competitive storage rational expectations and short run food price determination this paper demonstrates that lags between retail and wholesale food prices can be explained by inventory behavior of retailers theoretical considerations indicate that the markup model should be modified to include a jorgenson type user cost variable which depends on expected future wholesale price the rational expectations hypothesis is used to derive price expectations the retail price specification therefore depends on the stochastic process generating expected wholesale price the econometric methodology employing both causality testing and nonlinear estimation is illustrated by estimating monthly price relationships for beef the results are consistent with the theory and indicate rejection of the markup model

nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

asymmetric price adjustment and economic fluctuations this paper considers a possible explanation for asymmetric adjustment of nominal prices the authors present a menu cost model in which positive trend inflation causes firms relative prices to decline automatically between price adjustments in this environment shocks that raise firms desired prices trigger larger price responses than shocks that lower desired prices the authors use this model of asymmetric adjustment to address three issues in macroeconomics the effects of aggregate demand the effects of sectoral shocks and the optimal rate of inflation copyright 1994 by royal economic society

integration of spatial markets studies of spatial market integration draw their implications from a theory which assumes that there are no intraregional transport costs an alternative theory is offered based on the assumptions that buyers and sellers are spatially dispersed and intraregional transport costs are significant this implies that the market is a linked oligopoly or oligopsony and that market integration tests are tests of alternative oligopoly price formation processes for example collusive basing point pricing produces results typically assumed to imply efficiently integrated markets while competitive fob pricing does not the theoretical implications are illustrated with an analysis of hog prices in canada

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

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

growth and poverty reduction in ethiopia evidence from household panel surveys abstract the paper investigates the impact of growth on poverty in ethiopia by analysing panel data covering 1994 97 a period of economic recovery driven by peace good weather and much improved macroeconomic management the analysis of poverty shows land ownership education type of crops planted occupations in urban areas dependency ratios and location to be important determinants the characteristics of households that fell into or escaped from poverty are examined in addition the profile of those that remained poor during the period the chronic poor is looked at in rural areas the cultivation of a nontraditional export crop chat has significantly improved the welfare of households primary education plays a more important role in improving welfare in urban than in rural areas decomposition of changes in poverty into growth and redistribution components indicates that potential poverty reduction due to the increase in real per capita income was to some extent counteracted by worsening income distribution the implications of the results for a propoor policy are discussed

oligopsony power a forgotten dimension of food marketing discussion the three papers offer engaging discussions of oligopsony power at the first handler level in agricultural markets the papers fill an important gap in the literature and thus are important reading for those interested in market power issues in markets for raw agricultural commodities in addition to making the case for increased attention to the potential for oligopsony power at the first handler level each of the papers makes important methodological contributions in offering analytical and empirical approaches for evaluating this oligopsony power although linked by a common theme the three papers differ significantly in their approaches to the market power issue as rogers and sexton note statistics on concentration at least on the sellers side of the market suggest that farm related industries are highly concentrated and that this concentration has increased significantly in recent years for example the four firm concentration ratio cr4 in the steer and heifer slaughter industry has gone from 30 in 1978 to 70 in 1988 purcell 1990a likewise the cr4 for the flour milling industry has gone from 37 in 1980 to over 65 in 1991 brester and goodwin the period 1977 87 was one of four great u s merger movements approximately 400 billion was spend on industrial mergers during this period with food and tobacco firms being the major players connor and geithman these mergers were fueled in part by relaxed restrictions on mergers by federal antitrust agencies after 1980 these statistics lead one to suspect the existence of market power influences in farm related industries however a high degree of concentration in an industry does not confirm the existence of discriminatory market power practices after many years of debate among industrial organization economists the relationship between industry concentration and the exercise of market power remains inconclusive the papers at l ast implicitly take as given the premise that industry concentration implies the existence of collusive market power practices an alternative view presented by demsetz holds that scale economies or other competitive advantages lead to increased concentration in many industries without implying the existence of welfare diminishing market power pricing practices in such cases increased concentration may result in more efficient use of resources of course this alternative view often assumes that entry and exit in an industry are relatively easy and thus that firms in highly concentrated industries are disciplined by the threat of competition evidence of scale economies in the food processing sector has been offered in recent research for example ward found that significant economies of size existed in the

