threshold effects in price transmission the case of brazilian wheat maize and soya prices recent studies into price transmission have recognized the important role played by transport and transaction costs threshold models are one approach to accommodate such costs we develop a generalized threshold error correction model to test for the presence and form of threshold behavior in price transmission that is symmetric around equilibrium we use monthly wheat maize and soya prices from the united states argentina and brazil to demonstrate this model classical estimation of these generalized models can present challenges but bayesian techniques avoid many of these problems evidence for thresholds is found in three of the five commodity price pairs investigated

distinguishing between equilibrium and integration in spatial price analysis this article introduces a new spatial price analysis methodology based on maximum likelihood estimation of a mixture distribution model incorporating price transfer cost and trade flow data this method permits differentiation between market integration and competitive market equilibrium and derivation of intuitive measures of intermarket tradability competitive market equilibrium perfect integration segmented equilibrium and segmented disequilibrium one can also use these estimates to derive semiparametric measures of time varying regime probabilities to track changing market conditions an application to trade in soybean meal among pacific rim economies demonstrates the usefulness of the method copyright 2002 oxford university press

determination of the international maize price what is the growing role of brazil and ukraine this paper examines the relationships among maize prices for four countries to determine if newly emerging exporters brazil and ukraine influence the international price of maize our work focuses on each market s participation in the price discovery process rather than trying to determine a price leader we find that the united states plays the largest role in price discovery followed by argentina brazil and ukraine we also search for export thresholds and find that ukraine s contribution to price discovery rises slightly when an export threshold of 2 3 million tons is reached no export thresholds were found for brazil export thresholds for argentina were found but only have a minor impact on price relationships we also found that price relationships vary considerably across seasons of the year

climate policies in a second best world a case study on india abstract the aim of this article is to analyze the potential for synergies between climate policies and development in a case study on india focusing on the power sector sub optimalities to do so we use imaclim r a dynamic recursive energy economy model that represents a second best world with market imperfections and short run adjustments constraints along a long term growth path the analysis suggests i global carbon pricing induces prohibitive macroeconomic costs for the indian economy even in the case of significant financial transfers associated with a global cap and trade system and a contraction and convergence in 2100 allocation scheme and ii the most cost efficient climate policies are not uniform carbon pricing only the implementation of domestic policies suited to the national context for instance targeting sub optimalities in the power sector for india allows reducing significantly the macroeconomic costs induced by international mitigation policies

greenhouse gas models and abatement costs for developing nations a critical assessment numerous ghg policy studies are reported for developing countries most use demand driven bottom up models reported abatement costs vary significantly across countries for identical options this can cause policy conflicts such as for gef financing schemes top down macroeconomic studies for developing countries are scant their model structure assumes dynamics akin to developed market economies transitional dynamics of developing countries such as underdeveloped markets and informal activities are inadequately modelled policy analysis is thus restricted to market oriented alternatives while more relevant bifurcation scenarios along alternate development patterns are ignored alterations in model structure and policy analysis are proposed to represent the realities of developing nations

market integration and price transmission in consumer markets of developing countries abstract world prices for agricultural commodities surged in 2006 08 and then again in 2011 12 in many developing countries consumer prices for staple foods such as bread and rice mirrored these movements this paper examines whether prices in urban consumer markets within developing countries are co integrated with prices in world agricultural commodity markets using a single equation error correction model we examine the response of consumer prices for wheat rice maize and sorghum to changes in world market prices and exchange rates in urban centers of the developing world analyzing over 60 country commodity pairings we find that developing countries consumer markets are co integrated with world markets yet we also find that the transmission of changes in both world prices and real exchange rates to domestic consumer prices is not high and that the movement of domestic consumer prices to new equilibrium with world prices after a shock to the latter is relatively slow

modelling energy systems for developing countries abstract developing countries energy use is rapidly increasing which affects global climate change and global and regional energy settings energy models are helpful for exploring the future of developing and industrialised countries however energy systems of developing countries differ from those of industrialised countries which has consequences for energy modelling new requirements need to be met by present day energy models to adequately explore the future of developing countries energy systems this paper aims to assess if the main characteristics of developing countries are adequately incorporated in present day energy models we first discuss these main characteristics focusing particularly on developing asia and then present a model comparison of 12 selected energy models to test their suitability for developing countries we conclude that many models are biased towards industrialised countries neglecting main characteristics of developing countries e g the informal economy supply shortages poor performance of the power sector structural economic change electrification traditional bio fuels urban rural divide to more adequately address the energy systems of developing countries energy models have to be adjusted and new models have to be built we therefore indicate how to improve energy models for increasing their suitability for developing countries and give advice on modelling techniques and data requirements

evaluating the integration of contiguous discontinuous markets this paper applies the concepts of structural models of markets market integration and market discontinuity to show that discontinuous markets alter the integration characteristics of continuous markets when analyzing systems of contiguous markets some of which are discontinuous it appears that the continuous markets are less well integrated when the discontinuous markets are operating than when they are not operating

