the phillips curve macroeconomic policy and the welfare of canadians a review of the two competing paradigms explaining inflation and unemployment fluctuations singles out the keynesian phillips curve as the clear empirical winner over its classic competitors reestimation of the canadian phillips curve for 1957 90 identifies a sharp structural shift toward a high degree of unemployment hysteresis after 1972 the recent attempt of macropolicy to flatten the aggregate demand curve and limit supply side shock accommodation which aims at lower and more stable inflation is then shown to make unemployment higher and more unstable on average to an extent that is an increasing function of the degree of hysteresis understanding and reducing hysteresis and developing a consensus based incomes policy that has a chance of alleviating the dismal trade off should therefore to top research and policy priorities

supply side macro economics this paper tests new classical and keynesian explanations of output determination within an encompassing factor utilization model wherein the output decision by producers is modelled as the choice of a utilization rate for employed factors in this encompassing model the ratio of actual to normal output with the latter defined by a nested ces vintage production function with capital energy and employment as factor inputs is explained by unexpected sales a keynesian element abnormal profitability one component of which is the lucas price surprise effect and abnormal inventories results using canadian data show that the keynesian and new classical elements contribute explanatory power as does the production function based measure of normal output while each of these partial models is strongly rejected in favour of the encompassing model the highly structured factor utilization model is also seen to fit better than an unstructured var model u s data confirm the results and show that there are significant effects from abnormal demand profitability and inventory levels even if the labour and capital components of normal output are defined using hours and utilized capital rather than employment and the capital stock the results are also confirmed using alternative output and hence input concepts using a translog function instead of a ces function to define normal output and using data for several other major industrial countries this abstract was borrowed from another version of this item

non farm income household welfare and sustainable land management in a less favoured area in the ethiopian highlands a bio economic model has been calibrated to the socio economic and biophysical characteristics of a less favoured area in the ethiopian highlands land degradation population growth stagnant technology and drought necessitates development of non farm employment opportunities in the area the model has been used to assess the impact of improved access to non farm income on household welfare agricultural production conservation investments and land degradation in the form of soil erosion the model simulations indicate that access to low wage off farm income is restricted by lack of employment opportunities since households otherwise would have engaged in more off farm wage employment than observed the simulations show that better unconstrained access to low wage non farm income has a substantial positive effect on household income total agricultural production crop and livestock production and farm inputs used are reduced when access to non farm employment is improved and thus increases the need to import food to the area access to non farm income reduces farm households incentives to invest in conservation and this leads to more overall soil erosion and more rapid land degradation even though intensity of production is reduced special policies are therefore needed to ensure land conservation and to sustain local food production

why farmers sometimes love risks evidence from india abstractusing a unique data set collected among farmers in india s semiarid tropics we document the surprising prevalence of risk taking behavior in the face of realistically framed high stakes gambles we hypothesize that this apparently anomalous behavior is due to a combination of credit constraints and nonconvexities in production in particular the high stakes nature of the gambles creates the potential for a farmer to undertake a productive investment that would normally be unaffordable and thereby move to a permanently higher level of income we show that the degree to which farmers are willing to accept risk in return for this opportunity appears to relate in an intuitive way to their current agricultural production technology as well as the demographic composition of their household

price determinants of aboriginal art and its role as an alternative asset class abstract this paper analyzes auction results for over 4000 paintings by australian aboriginal artists to investigate determinants of prices in the aboriginal art market this is the first financial study of an indigenous art market and hedonic repeat sales and hybrid regression analyses find it shares price determinants with traditional art markets with price premia attached to artist name death painting size leading auction house and winter sale however aboriginal art s unique features significantly affect prices particularly works that use traditional aboriginal media and those with reputation affirming traits an aboriginal art index provides 6 6 annual return standard deviation 17 9 which is comparable to traditional asset classes and superior on a risk adjusted basis returns to aboriginal art are negatively correlated with returns from other assets and so it adds value to a diversified investment portfolio

nonfarm income diversification and household livelihood strategies in rural africa concepts dynamics and policy implications abstract asset activity and income diversification lie at the heart of livelihood strategies in rural africa this paper introduces a special issue on the topic income diversification and livelihoods in rural africa cause and consequence of change we concentrate on core conceptual issues that bedevil the literature on rural income diversification and the policy implications of the empirical evidence presented in this special issue