a nonlinear approach to us gnp a univariate nonlinear model is estimated for us gnp that on many criteria outperforms standard linear models the estimated model is of the threshold autoregressive type and contains evidence of asymmetric effects of shocks over the business cycle in particular the nonlinear model suggests that the post 1945 us economy is significantly more stable than the pre 1945 us economy

price transmission in the international skim milk powder markets abstractthis article investigates the strength and the pattern of spatial price linkages in skimmed milk powder markets using monthly wholesale price data from three major producers and exporters the u s a the e u and oceania and the nonlinear autoregressive distributed lag model the results suggest that prices in the three regions considered are linked with stable long run relationships the law of one price however does not hold the dominant pattern of transmission in the long run is asymmetric involving positive price stocks to be transmitted with higher intensity compared to negative prices shocks asymmetries in price transmission exist in the short run as well

cointegration and market efficiency abstract recently many economists have asserted that asset prices determined in efficient asset markets cannot be cointegrated we show that there is no general equivalence between the existence of arbitrage opportunities and cointegration or for that matter a lack of cointegration whether asset prices are cointegrated is a function of the relevant model we first show a convenient way to calculate the cointegrating vector based on necessary and sufficient conditions for cointegration we then examine particular cases including exchange rates interest rates and spot and forward exchange rates and asset prices with incoem flows reinvested and not reinvested jel f31

the impact of demand and price expectations on the behavior of prices the effects of demand and price expectations on price behavior are analyzed using data from the manufacturing sector and a model formulated to pinpoint the demand oriented factors affecting prices and to incorporate price expectations as a direct influence on price behavior the expected normal demand is seen to have a strong and systemic influence on price behavior the expected normal level of new orders is found to be an adequate measure with sector data in general although some industries require more specification the effects of inventories and unfilled orders on prices are sporadic and across sectors and industries demand oriented forces are concluded to perform as well statistically as cost push determinants expectations concerning the current normal industry price level have a significant and consistent impact on price behavior this supports the idea that firms setting prices take into account their estimates of competitor s prices future price expectations appear to have little effect on current price information 15 references

what determines patent value insights from the semiconductor industry abstract this paper contributes to an understanding which impacts certain patent characteristics have on the value of patent rights in an exploratory study 127 individual patents from a semiconductor company were evaluated comprehensively by technical and marketing representatives the analysis of this rare data shows that for patents used as bargaining chips novelty and inventive activity are most important difficulty of inventing around and disclosure turn out to be of limited importance due to a selection bias the influence of patent age on its value cannot be determined the results hint at a differentiated theoretical plausibility of value indicators

cash crop production food price volatility and rural market integration in the third world large farmers in the third world often devote to cash crops a larger share of their land than do small farmers this paper suggests a possible explanation even in the presence of food markets third world farmers food security is best assured by food self sufficiency a model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern simulations further indicate that food market integration reduces the need for food self sufficiency policy implications are drawn regarding domestic trade liberalization and agricultural technology

spatial integration transport costs and the response of local prices to policy changes in ghana abstract this paper investigates the respective roles of spatial integration and transport costs in explaining price changes in ghana we introduce a model of price formation and market integration that incorporates the price transmission process between local and central markets and also captures the implications for volatility of local prices we explore the implications of the model for the time path of price adjustments as determined directly and indirectly through the marketing sector we show that the price adjustment process in a local market is determined by the degree of interdependence between that market and the central market in which a price shock originates and estimate the intertemporal and interspatial dynamics of the price adjustment process using data from wholesale maize markets in ghana we find that reductions in local prices and local price variance following the introduction of economic reforms in 1983 can be traced to both local and central market forces but that differences in the degree of market integration have important implications for long run changes in transport costs and the evolution of prices in outlying markets