how is the liberalization of food markets progressing market integration and transaction costs in subsistence economies we propose a modification of baulch s parity bounds model to measure the market integration of food markets in developing countries instead of extrapolating a single observation of transaction costs we estimate transaction costs predicted transaction costs compare well with survey data of traders probabilities of market regimes computed on the basis of predicted transaction costs fluctuate significantly and do not support fixed regime probabilities over time the probability of market integration with trade decreases consistently during food shortages increasing either the probability of no trade or loss making trade or the probability of profitable but unexploited trade opportunities the data further support a negative trend in market integration with trade

toward a macroeconomics of the medium run these days macroeconomics has become more respectable than it used to be i can remember when many economists liked to say microeconomics is not problematic but i just don t understand macroeconomics there was a definite implication that something must be wrong with macroeconomics not with the observer of course macroeconomics cannot be exact it has to work by rough analogy and empirical compromise maybe a certain raffishness is inevitable most economists work on microeconomic problems with increasing use of new microeconomic data but now it is widely understood that macroeconomics is at the heart of economics it will not do to be snooty about it this centrality will continue for the best possible reason the need to understand current events especially unfavorable ones and to formulate policies even benign neglect is a policy to

elasticities of electricity demand in urban indian households abstract in the past several electricity demand studies have been published for india based on aggregate macro data at the country or sub national state level since the underlying theory of consumer demand is based on the behaviour of individual agents the use of micro data which reflects individual and household behaviour more closely can shed greater light on the nature of consumer responses in this paper seasonal price and income elasticities of electricity demand in the residential sector of all urban areas of india are estimated for the first time using disaggregate level survey data for about 30 000 households three electricity demand functions have been econometrically estimated using monthly data for the winter monsoon and summer season in order to understand the extent to which factors like income prices household size and other household specific characteristics influence variations observed in individual households electricity demand the results show electricity demand is income and price inelastic in all three seasons and that household demographic and geographical variables are significant in determining electricity demand

modeling energy and development an evaluation of models and concepts most global energy models are developed by institutes from developed countries focusing primarily on issues that are important in industrialized countries evaluation of the results for asia of the ipcc sres models shows that broad concepts of energy and development the energy ladder and the environmental kuznets curve can be observed in the results of the models however improvements can be made in modeling the issues that underlie these concepts like traditional fuels electrification economic structural change income distribution and informal economies given the rapidly growing importance of energy trajectories of developing countries for global sustainability the challenge for the future is to develop energy models that include all these aspects of energy and development

a flexible parametric garch model with an application to exchange rates many asset prices including exchange rates exhibit periods of stability punctuated by infrequent substantial often one sided adjustments statistically this generates empirical distributions of exchange rate changes that exhibit high peaks long tails and skewness this paper introduces a garch model with a flexible parametric error distribution based on the exponential generalized beta egb family of distributions applied to daily us dollar exchange rate data for six major currencies evidence based on a comparison of actual and predicted higher order moments and goodness of fit tests favours the garch egb2 model over more conventional garch t and egarch t model alternatives particularly for exchange rate data characterized by skewness copyright 2001 john wiley sons ltd

market analysis methods are our enriched toolkits well suited to enlivened markets the past fifteen years have brought historic reduction of government intervention in agricultural markets in the developing world most economists and policy makers believe these reforms enliven markets previously fettered by excessive government authority nonetheless the impact of market oriented reforms on the spatial and intertemporal extent and the competitiveness of markets remains an inherently empirical question meanwhile there also have been major innovations in methods used to analyze markets and prices due largely to the rapidly emerging time series econometric literature agricultural economists toolkits have changed nearly as rapidly and dramatically as have developing economy markets but can these enriched toolkits answer the

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

dynamics of unemployment vacancies and real wages with trade unions this paper considers the response of wages unemployment and vacancies to shocks when the number of job slots and real wages are determined by a nash bargain between a firm and a small union unemployment and vacancies co exist because of search considerations there is a unique natural unemployment rate which ensures that every firm union s bargained wage is stationary shocks that are eventually absorbed by wages cause deviations of unemployment from its natural rate because the firm union initial response to a shock is to change vacancies and possibly wages which cause changes in unemployment flows via the search process

cost of unserved power in karnataka india this paper proposes an empirical analysis concerning the cost of unserved energy cue or value of lost load in agriculture and industrial sectors and provides insights that can provide useful inputs in designing effective policies for the power sector about 500 manufacturing units and 900 farmers were surveyed in the south indian state of karnataka using a two stage random sampling to provide interval estimates of cue for the industrial and agricultural consumers the results from the survey help in providing guidance on consumer perceptions and their willingness to pay different or higher tariffs the estimated economic loss due to power outage in the agriculture sector varies from 1 9 to 3 6 of total state domestic product sdp i e rs 950 billion at 1999 2000 prices while in industry the economic loss varies between 0 04 and 0 17 of total sdp depending upon the size of industry during the study period in 1999