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

local political business cycles evidence from philippine municipalities abstract this paper establishes the existence of short term political business cycles in the philippines over the period 2003 2009 examining a balanced panel of 1143 municipalities shows that employment levels increase in the two pre electoral quarters and drop sharply in the two quarters following elections further results are consistent with the cycles being generated by incumbents attempts to increase their chances of re election cycles are stronger in sectors that incumbents are more able to influence and when they expect stronger electoral competition evidence suggests that these cycles are detrimental to development

links between the local trade in natural products livelihoods and poverty alleviation in a semi arid region of south africa can the local commercialization of natural products contribute to reduced poverty and vulnerability commentary on this issue is mixed with some observers being quite optimistic while others hold a counterview this paper explores the poverty alleviation potential of four products traded in bushbuckridge south africa traditional brooms reed mats woodcraft and marula beer while key in enhancing the livelihood security of the poorest households these products were unlikely to provide a route out of poverty for most although there were exceptions incomes often surpassed local wage rates and some producers obtained returns equivalent to the minimum wage non financial benefits such as the opportunity to work from home were highly rated and the trade was found to represent a range of livelihood strategies both within and across products

barriers to participation of the poor in south africa s land redistribution abstract land redistribution is being characterized as poverty alleviation for rural south africa this paper argues that the poor have less inclination to move the distances demanded by the redistribution have less labor available for farming are less able to afford the program s up front costs have fewer farming specific skills and have less capacity to cope with agricultural risk therefore the poor are likely to be rationed out of participation in the program and the land redistribution will have little effect on rural poverty unless demand led targeting is dropped and ancillary programs are employed to make land redistribution attractive for the poor

economic relationship between access to land and rural poverty in nepal in the present socio economic structure of nepal land is the main source of income and consumption for the majority of nepalese this study analyses the economic relationship between access to land and poverty in nepal by establishing the link between land and consumption as well as land and income a generalised additive model gam and ordinary least squares ols demonstrate that greater access to land increases income and consumption of the household and thereby reduces poverty the significant marginal value of land for both consumption and income implies that an effective land reform policy could well be an effective approach to alleviate rural poverty however land reform must come as part of a larger overhaul cluster analysis shows that land reform should target appropriate subgroups within the community in order to differentiate those who would make use of the extra land from those who would not and apply appropriate strategies to each subgroup it reveals the importance of subgroups in determining an appropriate strategy for tackling poverty

indian farmers valuation of yield distributions will poor farmers value pro poor seeds abstract potential poverty traps among the rural poor suggest a need to reduce poor farmers vulnerability by stabilizing crop yields and limiting yield losses advances in biotechnology will help address this need directly with crops that tolerate climate fluctuation or resist biotic stresses evaluating ex ante how farmers will value these pro poor seeds is important for delivery design but also challenging this paper describes an experimental economic approach to understanding farmers valuation of such seeds using data from a survey and experiment i assess indian farmers valuation of changes in the mean variance and skewness of payoff distributions these farmers value increases in expected value but seem indifferent about higher moment changes in payoff distributions farmer traits such as wealth and risk exposure affect their valuation of these changes only mildly while various limitations to the experimental approach must qualify practical implications of these findings the experiment demonstrates the viability of conducting valuation experiments with open ended questions in developing countries