cointegration and market integration an application to the indonesian rice market this article suggests improvements in the use of regression analysis to measure spatial market integration the procedure pioneered by ravallion is still widespread but is valid only under certain conditions of exogeneity the alternative offered here is an error correction mechanism which makes it possible to test for exogeneity as well as indicating the direction and strength of causality in price formation between markets the method is illustrated with data on rice prices in different parts of the indonesian market the results confirm among other things that supply sources are more important than demand sources in driving prices

heteroscedastic hedonic price model for cattle in the rural markets of central ethiopia this study employs a heteroscedastic hedonic price model to examine the factors that influence cattle prices in the rural markets of central ethiopia the empirical results show that season market location class of cattle body size and age are very important determinants of the cattle price the relative weight of the phenotypic characteristics of the animals is among the highest of all the factors considered these preferences at the farmers and farmer traders levels are the ones that matter most in shaping the diversity of animals kept at farm level and the diversity of cattle genetic resources is quite essential for generating or identifying the best suited breeds of cattle given the livelihood objectives of the target community

food price variability and economic reform an arch approach for ghana changes in maize price levels and variability in ghana are investigated a model of wholesale price determination is reviewed in which grain stocks are held for speculative storage as well as export to neighboring countries in the sahel to test the model an autoregressive conditionally heteroskedastic arch regression is applied to monthly maize data for two markets over the period 1978 93 the regression is used to measure changes in maize price volatility in ghana and to infer the importance of past prices domestic and regional production and commodity storage and trade in explaining these changes

the transmission of world maize price to south african maize market a threshold cointegration approach this article seeks to provide an explanation for the relationship between domestic maize price in south africa and world maize prices in order to evaluate comovement and transmission of world prices to domestic prices in sub sahara african countries this is done by comparing nested and nonnested models that capture different forms of nonlinearity in the price spread adopting a bayesian approach that allows for comparison of models using bayes factor we found that the relationship between south african price and world price for maize indicates the presence of nonlinearity in price transmission with three regimes that is triggered by the price spread in previous period

financial development and poverty reduction can there be a benefit without a cost abstract this article investigates how financial development helps to reduce poverty directly through a distributional effect beyond its indirect effect through economic growth the results obtained with data for a sample of developing countries from 1966 through 2000 suggest that the poor benefit from the ability of the banking system to facilitate transactions and provide savings opportunities through the mckinnon conduit effect but to some extent fail to reap the benefit from greater availability of credit moreover financial development is accompanied by financial instability which is particularly detrimental to the poor nevertheless the benefits of financial development for the poor outweigh the cost

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

net national product as an indicator of sustainability net national product nnp can potentially serve several objectives among others to measure value added and to be an indicator of welfare in the aftermath of the world commission on environment and development however it also seems important to investigate whether the concept of nnp can serve as an indicator of sustainability my point of departure following hicks 1946 ch 14 is therefore to require that nnp should measure what can be consumed in the present period without reducing future consumption possibilities and in line with this to argue that the nnp should equal the maximum per capita consumption level that can be sustained if sufficiently many facilitating assumptions are made then a concept of nnp that serves as an exact indicator of sustainability can easily be constructed for instance for a closed economy with a constant population a stationary technology and with only one capital good it follows that the present does not reduce future consumption possibilities if and only if it does not decrease the stock of the single capital good hence under the assumption that the one capital good k is identical to the one consumption good x nnp defined as y x k measures the maximal sustainable consumption at time t because then x y is equivalent to k the purpose of this note is to establish that with multiple capital goods it is not in general possible to construct an exact indicator of sustainability on the

