international taxation and the direction and volume of cross border m as we show that the parent subsidiary structure of multinational firms created by cross border mergers and acquisitions is affected by the prospect of international double taxation specifically the likelihood of parent firm location in a country following a cross border takeover is reduced by high international double taxation of foreign source income at the same time countries with high international double taxation attract smaller numbers of parent firms a unilateral elimination of worldwide taxation by the united states is simulated to increase the proportion of parent firms locating in the united states following cross border mergers and acquisitions from 53 to 58

on the existence of sunspot equilibria in an overlapping generations model abstract the existence of sunspot equilibria is shown in a one commodity overlapping generations model without stationarity assumptions on preferences endowments or nominal taxes the essential assumption is that there is a continuum of perfect foresight equilibria the technique is also useful for constructing stationary sunspot equilibria when they exist consumption in a sunspot equilibrium is shown to lie within the range consistent with perfect foresight

world poverty and the role of agricultural technology direct and indirect effects agricultural technology can help reduce poverty through direct and indirect effects direct effects are gains for the adopters while indirect effects are gains derived from adoption by others leading to lower food prices employment creation and growth linkage effects conceptualising and measuring these effects is highly complex yet is needed for each region if technology is to be used as an effective instrument for poverty reduction we propose a methodology for doing this in the context of computable general equilibrium modelling and apply it to archetype models for africa asia and latin america results show that the dominant effect of technology on poverty is through direct effects in africa indirect agricultural employment effects in asia and linkage effects through the rest of the economy in latin america in each case increasing the poverty reduction effect through the targeting of technology across crops and through complementary rural development programmes is also explored

cotton subsidies the wto and the cotton problem wto and the cotton problem following an 8 year long dispute over cotton subsidies brazil and the united states signed a memorandum of understanding on april 21 2010 effectively paving the way for settling the dispute this paperargues that cotton subsidies are just the tip of the iceberg while a number of other perhaps more important issues require attention and indeed political will chief among them is the persistent divergence between cotton prices and the prices of other agricultural commodities which reflects for the most part the large supply response by china and india a direct consequence of con version to biotech cotton varieties in these and other countries such response which kept cotton prices low compared with other commodities imposes a competitive disadvantage to non users of biotech cotton the paper also highlights two additional constraints faced by the cotton producing countries of west and central africa namely the structural inefficiencies of their primary processing industries also known as ginning and the appreciation of the cfa franc against the us dollar without downplaying the importance of subsidy elimination the paper concludes that these impediments should receive high priority in the policy agenda

a model of housing and credit cycles with imperfect market knowledge abstract the paper presents a model of housing and credit cycles featuring distorted beliefs and comovement and mutual reinforcement between house price expectations and price developments via credit expansion contraction positive negative development in house prices fuels optimism pessimism and credit expansion contraction which in turn boost dampen housing demand and house prices and reinforce agents optimism pessimism bayesian learning about house prices can endogenously generate self reinforcing booms and busts in house prices and significantly strengthen the role of collateral constraints in aggregate fluctuations the model can quantitatively account for the 2001 2008 u s boom bust cycle in house prices and associated household debt and consumption dynamics it also demonstrates that allowing for imperfect knowledge of agents a higher leveraged economy is more prone to self reinforcing fluctuations

the impact of agricultural biotechnology on yields risks and biodiversity in low income countries abstract this paper shows that the current generation of transgenic crop varieties has significant potential to improve economic welfare in low income countries these varieties might increase crop yields in low income countries in cases when pesticides have not been used they will reduce negative health effects of chemicals when they replace them with low transaction costs appropriate infrastructure and access to intellectual property multiple varieties of transgenics will be introduced the gain from transgenics will be reduced and crop biodiversity may be lost when only a small set of varieties is transgenetically modified the adoption of transgenics will also be affected by risk and credit considerations

corporate taxes and the location of intangible assets within multinational firms intangible assets like patents and trademarks are increasingly seen as the key to competitive success and as the drivers of corporate profit moreover they constitute a major source of profit shifting opportunities in multinational enterprises mnes due to a highly intransparent transfer pricing process this paper argues that for both reasons mnes have an incentive to locate intangible property at affiliates with a relatively low corporate tax rate using panel data on european mnes and controlling for unobserved time constant heterogeneity between affiliates we find that the lower a subsidiary s corporate tax rate relative to other affiliates of the multinational group the higher is its level of intangible asset investment this effect is statistically and economically significant even after controlling for subsidiary size and accounting for a dynamic intangible investment pattern