credit constraints credit unions and small scale producers in guatemala abstract efficient and equitable development outcomes may depend in part on whether formal financial institutions leave low wealth producers tightly constrained in their access to credit if so can cooperative institutions efficiently relax these constraints these issues are explored using survey data gathered from 950 small scale producer households in areas of guatemala with market oriented credit unions that mobilize savings and make unsubsidized loans nonprice rationing by banks is found to be common among lower wealth households while credit unions relax credit constraints for a significant portion of those rationed by banks but not the poorest of the study households

pathways into and out of poverty a study of rural household wealth dynamics in kenya this study identifies the factors associated with smallholder farm households that have risen out of poverty or descended into poverty between 1997 and 2007 in kenya the study uses data from a nationwide balanced panel of 1 275 households and data from detailed retrospective life history survey of 84 households that had experienced either an appreciable improvement or decline in their asset wealth over the 10 year panel period the results indicate that household welfare dynamics are associated with a disparate set of idiosyncratic and unexpected shocks such as death and chronic illness demographic factors proximity to infrastructural facilities as well as intergenerational wealth transfers

agrarian structure and agricultural practice typology and application to western sudan a typology of models that explain patterns of variation in farm endowments and farm practices and yields shows that insecurity in renting land financing constraints and the absence of insurance generate patterns of factor use quite different from the famous inverse relationship caused by labor supervision problems one might expect to observe positive relationships between wealth and yields village level data from western sudan confirm that such positive relationships are not a theoretical curiosity wealthy farmers have higher levels of output per hectare because they use more labor per hectare insurance and financing constraints appear to be the crucial market failures

analyzing the welfare improving potential of land in the former homelands of south africa this article contributes to the debate on the role of land in reducing poverty in rural south africa it uses the year of arrival in the former homelands as an instrument for land access and size this identification strategy is based on the fact that african households were forcibly relocated to the homelands during the apartheid due to increasing population pressure later arrivals were less likely to be assigned land the results show that land has a large positive effect on household welfare because the homelands are relatively disadvantaged areas these results provide a lower bound for the positive effects of land on household welfare

interaction between housing prices and household borrowing the finnish case abstract employing time series econometrics this study shows that there has been a significant two way interaction between housing prices and housing loan stock in finland since the financial liberalization in the late 1980s before the financial deregulation the interaction was substantially weaker furthermore housing appreciation has a notable positive impact on the outstanding consumption loan stock it appears that there is no similar relationship between stock prices and credit understanding the two way interaction between housing prices and credit is of importance since the interdependence is likely to augment boom bust cycles in the economy and increase the fragility of the financial sector

access to capital and agrarian production organisation there are two problems both universal that entrepreneurs in any economy must contend with firstly an agent generally has access only to a limited amount of working capital secondly workers hired by an agent are subject to moral hazard and this necessitates their supervision this paper models for an agrarian economy the constraints imposed on entrepreneurs activities by these two problems and endogenously determines the various organisational forms of production as well as the allocation of resources that will obtain with a simple model we endeavour to explain a diverse set of empirical observations pertaining to the less developed countries in terms of the general processes that determine the distribution of income among the various agents and the hierarchical relationships that develop among them agricultural production typically involves a period of several months between the time the inputs are purchased and the time the output is marketed access to working capital and hence to the credit market thus plays an important role in a farmer s production decisions the distribution of access to credit in turn tends to be an important determinant of income distribution in poor agrarian economies credit is invariably rationed according to the ability to offer collateral the amount of working capital a farmer can mobilise therefore depends on the amount of land he owns which is often a good proxy for his overall wealth and thus his ability to offer collateral further since hired hands have a propensity to shirk they need to be supervised and therefore the

pension transfers and farm household technical efficiency evidence from south africa this article analyzes the effect of entitlements from the old age pension program of south africa on household technical efficiency using a sample of farm households in south africa s kwazulu natal province the analysis is at the household level and off farm activities are considered as additional outputs in a nonparametric estimation of technical efficiency this approach captures the jointness between farm and off farm activities the pension s effect is identified by exploiting the age eligibility criteria in the pension program results show a positive effect of the pension and suggest that this large cash transfer can improve households ability to make use of the best available technologies