economic reform and food prices evidence from markets in ghana abstract this paper investigates trends in food prices in ghana during 1970 1993 regression results confirm that real wholesale prices of food have been declining since the 1970s price trends in the 1980s are characterized by a downward shift at the beginning of the postreform period and a subsequent continuing downward trend despite falling grain prices we find that agricultural wage rates failed to provide an adequate basis for subsistence particularly during periods of large seasonal price rises many farmers hold grain for both speculation and to smooth income this view is supported by evidence regarding seasonal price spreads that have been increasing since 1984 we find no support however for conclusions of trader manipulation of marketing margins during the adjustment period

improving patent valuations for management purposes validating new indicators by analyzing application rationales abstract this paper analyzes the validity of so far untested indicators of patent value to enhance the quality of patent assessments using indicators at the corporate level the article expands the theory by eliciting patent attorneys filing rationales to maximize profits from protecting intellectual property to inspire the computation of new value indicators including patent full texts then based on a newly compiled data set consisting of 813 ep patents the probability of an opposition against a patent is modeled by established and new value indicators the results show that accelerated examination requests and qualified word counts enhance the quality of existing valuation methods

efficiency of conservationist measures an optimist viewpoint abstract we consider an economy with a consumer good capital a natural resource that provides amenity values and heterogeneous overlapping generations we compare a benchmark grandfathering policy that ensures efficiency through privatization with a policy of enforced resource conservation it is shown that i conservationist measures do not cause any pareto inefficiency irrespective of whether they pass a cost benefit test moreover it is shown that ii there exist pareto optimal allocations that can only be reached through resource conservation and not through competitive markets irrespective of compensating income transfers finally iii equivalence is demonstrated between strict resource conservation and non dictatorship of the present generations over future generations as formalized in chichilnisky s sustainable welfare function the results are shown to hold in both a first best and a second best setting

growth inequality and poverty looking beyond averages the evidence is compelling that the poor in developing countries do typically share in the gains from rising aggregate affluence and in the losses from aggregate contraction but how much do poor people share in growth do they gain more in some settings than others do some gain while others lose does pro poor growth mean more or less aggregate growth recent theories and evidence suggest some answers but deeper microeconomic empirical work is needed on growth and distributed change only then will we have a firm basis for identifying the specific policies and programs needed to complement and possibly modify growth oriented policies

the structure of indigenous food crop markets in sub saharan africa the rice market in uganda abstractusing data obtained from a series of nation wide market surveys in uganda this article attempts to document and assess the domestic rice market at all stages in the post harvest marketing chain from the farm gate to metropolitan area retail outlets the criteria used are quantities marketed prices marketing margins marketing costs and net returns to traders the results show that the regional rice markets are integrated into the national market and that on average little surplus is left for rice traders at all market stages if marketing costs are accounted for the spontaneously developed indigenous crop market works reasonably well

the extent of the market examines the classical theory of the market in this paper authors consider the role of price market determination price movement in competitive and monopolistic markets extension of commodity markets

cointegration and spatial price transmission among wheat and wheat flour markets in afghanistan abstractthis article examines cointegration and spatial price transmission among afghan wheat and flour markets as well as their linkages with those of supplier countries and global markets unit root tests consistent momentum threshold autoregressive m tar models and vector error correction models asymmetric and symmetric are employed to achieve research objectives the results suggest that provincial wheat and flour markets may have a long run relationship with principal market of kabul afghan wheat and flour markets may also be cointegrated with their respective global kazakh and pakistani markets while provincial wheat markets might adjust to divergence from their long run equilibrium with kabul wheat market some of the provincial flour markets may not respond to deviation from their long run equilibrium with kabul flour market the speed of adjustment towards the long run afghan pakistani and afghan kazakh equilibrium may be faster for afghan flour than wheat markets the equilibrium adjustm