stealth seeds bioproperty biosafety biopolitics transgenic seeds in both india bt cotton and brazil glyphosate resistant soybeans spread widely and rapidly through farming communities outside the reach of biosafety or bioproperty institutions stealth transgenics are saved cross bred repackaged sold exchanged and planted in an anarchic agrarian capitalism that defies surveillance and control of firms and states the outcome is more pro poor than alternative modes of diffusion but undermines a growing consensus in the international development community on appropriate bio safety and intellectual property institutions for biotechnology second stealth procurement of biotechnology divides nominally pro poor political coalitions driven by a great ideational divide on uncertainties and risks of transgenics the ability of seeds to move underground through stealth strategies of farmers undermines widely assumed bio safety regime capability likewise property in biotechnology appears less monopolistic and powerful more relational and contingent stealth practices of farmers in pursuit of transgenics contrary to wishes of firms states and many ngos suggest a different model of the farmer than that often encountered in both developmentalist and anti gmo discourse more active creative and autonomous less hapless and supine resultant incapacity of social institutions to secure interests of firms and states in biotechnology renders more likely eventual development of controls from genetic engineering the terminator technology of political dramaturgy

biotechnology boosts to crop productivity in china trade and welfare implications genetically modified gm cotton is widely adopted and the list of gm technologies in trials is impressive in china at the same time there is an active debate on when china should commercialize its gm food crops this paper provides an economy wide assessment of some of the issues surrounding the adoption and commercialization of biotechnology based on unique data from empirical micro level study and field trials in china and a modified gtap model our results indicate that the development of biotechnology has an important impact on china s production trade and welfare welfare gains far outweigh the public biotechnology research expenditures most gains occur inside china and can be achieved independently from biotech unfriendly polices adopted in some industrialized countries

the impact of bt cotton on poor households in rural india the impact of genetically modified gm crops on the poor in developing countries is still the subject of controversy while previous studies have examined direct productivity effects of bacillus thuringiensis bt cotton and other gm crops little is known about wider socioeconomic outcomes we use a microeconomic modelling approach and comprehensive survey data from india to analyse welfare and distribution effects in a typical village economy bt cotton adoption increases returns to labour especially for hired female workers likewise aggregate household incomes rise including for poor and vulnerable farmers hence bt cotton contributes to poverty reduction and rural development

the fragility of sunspots and bubbles abstract expectational stability e stability is used to examine the multiplicity of solutions in a range of rational expectations models of interest including muth s inventory model and an overlapping generations model in these model it is found that sunspot and other rational bubble solutions are either e unstable or weakly but not strongly e stable

foreign direct investment competition and industrial development in the host country this paper analyses the impact of foreign direct investment fdi on the development of local firms we focus on two likely effects of fdi a competition effect which deters entry of domestic firms and positive market externalities which foster the development of local industry using a simple theoretical model to illustrate how these forces work we show that the number of domestic firms follows a u shaped curve where the competition effect first dominates but is gradually outweighed by positive externalities evidence for ireland tends to support this result specifically applying semi parametric regression techniques on plant level panel data for the manufacturing sector we find that while the competition effect may have initially deterred local firms entry this initial effect has been outpaced by positive externalities making the overall impact of fdi largely positive for the domestic industry

international taxation and multinational firm location decisions using a large international firm level data set we examine the separate effects of host and additional parent country taxation on the location decisions of multinational firms both types of taxation are estimated to have a negative impact on the location of new foreign subsidiaries the impact of parent country taxation is estimated to be sizeable consistent with its international discriminatory nature our results show that international double taxation by the parent country despite the general possibility of deferral of taxation until income repatriation is instrumental in shaping the structure of multinational enterprise

life in a mexican village a sam perspective this article employs a social accounting matrix sam to analyse the economic structure of a migrant sending rural economy a village sam is constructed using 1982 household data from a major migrant sending village in central mexico the village matrix multiplier and its decompositions are derived from the sam and are utilised in policy experiments on the production value added income and investment flows of the village the results highlight the central role of both internal and international migration in the village economy as well as the importance of targeting directly anti poverty policies toward the landless