rural poverty dynamics in kenya structural declines and stochastic escapes we use panel survey data and household event histories to explore patterns of rural poverty dynamics in kenya over the period 2000 2009 we find substantial mobility across poverty categories using economic transition matrices drawing on asset based approaches we distinguish stochastic from structural poverty transitions few households successfully escaped poverty through asset accumulation up to 35 of the upwardly mobile while a large proportion of households up to 66 declining into poverty experienced structural transitions using household event histories we find significant differences across structural poverty transition classes in livelihood strategies household level shocks and other factors

converting asset holdings into livelihood an empirical study on the role of household agency in south africa summary this paper analyzes the complexities of converting assets into livelihood and the role that agency constraints play drawing inspiration from the capabilities approach and using household data from south africa linkages between assets and agency are identified by decomposing asset endowments impact on future livelihood by employing a method of path analysis akin to early heritability of traits studies theoretical asset based studies of chronic poverty are bridged with capabilities literatures the interaction between assets and agency is shown to be as important as asset to asset complementarities the results have wide ranging policy implications

a new perspective on the ripple effect in the uk housing market comovement cyclical subsamples and alternative indices an alternative perspective is provided on the existence of a ripple effect in the uk housing market in contrast to previous studies the analysis involves consideration of information on the changes in house prices to which the hypothesis of house price diffusion posited by the ripple effect relates rather than their levels in an examination of changes in house prices in london relative to other regions of the uk directional forecasting methods are employed to establish the extent of the relationship between geographical proximity and comovement across the three month window provided by quarterly data consequently the analysis provides a direct examination of the ripple effect which refers to changes in prices rather than the convergence of levels which has become a feature of the empirical literature the literature is extended further by both the application of dating techniques to perform the analysis across cycles and phases of cycles recovery and recessionary periods in the uk housing market

speculative bubble spillovers across regional housing markets in this paper we determine whether speculative bubbles in one region in the united states can lead bubbles to form in others we first apply a regime switching model to determine whether speculative bubbles existed in the u s regional residential real estate markets our findings suggest that the housing markets in five of the nine census divisions investigated were characterized by speculative bubbles we then examine the extent to which bubbles spill over between neighboring and more distant regions finding that the transmission of speculative bubbles and nonfundamentals between regions is multidirectional and does not depend on contiguity or distance

asset versus consumption poverty and poverty dynamics in rural ethiopia several studies have shown conceptually that assets form a more robust basis for identifying the poor than do flow variables like expenditures or income asset based poverty classification can be used to distinguish structural from stochastic poverty and can enable projection of poverty dynamics through time nonetheless little work has empirically compared poverty measurement based on assets and expenditures to indicate the practical implications of the choice of poverty measure this article uses panel data between 1994 and 2004 from ethiopia to generate asset and expenditures based poverty classifications asset dynamics are then explored to test for the existence of multiple asset index equilibria that could constitute evidence of poverty traps results provide evidence of multiple equilibria and show that the asset based poverty classifications predict future asset and expenditures poverty status more accurately than expenditures based measures the findings confirm that the asset based measure could be used to more carefully target poverty interventions

small farmers ngos and a walmart world welfare effects of supermarkets operating in nicaragua despite more than a decade of ngo and government activities promoting developing world farmer participation in high value agricultural markets evidence regarding the household welfare effects of such initiatives is limited this paper analyzes the geographic placement of supermarket supply chains in nicaragua between 2000 and 2008 and uses a difference in difference specification on measures of supplier and non supplier assets to estimate the welfare effects of small farmer participation though results indicate that selling to supermarkets increases household productive asset holdings they also suggest that only farmers with advantageous endowments of geography and water are likely to participate

