exporter the restriction can exacerbate global price volatility using price data on maize wheat rice and soy we estimate the effect of export taxes and quantitative restrictions as well as other macroeconomic variables on price volatility first we use a univariate structural time series approach to remove regularities such as cycles and trends to yield an estimate of filtered price volatilities second we regress the estimated volatilities from the first stage on a set of explanatory variables using a generalized method of moments gmm approach the results from the gmm regression show that export restrictions implemented between 2006 and 2011 increased price volatility for wheat and rice but not maize and soybean simulation results show that the contribution of export restrictions to price volatility is the same order of magnitude as key macroeconomic variables

aid and growth what does the cross country evidence really show abstract we examine the effects of aid on growth in cross sectional and panel data after correcting for the possible bias that poorer or stronger growth may draw aid contributions to recipient co

the sectoral and regional economic consequences of climate change to 2060 this paper presents a new detailed global quantitative assessment of the economic consequences of climate change i e climate damages to 2060 the analysis is based on an assessment of a wide range of impacts changes in crop yields loss of land and capital due to sea level rise changes in fisheries catches capital damages from hurricanes labour productivity changes and changes in health care expenditures from diseases and heat stress changes in tourism flows and changes in energy demand for cooling and heating a multi region multi sector dynamic computable general equilibrium model is used to link different impacts until 2060 directly to specific drivers of economic growth including labour productivity capital stocks and land supply as well as assess the indirect effects these impacts have on the rest of the economy and on the economies of other countries it uses a novel production function approach to identify which aspects of economic activity are directly affected by climate change the model results show that damages are projected to rise twice as fast as global economic activity global annual gross domestic product losses are projected to be 1 0 3 3 by 2060 of the impacts that are modelled impacts on labour productivity and agriculture are projected to have the largest negative economic consequences damages from sea level rise grow most rapidly after the middle of the century damages to energy and tourism are very small from a global perspective as benefits in some regions balance damages in others climate induced damages from hurricanes may have significant effects on local communities but the macroeconomic consequences are projected to be very small net economic consequences are projected to be especially large in africa and asia where the regional economies are vulnerable to a range of different climate impacts for some countries in higher latitudes economic benefits can arise from gains in tourism energy and health the global assessment also shows that countries that are relatively less affected by climate change may reap trade gains

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

impacts of increased bioenergy demand on global food markets an agmip economic model intercomparison integrated assessment studies have shown that meeting ambitious greenhouse gas mitigation targets will require substantial amounts of bioenergy as part of the future energy mix in the course of the agricultural model intercomparison and improvement project agmip five global agro economic models were used to analyze a future scenario with global demand for ligno cellulosic bioenergy rising to about 100 exajoule in 2050 from this exercise a tentative conclusion can be drawn that ambitious climate change mitigation need not drive up global food prices much if the extra land required for bioenergy production is accessible or if the feedstock for example from forests does not directly compete for agricultural land agricultural price effects across models by the year 2050 from high bioenergy demand in an ambitious mitigation scenario appear to be much smaller 5 average across models than from direct climate impacts on crop yields in a high emission scenario 25 average across models however potential future scarcities of water and nutrients policy induced restrictions on agricultural land expansion as well as potential welfare losses have not been specifically looked at in this exercise

valuation effects and the dynamics of net external assets abstract valuation effects can imply that the traditional current account is an inaccurate measure of the change in the net foreign asset nfa position this paper uses new developments in the analysis of portfolio choice in general equilibrium to investigate valuation effects in a two country model broadly speaking the valuation effects in the model correspond to those observed in the data but there is a key distinction between unanticipated and anticipated valuation effects unanticipated effects can be large dominating the movement in nfa but anticipated effects arise only at higher orders of approximation and are small for reasonable parameterizations