relocation of headquarters and international taxation about 6 of multinationals relocated their headquarters to another country in the 1997 2007 period this paper presents empirical evidence on the role of taxes in these relocation decisions it considers a sample of 140 multinationals that relocated their headquarters over the past decade and compares them to a control group of 1943 multinationals that did not relocate it is found that the additional tax due in the home country upon repatriation of foreign profits has a positive effect on the probability of relocation the empirical results suggest that an increase in the repatriation tax by 10 percentage points would raise the share of relocating multinationals by 2 2 percentage points equivalent to an increase in the number of relocations by more than one third furthermore the presence of controlled foreign corporation legislation also has a positive effect on the number of relocations

on non uniqueness in rational expectations models an attempt at perspective abstract many macroeconomic models involving rational expectations give rise to an infinity of solution paths even when the models are linear in all variables some writers have suggested that this non uniqueness constitutes a serious weakness for the rational expectations hypothesis one purpose of the present paper is to argue that the non uniqueness in question is not properly attributable to the rationality hypothesis but instead is a general feature of dynamic models involving expectations it is also argued that there typically exists in a very wide class of linear rational expectations models a single solution that excludes bubble or bootstrap effects one that occur only because they are arbitrarily expected to occur a systematic procedure for obtaining solutions free from such effects is introduced and discussed in addition this procedure is used to interpret and reconsider several prominent examples with solution multiplicities including ones developed by fischer black and john b taylor

the location of overseas production and production for export by u s multinational firms abstract the location of overseas manufacturing production is influenced by common factors that operate in all industries notably proximity to the united states and to other markets within industries opposites attract low wage and low capital intensity parents choose high wage countries production for export is attracted by large internal markets in host countries economies of scale in production presumably make large markets economical as export bases another factor is high trade propensities of host countries u s firms tend to export from high wage countries but labor cost is not in general a major influence on the location of export production

effective tax rates and the user cost of capital when interest rates are low abstract interest rates are a key component of both user cost and effective tax rate measures of company taxation and each is regularly used in empirical tests of tax impacts on investment however it is shown that when interest rates are low the two measures are not monotonically related using a simulated sample of observations this feature is found to generate perverse estimates of the effects of taxation on the investment plans of firms

convergence of least squares learning in environments with hidden state variables and private information we study the convergence of recursive least squares learning schemes in economic environments in which there is private information the presence of private information leads to the presence of hidden state variables from the viewpoint of particular agents by applying theorems of ljung we extend some of our earlier results to characterize conditions under which a system governed by leastsquares learning will eventually converge to a rational expectations equilibrium we apply insights from the learning results to formulate and compute the equilibrium of a version of townsend s model

potential impacts of bt eggplant on economic surplus and farmers health in india in this article the potential impacts of bt eggplant technology in indian agriculture are analyzed several proprietary bt hybrids are likely to be commercialized in the near future based on field trial data it is shown that the technology can significantly reduce insecticide applications and increase effective yields comprehensive farm survey data are used to project farm level effects and future adoption rates simulations show that the aggregate economic surplus gains of bt hybrids could be around us 108 million per year consumers will capture a large share of these gains but farmers and the innovating company will benefit too as the company has also shared its technology with the public sector bt open pollinated varieties might become available with a certain time lag this would make the technology more accessible especially for resource poor farmers entailing further improvements in welfare and distribution effects the wider implications of the private public technology transfer are discussed furthermore the potential benefits for farmers health resulting from reduced insecticide applications are examined using an econometric model and a cost of illness approach these benefits are worth an additional 3 4 million per year yet they constitute only a small fraction of the technology s environmental and health externalities more research is needed for comprehensive impact analysis