econometric issues in macroeconomic models with generated regressors the paper critically reviews the literature on the econometric issues raised by the use of generated regressors gr in empirical models the economic rationale for the use of gr is considered with examples being drawn from several macroeconomic examples including new classical macroeconomic ncm models which postulate monetary neutrality various estimation methods are discussed for models which include surprise or unexpected terms and the strengths and weaknesses of each approach are investigated drawing upon the work of mcaleer and mckenzie 1991 situations where the typically inefficient two step estimation 2se method will be efficient are highlighted problems of model misspecification and measurement errors are also investigated an empirical section highlights some of the dangers of using uncorrected 2se estimation results through a careful consideration of many recent attempts to test the ncm monetary neutrality hypothesis copyright 1993 by blackwell publishers ltd

poverty and famines an essay on entitlement and deprivation this book focuses on the causes of starvation in general and famines in particular the traditional analysis of famines is shown to be fundamentally defective and the author develops an alternative analysis

the food in security impact of land redistribution in south africa microeconometric evidence from national data summary the south african land reform program has been widely criticized for its slow pace as well as its apparent lack of contribution to poverty reduction no econometric evidence of the impact of land transfers has been provided to date and this paper attempts to fill this gap by considering the impact of receiving a land grant on households food insecurity propensity score matching and univariate probit estimates using two national household surveys indicate that on average land grant recipients are more food insecure than comparable non participants recursive bivariate probit estimates suggest that selection bias is not driving this result

does collateral fuel moral hazard in banking this paper presents two models in which the fluctuating value of loan collateral real estate generates the problem of moral hazard between a bank and a deposit insurance agent the bank finances risky projects against collateral and relies on the rising collateral value if the collateral value later appreciates the bank enjoys handsome profits otherwise the bank fails the findings are rather consistent with the characteristics of the topical subprime mortgage crisis

the effect of transfers on household expenditure patterns and poverty in south africa abstract this paper uses household level unit record data from south africa to examine the behavioural and welfare impacts of private and public transfers we allow for joint endogeneity of resource variables and the expenditure shares our results show that crowding out of private transfers as a result of the introduction of public pensions holds only for poor households and not for the non poor both private transfers and public pensions significantly reduce poverty but private transfers have a larger impact on expenditure patterns the results also reject the hypothesis of income pooling underlying the conventional unitary model by finding that the marginal impact on expenditures are different for public pension received private transfer received and other resources flowing into the household the principal conclusions are robust to changes in specification

poverty livelihood and class in rural south africa abstract using data from a national living standards survey undertaken in late 1993 this paper disaggregates and explores the economics of livelihood generation and class in rural south africa in an effort to contribute to the ongoing and vociferous debate in south africa about poverty and its alleviation pursuant to the suggestion of participants in a recent participatory poverty assessment this paper analyzes what might be termed the class structure of poverty after exploring the range of claiming systems and livelihood tactics available in rural south africa the paper offers a first look at who the poor are by disaggregating the rural population into discrete livelihood strategy classes non parametric regression methods are used to then estimate and graphically explore the nature of the livelihood mapping between endowments and real incomes in addition to identifying those endowment combinations that map to consumption levels below the poverty line the asset basis of poverty the topography of the estimated livelihood mapping helps identify the constraints that limit household s ability to effectively utilize their assets and endowments these results suggest that poverty is a matter of not only having few assets but also of constraints which limit the effectiveness with which those assets are used and poverty and livelihood policy needs to be designed accordingly

asymmetric effects of the business cycle on bank credit risk abstract prior empirical research on the relation between credit risk and the business cycle has failed to properly investigate the presence of asymmetric effects to fill this gap we examine this relation both at the aggregate and the bank level exploiting a unique dataset on italian banks borrowers default rates we employ threshold regression models that allow to endogenously establish different regimes identified by the thresholds over below which credit risk is more less cyclical we find that not only are the effects of the business cycle on credit risk more pronounced during downturns but cyclicality is also higher for those banks with riskier portfolios

