when is external debt sustainable the article empirically examines the determinants of debt distress defined as periods in which countries resort to any of three forms of exceptional finance significant arrears on external debt paris club rescheduling and non concessional international monetary fund lending probit regressions show that three factors explain a substantial fraction of the cross country and time series variation in the incidence of debt distress the debt burden the quality of policies and institutions and shocks the relative importance of these factors varies with the level of development these results are robust to a variety of alternative specifications and the core specifications have substantial out of sample predictive power the quantitative implications of these results are examined for the lending strategies of official creditors

work income and inequality payment systems in the third world frances stewart ed macmillan london 1983 pp x 333 20 00

policy reform and productivity change in chinese agriculture a distance function approach abstract agricultural policy reform has been an important source of change in the chinese agricultural sector the reforms led to productivity growth and helped china to pursue its self sufficiency goal especially in the grain sector in order to analyze whether observable productivity growth stems from technologically induced components or from the market induced parts a multi input multi output model is derived by using an econometric distance function framework a decomposition allows to distinguish allocative effects scale effects technological change and technical efficiency change data on farms in zhejiang from 1986 to 2000 are used to analyze the impact of policy reform

adoption of an imf programme and debt rescheduling an empirical analysis the existence of an empirical relationship between the adoption of an imf programme and the concession of a debt rescheduling by commercial and official creditors is tested using a bivariate probit model if countries who have arrangements with the imf are more likely than others to obtain a rescheduling of their external debt we could conclude that the adoption of an imf programme could work as a sort of signal of a country s good willingness which is thus rewarded with the debt relief the results confirm the existence of a significant effect of the adoption of an imf programme on the subsequent concession of a debt rescheduling by creditors

marketed surplus under risk do peasants agree with sandmo using a newly defined notion of aversion to income risk the behavior of the marketed surplus producer under price risk is characterized unlike the familiar case first examined by sandmo output depends on both ordinal preferences for goods and on risk attitudes conditions are found that yield an output level under risk that is smaller than under certainty if these conditions do not hold both risk and risk aversion may have a positive effect on output implications for econometric studies of risk attitudes are considered and illustrated with an example finally we examine the effect of uncertainty on the peasant s long run equilibrium

globalisation transport and the environment new perspectives for ecological economics this article aims to offer an overview of key issues centred around the relationship between globalisation and transport related environmental decay in the ecological economics literature of the past decade followed by an exploration of new research endeavours the scientific contribution of 10 years of ecological economics to issues of environmental sustainability in relation to international trade and transport is certainly not impressive hence also contributions from other environmental economics journals are considered two themes which apparently have received less attention in the ecological economics literature are addressed namely 1 the influence of global trade on the environment and 2 the environmental effects of international transport induced by trade the total effect of globalisation and transportation on the environment originates from complex changes in the scale structural technological and product effects of our industrial system various conflicts between global trade transportation and the environment are pointed out on the basis of these four effects the paper argues that the net effects of these changes are still uncertain ecological economics however should contribute to the challenging task of analysing more thoroughly the effects of global trade and transport on the environment

three approaches to predict the timing and quantity of ldc debt rescheduling the performance of three approaches to predict the timing and quantity of ldc debt rescheduling is examined the balance sheet approach the traditional macro approach and the structural approach results show that the balance sheet approach performs better

moving off the farm and intensifying agricultural production in shandong a case study of rural labor market linkages in china this study examines linkages between off farm labor markets and the labor allocated by farmers to on farm production of fruit crops using a stratified random sample of rural households in shandong province we find that young and educated members of the labor force tend to work more frequently in the off farm labor market and that off farm employment reduces the likelihood and intensity of fruit production fruit production is associated with lower levels of off farm employment households and individuals who are less likely or able to find off farm employment can benefit from shifting into fruit production although off farm employment is an important avenue out of poverty fruit production provides ways for the less educated and older households to raise their income

real and monetary determinants of real exchange rate behavior theory and evidence from developing countries abstract this paper develops a dynamic model of real exchange rate rer behavior in developing countries a three goods economy exportables importables and non tradables is considered residents of this country hold domestic and foreign assets and there is a dual exchange rate regime there is a government that consumes importables and non tradables a distinction is made between equilibrium and disequilibrium movements of the rer the determinants of real exchange rate misalignment are studied with emphasis placed on the role of devaluations and balance of payments crises the implications of the model are tested using data for 12 developing countries the results obtained are generally favorable for the model the issue of rer stationarity is also analyzed

what makes growth sustained abstract we identify structural breaks in economic growth in 140 countries and use these to define growth spells periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample growth spells tend to be shorter in african and latin american countries than elsewhere we find evidence that growth duration is positively related to the degree of equality of the income distribution democratic institutions export orientation with higher propensities to export manufactures greater openness to fdi and avoidance of exchange rate overvaluation favorable for duration and macroeconomic stability

economic and political determinants of budget deficits in developing countries abstract the evidence from a large sample of developing countries tends to reject the empirical implications of optimizing models of the process of determination of fiscal deficits tax rates seigniorage and inflation the paper also presents some preliminary evidence that an important reason for the failure of the equilibrium approach to fiscal policy is that fiscal deficits are partly determined by political factors and that cross country differentials in budget deficits may depend on measures of political instability in particular as suggested by a number of recent theoretical approaches an increase in the degree of political instability appears to lead to greater budget deficits