on the robustness of bubbles in linear re models the authors analyze the expectational stability e stability of the different solutions of a linear rational expectations model in which the endogenous variable depends on expectations of its current and future values formed in the past and also on its own lagged value it is shown that continuum of bubble solutions cannot be strongly e stable in contrast for certain parameter values a particular solution that would normally be identified as a bubble solution can be strongly e stable the results are applied to a macroeconomic model with real balance effects copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the transmission of production fluctuations and technical change in a village economy a social accounting matrix approach rural poverty in india remains a pervasive and pressing problem of development despite the favorable performance of agricultural production which has nearly doubled in the last 2 decades 1 defining the poverty line as the level of income that permits an intake of 2 250 calories per day the incidence of poverty was 39 in the late nineteenfifties two decades later the latest available estimates for 1977 78 show that 39 of the population is still below the poverty line 2 because the increase in agricultural production is concentrated in areas with irrigation or assured rainfall much of the poverty is located in the unirrigated semi arid regions of irregular rainfall and it remains an important social issue the apparent failure of economic growth per se to decrease the incidence of poverty among other reasons led policymakers in india as elsewhere to formulate in the mid seventies specific antipoverty programs that focused on creating employment and production assets for the poor the search for solutions to the problem of rural poverty requires both a better understanding of its dynamics and of the effectiveness and limitations of these and other programs this article a case study of a village is a step in this direction it presents simulations of the impact of weather induced fluctuations in production and of the process of investment and accumulation in the village which reveal the most vulnerable groups in need of compensatory programs it also shows the important welfare effects that investment programs can have on the village economy any study of rural poverty in india must contend with the fact that it is not a homogeneous phenomenon in addition to the geographical variation in its incidence and causes rural poverty is also socially highly differentiated even in a small geographical region such as a village systematic differences arise between groups of poor house

capital market integration and fiscal sustainability abstract by constructing a two country endogenous growth model with a debt financing government this paper studies the relationship between the sustainability of public finance and increases in inter regional factor mobility to this end it identifies the minimum tax rate that ensures fiscal sustainability against the backdrop of capital tax competition and studies whether competition for mobile capital lowers or improves fiscal sustainability the main findings are as follows i when countries are symmetric increasing capital flows promotes economic growth through the expansion of romer type knowledge spillovers resulting in increased fiscal sustainability in all countries and ii when a marked difference exists between countries tax competition caused by capital movements might lower fiscal sustainability in a country with abundant capital and large outstanding debt

village wide effects of agricultural biotechnology the case of bt cotton in india previous studies on impacts of agricultural biotechnology have mostly focused on direct effects we suggest an economy wide framework to analyze income distribution aspects more carefully for a village in india a micro social accounting matrix sam is developed and used to simulate the effects of bt cotton adoption overall the technology is employment generating although family labor in cotton production is saved while substantial benefits are observed for small and large farmers total household income effects are bigger for larger farms this is mostly due to differential opportunity incomes of saved family labor some research and policy implications are discussed

impact of tissue culture banana technology on farm household income and food security in kenya while tissue culture tc technology for vegetative plant propagation is gradually gaining in importance in africa rigorous assessment of broader welfare effects for adopting smallholder farm households is lacking using survey data and accounting for selection bias in technology adoption we analyze the impact of tc banana technology on household income and food security in kenya to assess food security outcomes we employ the household food insecurity access scale hfias a tool that has not been used for impact assessment before estimates of treatment effects models show that tc banana adoption combined with improved crop management causes considerable increases in farm and household income technology adoption also reduces relative food insecurity in a significant way these results indicate that tc technology can be welfare enhancing for adopting farm households adoption should be further promoted through upscaling appropriate technology delivery systems

are rational explosive solutions learnable abstract it is commonly believed that rational explosive solutions are unstable or fragile under adaptive learning contrary to this belief the paper shows that under realistic parameterizations rational explosive solutions are both e stable and strongly e stable in a class of models with lagged endogenous variables it also establishes the convergence of least squares learning process to explosive solutions taking a simple cagan model of inflation as an application the paper shows that money supply feedback rule gives rise to a rational explosive solution for prices which is learnable in real time this provides a new potential explanation for historical high inflation finally e stability results for non msv explosive solutions are provided

impact of bt cotton in china abstract a sample of 283 cotton farmers in northern china was surveyed in december 1999 farmers that used cotton engineered to produce the bacillus thuringiensis bt toxin substantially reduced the use of pesticide without reducing the output ha or quality of cotton this resulted in substantial economic benefits for small farmers consumers did not benefit directly farmers obtained the major share of benefits and because of weak intellectual property rights very little went back to government research institutes or foreign firms that developed these varieties farmers using bt cotton reported fewer pesticide poisonings than those using conventional cotton