spatial price transmission and asymmetry in the ghanaian maize market abstract this paper utilizes recently developed threshold cointegration tests that allow for asymmetric adjustment toward a long run equilibrium relationship to examine price linkages between principal maize markets in ghana unlike previous studies the approach employed here assumes that economic agents only act to move the system back to equilibrium when the deviation from equilibrium exceeds a critical threshold whereby the benefits of this adjustment exceed the costs the findings indicate that major maize markets in ghana are well integrated both the threshold cointegration and asymmetric error correction models reveal that wholesale maize prices in local markets accra and bolgatanga respond more swiftly to increases than to decreases in central market techiman prices accra prices are found to react faster than bolgatanga prices to changes in techiman market prices

spatial integration at multiple scales rice markets in madagascar the dramatic increase in the price of rice and other commodities over the past year has generated new interest in how these markets work and how they can be improved this article uses an exceptionally rich data set to test the extent to which markets in madagascar are integrated across space at different scales of analysis and to explain some of the factors that limit spatial arbitrage and price equalization within a single country we use rice price data across four quarters of 2000 2001 along with data on transportation costs and infrastructure availability for nearly 1 400 communes in madagascar to examine the extent of market integration at three different spatial scales subregional regional and national and to determine whether non integration is due to high transfer costs or lack of competition the results indicate that markets are fairly well integrated at the subregional level and that factors such as high crime rates remoteness and lack of information are among the factors limiting competition

econometric models of asymmetric price transmission abstract in this paper we review the existing empirical literature on price asymmetries in commodities providing a way to classify and compare different studies that are highly heterogeneous in terms of econometric models type of asymmetries and empirical findings relative to the previous literature this paper is novel in several respects first it presents a detailed and updated survey of the existing empirical contributions on price asymmetries in the transmission mechanism linking input prices to output prices second this paper presents an extension of the traditional distinction between long run and short run asymmetries to new categories of asymmetries such as contemporaneous impact distributed lag effect cumulated impact reaction time equilibrium and momentum equilibrium adjustment path regime effect regime equilibrium adjustment path each empirical study is then critically discussed in the light of this new classification of asymmetries third this paper evaluates the relative merits of the most popular econometric models for price asymmetries namely autoregressive distributed lags partial adjustments error correction models regime switching and vector autoregressive models finally we use the meta regression analysis to investigate whether the results of asymmetry tests are not model invariant and find which additional factors systematically influence the rejection of the null hypothesis of symmetric price adjustment the main results of our survey can be summarized as follows i each econometric model is specialized to capture a subset of asymmetries ii each asymmetry is better investigated by a subset of econometric models iii the general significance of the f test for asymmetric price transmission depends mainly on characteristics of the data dynamic specification of the econometric model and market characteristics overall our empirical findings confirm that asymmetry in all its forms is very likely to occur in a wide range of markets and econometric models

macro and micro perspectives of growth and poverty in africa this article reviews trends in poverty economic policies and growth in a sample of african countries during the 1990s drawing on the better household data now available experiences have varied some countries have seen sharp drops in income poverty whereas others have witnessed marked increases in some countries overall economic growth has been pro poor and in others not but the aggregate numbers hide systematic distributional effects taking both macro and micro perspectives of growth and poverty in africa the article draws four key conclusions first economic policy reforms improving macroeconomic balances and liberalizing markets appear conducive to reducing poverty second market connectedness is crucial to enable participation in the gains from economic growth some regions and households by virtue of their remoteness were left behind when growth picked up third education and access to land emerge as key private endowments to help households benefit from new economic opportunities finally rainfall variations and ill health have profound effects on poverty outcomes underscoring the significance of social risk management in poverty reduction strategies in africa