issues in measuring and modeling poverty economists have relied heavily on household incomes or expenditures normalized for differences in household specific prices and demographics in their research and policy advice related to poverty and inequality recognizing the conceptual and empirical problems that confound such measures does not mean that they should be ignored instead it indicates the need for supplementary measures to capture the missing items implementing a genuinely multidimensional approach will often make the welfare rankings of social states more difficult but that fact points to the nonrobustness of low dimensional rankings this may have its own policy ramifications with the possibility of correspondence between policy instruments and welfare objectives the model types used to understand the poverty and inequity determination processes will be affected not only will there be more dependent variables to consider but variables will have potentially complex relationships these relationships will often be hard to empirically disentangle despite richer integrated and longitudinal data sets such data open rich and relevant agenda for research into the dynamics of poverty along multiple dimensions a simultaneous attack on these issues from all three fronts measurement modeling and data offers hope of establishing a credible empirical foundation for public action in fighting poverty

market imperfections liquidity and farm household labor allocation the case of rural south africa asset endowments and market imperfections shape households labor allocation decisions and lead to different production regimes within rural farm households in south africa this article uses a farm household model to explain the presence of three main household groups determined on the basis of the labor regime adopted small peasants working both on and off farm self cultivators autarkic in labor and hiring in households a partial generalized ordered logit is used to test the main predictions of the model and a brant test on threshold constancy is performed to identify the household specific factors affecting labor market participation the results show that liquidity constraints and market imperfections matter in the choice of the labor strategy adopted liquidity constrained households are more likely to sell labor off farm while access to information facilitates the hiring in of workers

the price premium of generic to brand names and pharmaceutical price index the price premium of generic pharmaceuticals to brand names is examined under different competitive market situations the result of this study shows that the number market share and the age of both brand name and generic products have the most explanatory power for explaining the price premium this study further applies this method to a pharmaceutical price index in order to explain drug price index perplexities

one kind of freedom poverty dynamics in post apartheid south africa abstract a 1993 south african living standards survey documented the legacy of apartheid in the form high levels of inequality and human insecurity drawing on a 1998 re survey of households in the 1993 study this paper explores whether this legacy has been superseded or whether apartheid s end has been only one kind of freedom that has left households in a poverty trap from which they cannot escape after proposing a theoretically grounded dynamic poverty typology that distinguishes stochastic from structural poverty transitions the paper goes on to estimate that significant numbers of the south african poor are potentially trapped in a structural poverty trap and lack the means to escape poverty over time

evaluating water policy scenarios against the priorities of the rural poor summary a stated choice method evaluates how well water policy responds to the preferences of the rural poor in south africa household priorities to experimental scenarios of water resource and water services attributes are investigated in two communities with poor water access in a semi arid zone results identify improved water accessibility as the most important intervention for social welfare gains particularly benefiting female water collectors a latent class specification reveals two sub groups with different weighted preferences this specification reinforces the primacy of domestic water access and also identifies a smaller but significant group with preferences for water availability for kitchen garden irrigation

level playing fields and laissez faire postliberal development strategy in inegalitarian agrarian economies focusing on the rural sector in latin america this paper explores the microeconomic linkages between distribution and growth which drive the possible reproduction of rural poverty over time the result of this exploration is a neostructuralist perspective which argues that actually existing laissez faire agrarian economies do not present a level playing field and that low wealth farms face disadvantages which tend to reproduce or even deepen sectoral inequality the paper then tries to identify the sorts of public policy and collective action which might modify the nature of growth and distribution in post liberalization agrarian market economy

house prices non fundamental components and interstate spillovers the australian experience abstract using australian capital city data from 1984q3 2008q2 this paper utilizes a dynamic present value model within a var framework to construct time series of house prices depicting what aggregate house prices should be given expectations of future real disposable income the fundamental price and continues by comparing capital city fundamental prices with actual prices the extent to which revealed capital city non fundamental components spillover from state to state as well as their long term impact is also investigated results provide evidence of periods of sustained deviations of house prices from values warranted by income for all state capitals with the greatest deviations arising in the nsw market and starting around 2000 in general nsw is relatively more susceptible to spillovers transmitted from other states while act and wa are most isolated from the rest of the country