unobserved tax avoidance and the tax elasticity of fdi abstract this paper investigates the tax responsiveness of multinational firms investment decisions in foreign countries distinguishing firms that are able to avoid taxes avoiders from those that are not non avoiders from a theoretical point of view the tax responsiveness of firms crucially depends on this distinction empirically however a firm s ability to avoid profit taxes is inherently unobservable to the researcher to address this problem we use a finite mixture modeling approach which allows us to distinguish avoiders from non avoiders stochastically from a mixture of distributions of the two types of firms using panel data on the universe of foreign affiliates of german multinational firms over the years 1999 2010 we find that investments of tax avoiders do not respond to host country profit taxes at all while those of non avoiders do about 11 of the affiliates are estimated to be able to avoid taxes these investments account for about 58 of the stock of foreign fixed assets held by german multinational firms abroad a one percentage point increase in the statutory corporate profit tax rate of a host country is found to reduce the fixed assets of non avoiders in that host country by 0 81

bt cotton in india field trial results and economic projections abstract the performance of bt cotton in india is analyzed on the basis of field trial data from 2001 the amounts of pesticides applied during the trials were reduced to one third of what was used in conventional cotton while under severe pest pressure yield gains were 80 productivity effects are modeled econometrically with a damage control specification the first approval for the commercial cultivation of bt hybrids was given in 2002 by 2005 the technology is expected to cover one quarter of total indian cotton area medium term projections show sizeable welfare gains for the overall economy with farmers being the main beneficiaries

greenfield versus merger acquisition fdi same wine different bottles relying on a large foreign direct investment fdi transaction level dataset unique both in terms of disaggregation and time and country coverage this paper examines patterns in greenfield gf versus merger acquisition ma investment although both are found to seek out large markets with low international barriers important differences emerge ma is more affected by geographic and cultural barriers and exhibits opportunistic behaviours as it is more sensitive to short run changes such as a currency crisis on the other hand gf is relatively driven by long run factors such as origincountry technological and institutional development or comparative advantage these empirical facts are consistent with the conceptual distinction made between these two modes i e ma involves transfer of ownership for integration or arbitrage reasons while gf relies on firms own capacities which are linked to the origin countries attributes they also suggest that gf and ma are likely to respond differently to policies intended to attract fdi

macro determinants of fdi inflows to japan an analysis of source country characteristics this paper examines the source country determinants of fdi into japan the paper highlights certain methodological and theoretical weaknesses in the previous literature and offers some explanations for hitherto ambiguous results specifically the paper highlights the importance of panel data analysis and the identification of fixed effects in the analysis rather than simply pooling the data indeed we argue that many of the results reported elsewhere are a feature of this mis specification to this end pooled fixed effects and random effects estimates are compared the results suggest that fdi into japan is inversely related to trade flows such that trade and fdi are substitutes moreover the results also suggest that fdi increases with home country political and economic stability the paper also shows that previously reported results regarding the importance of exchange rates relative borrowing costs and labour costs in explaining fdi flows are sensitive to the econometric specification and estimation approach the paper also discusses the importance of these results within a policy context in recent years japan has sought to attract fdi though many firms still complain of barriers to inward investment penetration in japan the results show that cultural and geographic distance are only of marginal importance in explaining fdi and that the results are consistent with the market seeking explanation of fdi as such the attitude to risk in the source country is strongly related to the size of fdi flows to japan 2007 the authors journal compilation 2007 blackwell publishing ltd

altered states taxes and the location of foreign direct investment in america this paper compares the distribution between u s states of investment from countries that grant foreign tax credits with investment from all other countries the ability to apply foreign tax credits against home country tax liabilities reduces an investor s incentive to avoid high tax foreign locations state corporate tax rate differences of 1 percent are associated with differences of 9 11 percent between the investment shares of foreign tax credit investors and the investment shares of all others suggesting that state taxes significantly influence the pattern of foreign direct investment in the united states copyright 1996 by american economic association

supplying crop biotechnology to the poor opportunities and constraints abstract unlike the public sector research that launched the green revolution private firms based in industrialised countries have done the majority of agricultural biotechnology research and almost all commercialisation of genetically modified gm crops this paper examines consequences of the emergence of a few large companies as leaders in the commercialisation of biotechnology by addressing issues of access to technology costs of conducting research and distribution of economic benefits to provide context we first review the status of crop biotechnology research globally who is benefiting from the technology we then analyse the role of intellectual property rights market access and industry concentration public sector research and gm crop biosafety regulations in determining observed r d by firms the paper recommends policy measures that allow transfer of current technology to the poor and generate more biotechnology research focused on problems of the poor