in search of complementarity in innovation strategy internal r d and external knowledge acquisition empirical research on complementarity between organizational design decisions has traditionally focused on the question of existence of complementarity in this paper we take a broader approach to the issue combining a productivity and an adoption approach while including a search for contextual variables in the firms strategy that affects complementarity analysis of contextual variables is not only interesting per se but also improves the productivity test for the existence of complementarity we use our empirical methodology to analyze complementarity between innovation activities internal research and development r d and external knowledge acquisition our results suggest that internal r d and external knowledge acquisition are complementary innovation activities but that the degree of complementarity is sensitive to other elements of the firms strategic environment we identify reliance on basic r dthe importance of universities and research centers as an information source for the innovation processas an important contextual variable affecting complementarity between internal and external innovation activities

are we overestimating the negative impact of higher food prices evidence from ghana most studies of the welfare impact of higher food prices adopt deaton s approach based on the first order effect of prices changes using income and expenditure survey data this paper explores the impact of higher maize and food prices in ghana and considers the sensitivity of results to changes in several assumptions if second order effects are included incorporating household response to price changes the welfare impact of food price increases is more positive but only modestly so however if we assume that marketing margins are constant in real terms rather than proportional to prices the welfare impact is substantially more positive these findings highlight the need for more research on the behavior of marketing margins under volatile prices

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

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

the political economy of growth a critical survey of the recent literature this article reviews the recent literature on the political economy of growth focusing on the research that has developed at the intersection of the endogenous growth literature and the new political economy it explores the relationship among four key variables economic growth and capital accumulation political instability political freedom and democratic institutions and income inequality

internal sequential innovations how does interrelatedness affect patent renewal abstract the value of patented innovations has attracted substantial research attention especially in the context of patent renewal however research often assumes that a firm s patented innovations are independent from each other we draw upon evolutionary economics and suggest that some of a firm s patents share important genealogical relationships which we refer to as internal sequential innovations we propose internal sequential innovations are more valuable and therefore more likely to be renewed than stand alone innovations we examine our hypotheses from a dataset of us pharmaceutical and biotechnology patents the results confirm our hypotheses at both the patent and the firm levels

roads out of poverty assessing the links between aid public investment growth and poverty reduction the authors develop a macroeconomic framework that captures links between aid public investment growth and poverty public investment is disaggregated into education infrastructure and health and affects both aggregate supply and demand dutch disease effects are captured by accounting for changes in the relative price of domestic goods the authors assess the impact of policy shocks on poverty by linking the model to a household survey they calibrate the model for ethiopia and simulate the changes in the allocation of aid and public investment the authors also calculate the amount by which foreign aid should increase to reach the poverty targets of the millennium development goals

evidence on the flexibility of prices we consider two competing theories that provide potentially important explanations of price rigidity the first theory argues that prices are sticky at the aggregate level because of the cumulative effects of relatively short adjustment lags at the firm level in contrast the second theory argues that aggregate prices are slow to adjust because individual prices are slow to adjust we estimate a structural model in which imperfectly competitive firms set prices in order to maximize profits subject to quadratic costs of price adjustment the results suggest that to the extent that aggregate price rigidity exists it can be explained by sluggishness of individual price adjustment however prices at both the aggregate and individual level are found to adjust rapidly to nominal cost innovations copyright 1994 by mit press

market integration and spatial price transmission in grain markets of turkey this paper examines whether the grain market of turkey is cointegrated with the world grain market using an error correction model we analyse the response of producer prices of wheat barley mai

capital gains and net national product in open economies it is shown within a given framework that with the world economy following an egalitarian path the aggregate capital gains being positive is equivalent to the interest rate tending to decrease this result is of importance for the concept of net national product in open economies in particular with positive aggregate capital gains an open economy cannot sustain consuming the return on its capital stocks since some part of the return must be used to augment the country s national wealth it is established that a country s share of world wide sustainable consumption equals its share of worldwide wealth