eductive expectations coordination on deterministic cycles in an economy with identical fundamentals abstract we study expectations coordination on a deterministic cycle of period 2 by an eductive approach in which agents are concerned with forecasting the forecasts of others this approach is grounded in some common knowledge assumptions we use this approach to discuss the problem of equilibrium selection between the stationary state and a cycle of period 2 we prove that locally eductively stable cycles of period 2 can exist if agents have stationary beliefs

self exciting effects of house prices on unit prices in australian capital cities this paper examines the long and short run relationship between australian house and unit prices across all capital cities over the period december 1995 to june 2015 we find that house and unit prices are cointegrated and based on the results of granger causality and generalised impulse responses that house prices significantly influence unit prices across all cities however bi directional causality responses exists only for major capital cities with the exception of brisbane we also for the first time apply self excited threshold models to explore the complex interplay between house and unit prices in australia we find that when the market for units is self excited or bullish the positive effects of house prices on unit prices are noticeably larger than otherwise there is a varying degree of herd mentality in the australian property market with sydney and darwin being the most and least excitable capital cities respectively

synchronisation and commonalities in metropolitan housing market cycles this paper examines the degree of commonalities present in the cyclical behaviour of the eight largest metropolitan housing markets in australia using two techniques originally proposed in the business cycle literature we firstly consider the degree of synchronisation present and secondly decompose the series into their permanent and cyclical components both empirical approaches reveal similar results sydney and melbourne are closely related to each other and are relatively segmented from the smaller metropolitan areas in contrast there is substantial evidence of commonalities in the cyclical behaviour of the remaining cities especially those on the eastern and southern coasts of australia

international house prices and macroeconomic fluctuations abstract the paper investigates linkages between general macroeconomic conditions and the housing market for the g 7 area among the key results of the paper we find that the us are an important source of global fluctuations not only for real activity nominal variables and stock prices but also for real housing prices secondly albeit distinct driving forces for real activity and financial factors can be pointed out sizeable global interactions are also evident in particular global supply side shocks are an important determinant of g 7 house prices fluctuations the linkage between real housing prices and macroeconomic developments is however bidirectional with investment showing in general a stronger reaction than consumption and output to housing price shocks implications for the real effects of the sub prime crisis are also explored

on the consistency of backward looking expectations the case of the cobweb in dynamic models of economic fluctuations backward looking expectations with systematic forecasting errors are inconsistent with rational behaviour in non linear dynamic models exhibiting seemingly unpredictable chaotic fluctuations however simple habitual rule of thumb backward looking expectation rules may yield non zero but nevertheless non systematic forecasting errors in a chaotic model expectational forecasting errors may have zero autocorrelations at all lags even for rational agents patterns in these forecasting errors may be very difficult to detect especially in the presence of small noise backward looking expectations are then not necessarily inconsistent with rational behaviour we investigate whether simple expectation schemes such as naive or adaptive expectations can be consistent with rational behaviour in the simplest of all non linear dynamic economic models the non linear cobweb model

income diversification poverty traps and policy shocks in cote d ivoire and kenya abstract this paper presents evidence on the effects of two different sorts of policy shocks on observed income diversification patterns in rural africa in cote d ivoire households with poor endowments were less able to respond to attractive emerging on farm and non farm opportunities due to entry barriers to superior livelihood strategies the benefits of exchange rate reform accrued disproportionately to households that were richer prior to devaluation by contrast food for work transfers to households in kenya significantly reduced liquidity constraints enabling project participants to pursue more lucrative livelihood strategies in non farm activities and higher return agricultural production patterns jointly these two shocks underscore the importance of liquidity market access and skill constraints to skilled non farm income sources to dynamic poverty traps in rural africa