plant breeding and poverty can transgenic seeds replicate the green revolution as a source of gains for the poor 1 abstract improved farm technology helps all main groups of the poor small farmers farmworkers other low wage labour when it raises labour value productivity but raises land and or water value productivity faster and cuts staples prices but raises smallholders total factor productivity faster from 1965 the green revolution walked these two tightropes largely by luck though targeting bigger piles of rice and wheat it cut poverty through consumption nutrition smallholder income employment risk reduction and ecological sustainability yet large areas were left out and from 1985 progress slowed in the new environment for research and agriculture how can transgenics revive and spread poverty reduction what has been the evidence so far what determines whether new varieties have traits conducive to poverty reduction who owns the research or what crop science is

valuing financial health and environmental benefits of bt cotton in pakistan data from a farm survey and choice experiment are used to value the benefits of bt cotton in pakistan unlike previous research on the economic impacts of bt which mostly concentrated on financial benefits in terms of gross margins we also quantify and monetize positive externalities associated with technology adoption due to lower chemical pesticide use on bt cotton plots there are significant health advantages in terms of reduced incidence of acute pesticide poisoning and environmental advantages in terms of higher biodiversity and lower soil and groundwater contamination these positive externalities are valued at us 79 per acre of which half is attributable to health and the other half to environmental improvements adding average gross margin gains of us 204 results in an aggregate benefit of us 283 per acre of bt or us 1 7 billion for the total bt cotton area in pakistan

who bears the burden of international taxation evidence from cross border m as cross border m as can trigger additional taxation of the target s income in the form of non resident dividend withholding taxes and acquirer country corporate income taxation this paper finds that this additional international taxation is fully capitalized into lower takeover premiums in contrast acquirer excess stock market returns around the bid announcement date do not appear to reflect additional taxation of the target s income these findings suggest that international taxation is considered to be burdensome and that the incidence of this taxation is primarily on target firm shareholders

the location of financial sector fdi tax and regulation policy abstract this paper analyzes how corporate taxation and regulatory requirements affect the location of financial sector fdi we use novel information on new financial services entities established by multinational firms in 83 host countries we find a negative effect of host country taxes on the probability of choosing a particular host location we can also confirm a significant influence of the regulatory environment for example stricter equity capital requirements negatively affect location probabilities our empirical approach allows us to provide new insight in how a policy measure of a given country affects other countries by estimating cross country tax and regulation elasticities

the spread of illegal transgenic cotton varieties in india biosafety regulation monopoly and enforcement summary plantings of unapproved genetically modified seeds gm happen in many developing countries including brazil china and india even though the law does not permit it is regulation impossible and what does that imply for safe use of gm seeds this paper examines these questions in the case of unapproved gm cotton plantings in gujarat india we find that enforcement was possible and that there are no obvious bio safety implications the popularity of unapproved seeds confirmed by contingent valuations the de facto intellectual property of legal seeds and the federal polity of india contributed to non compliance this could matter for future innovations

repatriation taxes and outbound m as repatriation taxes reduce the competitiveness of multinational firms from tax credit countries when bidding for targets in low tax countries this comparative disadvantage with respect to bidders from exemption countries violates ownership neutrality which results in production inefficiencies due to second best ownership structures this paper empirically estimates the magnitude of these effects the abolishment of repatriation taxes in japan and in the u k in 2009 has increased the number of acquisitions abroad by japanese and british firms by 16 1 and 1 6 respectively a similar policy switch in the u s is simulated to increase the number of u s cross border acquisition by 11 0 the yearly gain in efficiency is estimated to be 108 9 million dollar due to the japanese reform and 3 9 million dollar due to the u k reform simulating such a reform for the u s results in a yearly efficiency gain of 537 0 million dollar

cotton subsidies the wto and the cotton problem following an 8 year long dispute over cotton subsidies brazil and the united states signed a memorandum of understanding on april 21 2010 effectively paving the way for settling the dispute this paper argues that cotton subsidies are just the tip of the iceberg while a number of other perhaps more important issues require attention and indeed political will chief among them is the persistent divergence between cotton prices and the prices of other agricultural commodities which reflects for the most part the large supply response by china and india a direct consequence of con version to biotech cotton varieties in these and other countries such response which kept cotton prices low compared with other commodities imposes a competitive disadvantage to non users of biotech cotton the paper also highlights two additional constraints faced by the cotton producing countries of west and central africa namely the structural inefficiencies of their primary processing industries also known as ginning and the appreciation of the cfa franc against the us dollar without downplaying the importance of subsidy elimination the paper concludes that these impediments should receive high priority in the policy agenda