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

achieving the millennium development goals in sub saharan africa a macroeconomic monitoring framework this paper presents a macroeconomic approach to monitoring progress toward achieving the millennium development goals mdgs in sub saharan africa at the heart of our framework is a macro model which captures key linkages between foreign aid public investment disaggregated into education infrastructure and health the supply side and poverty the model is then linked through cross country regressions to indicators of malnutrition infant mortality life expectancy and access to safe water a composite mdg indicator is also calculated the functioning of our framework is illustrated by simulating the impact of an increase in foreign aid to niger at the mdg horizon of 2015 under alternative assumptions about the degree of efficiency of public investment our approach can serve as the building block for strategy papers for human development spahd a more encompassing concept than the current poverty reduction strategy papers

sources of food price volatility and child malnutrition in niger and malawi in recent times considerable attention has been paid to the nutritional impact of the sharp hikes in the international food prices which took place in 2007 8 and 2010 11 while understandable this growing focus has perhaps obscured the impact of other variables affecting malnutrition in sub saharan africa i e the long term impact of agricultural policies on food supply and prices large and persistent seasonal variations in food prices and the impact of famines which still affect parts of the continent this paper focuses on the relative impact of these factors on child malnutrition measured by the number of child admissions to feeding centres in malawi and niger two countries which closely represent the situation of other small landlocked subsistence agricultural economies facing severe food security problems our analysis shows that in these countries the drivers of changes in domestic staple prices and child malnutrition are related not only or not primarily to variations of international food prices but also to the impact of agricultural policies on food production and prices in a persistent food price seasonality and in recurrent and poorly managed famines these factors can exert a strong upward pressure on food prices and child malnutrition even during years of falling international prices

transfer costs spatial arbitrage and testing for food market integration conventional tests for food market integration ask often misleadingly whether prices in different locations move together in this paper an alternative methodology the parity bounds model pbm is developed which uses information on transfer costs in addition to food prices to assess the efficiency of spatial arbitrage monte carlo experiments using data generated by a point space spatial price equilibrium model show the pbm to be statistically reliable an application to philippine rice markets demonstrates that the pbm detects efficient arbitrage when other tests do not

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

inventories and sticky prices more on the microfoundations of macroeconomics the role of inventories in making prices sticky is studied by analyzing a dynamic linear quadratic model of a monopoly firm facing stochastic demand but able to store its finished goods in inventory it is shown that in contrast to the usual presumption firms that exhibit the smallest output responses to demand fluctuations may also exhibit the smallest price fluctuations specifically firms which have very flexible inventory storage facilities or are subjected to very transitory demand shocks will rely on inventories as buffers and will change neither production nor price very much on the other hand firms which have very inflexible storage facilities or whose demand shocks are quite permanent will display large swings in both price and output the standard assumption about inventory carrying costs that has been used in the literature that they are linear is shown to imply that production is impervious to fluctuations in demand it is also established that prices may respond more strongly to positive demand shocks than to negative ones if it is impossible to hold negative inventories i e to have unfilled orders the model offers an explanation for stickiness in relative prices however under certain circumstances it may help explain the persistence of inflation this abstract was borrowed from another version of this item

economic policy distribution and poverty the nature of disagreements abstract the last 20 years have seen growing areas of agreement on poverty reduction strategies but disagreements on economic policy distribution and poverty seem to have intensified this paper tries to identify the underlying nature of these disagreements related to differences in perspective and framework between finance ministry and civil society tendencies it is argued that the deep divisions one sees can be located in differences in the level of aggregation adopted the time horizon considered and assumptions made on market structure and power mutual understanding could be advanced by further exploration of these differences and the adoption by both sides of the approach of dialogue rather than negotiation

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

on market integration and liberalisation method and application to ethiopia the article suggests further improvements in the methodology to analyse market integration it provides corrections to and methodological extensions of recent work in this journal it also presents a way of applying market integration techniques to the analysis of shocks such as market liberalisation and war the method is applied to the effects of liberalisation and the end of the civil war on food markets in ethiopia the conclusion is that liberalisation had important effects on the long run and short run integration of food markets