world market integration for export and food crops in developing countries a case study for mali and nicaragua using a generalized error correction model this article measures and compares market integration for export cash crops versus imported food crops for mali and nicaragua and computes transmission elasticities between changes in the goods border and domestic prices both mali and nicaragua obtain the bulk of their export revenue from a particular agricultural commodity cotton for mali and coffee for nicaragua and both import the same key staple food of rice to reap the economic gains from this trade specialization the two countries agriculture must be well integrated into world markets the two countries present an important policy contrast that affects their degree of world market integration and price transmission in mali a parastatal enterprise controls its cotton industry while nicaragua has less state direction over agriculture reflecting this difference the results show that for both its main export and import commodity nicaragua is more integrated into world markets and has higher price transmission than mali the results for nicaragua also show much higher integration and price transmission for its main agricultural export coffee than its major import rice

on the extent of the market wholesale gasoline in the northeastern united states this paper develops the classical view of the extent of markets by introducing explicitly in the analysis the concept of arbitrage costs arbitrage or transaction costs imply that market boundaries are essentially stochastic while a set of products or regions may have binding arbitrage conditions i e may be in the same market at a given point in time they may not at another thus in defining a market the probability that a set of agents or regions would h3ve binding arbitrage conditions has to be assessed this paper develops an econometric methodology to estimate the transaction costs required to arbitrage among a given set of products as well as the probability that that set of products would be bound by binding arbitrage condi tions finally the methodology is applied to wholesale gasoline in the northeastern part of the united states address for communications pablo t spiller herbert hoover memorl l bldg 9348 stanford ca 94305

modelling trends in food market integration method and an application to tanzanian maize markets abstract pushed by increasing availability of price data and extensive market liberalisation efforts in many developing countries research on food market integration has evolved rapidly over the last two decades empirical methods to measure market integration diverged in two directions on the one hand there is the parity bounds model pbm using a switching regressions technique while on the other hand the use of threshold autoregressive tar models has been proposed this article provides a discussion on the two methods and argues that tar models are better able to capture the dynamics of the arbitrage process underlying interconnected markets furthermore we extend the standard tar model to include a time trend in both the threshold and the adjustment parameter using weekly maize price data on seven selected markets in tanzania we illustrate how both transaction cost and the speed of adjustment have changed during the nineties

market integration efficiency of arbitrage and imperfect competition methodology and application to u s celery this paper develops and applies a methodology to test for efficiency of interregional commodity arbitrage application of the methodology requires only time series data on prices for alternative cities regions countries or product forms yet the approach is capable of generating evidence on a number of market parameters including market integration arbitrage efficiency the magnitude of marketing margins product substitutability and competitiveness of markets estimation is based on a switching regression model with three regimes efficient arbitrage relative shortage and relative glut results from application of the model to u s celery marketing indicated significant departures from efficient arbitrage for both california and florida celery

the structure of the climate debate first best climate policy is a uniform carbon tax which gradually rises over time civil servants have complicated climate policy to expand bureaucracies politicians to create rents environmentalists have exaggerated climate change to gain influence other activists have joined the climate bandwagon opponents to climate policy have attacked the weaknesses in climate research the climate debate is convoluted and polarized as a result and climate policy complex climate policy should become easier and more rational as the paris agreement has shifted climate policy back towards national governments changing political priorities austerity and a maturing bureaucracy should lead to a more constructive climate debate

distributional impacts of climate change mitigation in indian electricity the influence of governance abstract studies that examine the distributional impacts of climate change mitigation policies often neglect the influence of institutions that implement these policies this study examines the short term consumption side distributional impacts of expanding low carbon electric supply in the state of maharashtra india with a focus on the influence of regulatory discretion in pricing households welfare impacts from economy wide electricity price shocks are simulated against a baseline that is calibrated to actual household economic and electricity service conditions including actual electricity budgets block tier prices and supply rationing industrial price impacts are propagated to households using a leontief input output analysis regulatory pricing decisions are evaluated based on social welfare metrics for economic efficiency and income inequality the analysis reveals new linkages between climate change mitigation electricity policy and income distribution low income households can be shielded from mitigation impacts without losses in aggregate welfare to the extent that regulators can recover mitigation costs through industrial price increases regulators flexibility to distribute costs across households is constrained by industrial customers migration off the grid reduced supply interruptions to the rural poor from the resulting demand contraction are a potential co benefit of mitigation distributional impacts therefore depend on other electricity policies that are driven by the political economy of the sector

testing market integration a model of spatial price differentials for a tradable good is proposed which avoids the inferential dangers of received methods using static price correlations the proposed method also extracts more information on the causes of price differentials from the same data the method is illustrated using monthly rice price data for postindependence bangladesh including the very substantial regional price shocks during the 1974 famine impediments to market integration are indicated

testing for food market integration revisited this article considers the statistical performance of four commonly used econometric tests for market integration the law of one price the ravallion model cointegration and granger causality a spatial price equilibrium spe model that is subject to both production shocks and general price inflation and mimics many of the key characteristics of integrated food markets is constructed the model is used to generate food price time series of lengths that are typical of the short sample sizes available in most developing countries for both instantaneously integrated and independent markets a series of monte carlo experiments on these artificial food price time series are performed which show that all four of the conventional tests for market integration are statistically flawed