recent and prospective adoption of genetically modified cotton a global computable general equilibrium analysis of economic impacts abstract this article provides estimates of the economic impact of initial adoption of genetically modified gm cotton and of its potential impacts beyond the few countries where it is currently common use is made of the latest version of the gtap database and model our results suggest that if other developing countries especially in sub saharan africa were to follow the lead of china south africa and most recently india adoption of gm cotton varieties could provide even larger proportionate gains to farmer and national welfare than in those early adopting countries furthermore those estimated gains are shown to exceed and reinforce those from a successful campaign under the wto s doha development agenda to reduce remove cotton subsidies and import tariffs globally

long run growth uncertainty observed macroeconomic forecasts display a positive correlation between expectations of long run growth of endogenous variables e g output and cyclical activity existing business cycle models appear inconsistent with the evidence this paper presents a model of the business cycle in which households have imperfect knowledge of long run growth rate of endogenous variables and continually learn about these growth rates the model features comovement and mutual influence between households growth expectations and market outcomes it can replicate the evidence on growth forecasts and suggests that optimism and pessimism about long run growth rates is a crucial ingredient in understanding business cycle fluctuations

expectational stability and the multiple equilibria problem in linear rational expectations models linear models involving expectations of future endogenous variables generally have multiple rational expectations equilibria this paper investigates the stability of solutions in the disequilibrium sense of whether given a small deviation of expectations functions from some rational expectations equilibrium the system returns to that solution under a natural revision rule weak and strong local stability are distinguished stability conditions are calculated for a simple general linear model and applied to two macroeconomic examples in some cases there is a unique stable equilibrium in other cases a continuum of equilibria forms a weakly but not strongly stable class

impact of rural industrialization on village life and economy a social accounting matrix approach the effects of decentralization of industries on rural development is one of the neglected topics in the recent development literature of india the impact of industrialization was studied intensively in the early 1970s when the second and third five year plans were emphasizing creation of large industrial units especially basic industries it was observed that such industrialization did not have much effect on rural development industrialization was taking place in a few pockets having little impact on the surrounding areas the industrial scene in the 1990s is quite different instead of basic industries chemical engineering and consumer goods industries dominate the scene industries are being established outside the megalopolies many small industrial towns have come into existence and the process of rural industrial decentralization appears under way so far there has been little analysis of how such decentralization of industries is affecting rural growth and development some indications of the impact do exist in the literature but they do not take into account important factors such as the development of the service sector around the factory and the changes in the village employment structure and in the socioeconomic fabric of village life 2 in this study we attempt to revive the debate on the impact of decentralization of industries on rural development we compare two relatively similar indian villages one close to a factory boriya and another located in a remote area aurepalle to provide insights on the socioeconomic effects of industrial decentralization field surveys of socioeconomic characteristics of households were conducted in both villages to understand better how people s outlook the employ

estimating the impact of transgenic bt cotton on west and central africa a general equilibrium approach summary west and central africa wca s cotton sector is experiencing rising production costs and lower yields reversing decades of growth declining input use soil fertility and inefficient chemical pest controls are contributing factors we evaluate the potential impact of bt cotton on wca using a multiregion general equilibrium model and multicountry estimates of bt induced productivity we find that bt cotton raises growers returns land value and welfare released labor from cotton is shifted to food crops hence reducing labor shortage constraints overall results indicate that potential gross benefits from bt cotton are substantial for wca cotton sector and that the economic costs of nonadoption are equally significant published by elsevier ltd

impact of bt cotton on pesticide poisoning in smallholder agriculture a panel data analysis while substantial research on the productivity and profit effects of bt cotton has been carried out recently the economic evaluation of positive and negative externalities has received much less attention here we focus on farmer health impacts resulting from bt related changes in chemical pesticide use previous studies have documented that bt cotton has reduced the problem of pesticide poisoning in developing countries but they have failed to account for unobserved heterogeneity between technology adopters and non adopters we use unique panel survey data from india to estimate unbiased effects and their developments over time bt cotton has reduced pesticide applications by 50 with the largest reductions of 70 occurring in the most toxic types of chemicals results of fixed effects poisson models confirm that bt has notably reduced the incidence of acute pesticide poisoning among cotton growers these effects have become more pronounced with increasing technology adoption rates bt cotton now helps to avoid several million cases of pesticide poisoning in india every year which also entails sizeable health cost savings