labor market participation of chinese agricultural households empirical evidence from zhejiang province abstract this work is devoted to the analysis of the different labor market participation regimes of chinese farm households over the reform process in the 1980s and 1990s using household data over the period 1986 2002 from the province zhejiang we apply a multinomial logit model to empirically examine household farm and regional characteristics affecting the probability that farmers participate in one of four alternative labor market regimes as generally accepted off farm participation is the dominant form of farm households labor market participation but rural households show additionally a significant impact on rural employment mainly linked with non agricultural household business results suggest that labor market decisions are significantly related to several family farm and village characteristics in particular we find education to be a key determinant of participation furthermore results point to a higher probability of female household members to take up off farm work

banker judgement versus formal forecasting models the case of country risk assessment abstract the allocation of credit to less developed countries depends upon lenders judgements of country risk research in psychology suggests that human judgement may be prone to bias this paper uses the institutional investor country credit ratings as indicators of banker judgement in terms of their ability to predict the emergence of arrears on external debt service it is shown that bankers are overly pessimistic about the creditworthiness of less developed countries multivariate statistical models have a higher overall predictive accuracy although they may arguably be outperformed by banker judgement when allowance is made for the differential costs of type i and type ii errors

the political economy of inflation and stabilization in developing countries the traditional literature on inflation in developing countries has focused on three main determinants of inflationary pressures a money creation b fiscal imbalances and c cost push elements while the first two factors have been emphasized by authors of a monetarist persuasion cost factors have played a crucial role in the structuralist theories developed during the 1950s and 1960s however more recent analyses on inflation and stabilization have shifted their attention away from traditional direct economic causes of inflation such as money creation toward political and institutional determinants of inflationary forces this new literature which has come to be known as the political economy approach to macroeconomic policy has built on some important insights of game theory and the theory of public choice trying to explain why some governments decide to run large fiscal deficits and to rely heavily on the inflation tax typically in answering these questions this recent strand of the literature has emphasized the role of political instability credibility reputation and political cycles 2 in spite of providing some important new insights into the determinants of inflation this new literature is subject to two limitations first until recently most of the contributions have been theoretical without providing empirical tests on their most important implications and second the emphasis has been almost exclusively on the industrialized countries ignoring the developing nations the purpose of this article is to discuss selectively some of the most important insights of this new literature on policy making from the developing countries perspective i will emphasize the policy implications of this approach to inflationary analysis and discuss some of the limited empirical results

national wage trends and migration in a chinese village economy a micro level modeling approach based on a composite utility function china s economy is experiencing a regime shift away from a fully elastic supply of labor from a large pool of rural surplus labor and toward a situation of increasing labor scarcity and rising wage rates moreover faster wage increases in the regions of origin of many rural urban migrants are likely to affect the dynamics of inter regional migration these wage trends have implications at the local level in particular in a setting in which migration connects rural communities to the national labor market and in which migration is of high importance for the livelihoods of rural households taking a village perspective this article develops a village computable general equilibrium model to study local impacts of current wage trends in china as a central piece of the model the role of access to migration for household livelihoods is recognized access to migration is linked to household demographics and included in the model through a composite utility function that captures household preferences and disutilities associated with alternative off farm activities simulation results illustrate how households utility considerations affect migration responses to national wage changes statements about possible impacts on village level labor supply land use and agricultural production are made when migration wages and local off farm wages are simulated to increase an overall increase in household and village migration and a higher supply of labor to local off farm labor markets is accompanied by a contraction of farm production although land is reallocated between households with different migration responses total agricultural output declines

distributional implications of macroeconomic policy theory and applications to el salvador abstract this article offers a theoretical framework for designing macroeconomic strategy for el salvador that will both respect stabilization and structural adjustment needs and enhance social equity after outlining the largely negative distributional implications of the orthodox policies followed by el salvador in recent years we argue that stabilization and efficiency could actually be improved by increased equity and sketch out the elements of an alternative approach that would be distributionally sensitive and thereby help consolidate the peace

rural urban disparity and sectoral labour allocation in china this study examines china s rural urban segmentation and its causes in the context of economic reforms household survey and aggregate data indicate a v shaped process in which rural urban consumption and income differentials decreased between 1978 and 1985 but then have continually increased to historically high levels this sectoral division is consistent with production function estimates based on provincial data that reveal higher labour productivity in urban state owned industries than in rural industries and agriculture to explain the v shaped change we argue that the precedent of successful rural reforms raised farmers relative earnings but the remaining obstacles to an efficient sectoral allocation of labour have prevented china from eliminating dualism recent financial policies consisting of urban price subsidies and increased investment credits have also had influential distribution effects that are biased against the rural sector

adjustment policies in developing countries a reassessment this paper analyzes policy responses to external shocks of the 1973 76 and 1979 81 periods in developing economies grouped according to the level of industrialization and the policies applied it is shown that outward oriented economies relied largely on export promotion and import substitution to offset the balance of payments effects of external shocks in both periods inward oriented economies failed to apply such output increasing policies of adjustment rather they financed the balance of payments effects of external shocks by foreign loans in the 1974 76 period and had to take deflationary measures in 1979 81 when their increased indebtedness limited the possibilities for further borrowing the policies applied led to rates of economic growth substantially higher in outward oriented than in inward oriented economies with growth rates in 1983 averaging 5 percent in the first case and practically nil in the second

dimensions and diversity of property rights in rural china dilemmas on the road to further reform abstract this paper contributes to the debate over land tenure in rural china by conceptualizing and measuring multiple dimensions of property rights in a way that elucidates the competing interests that are affected by the property rights regime utilizing a unique village level data set this paper argues that the regional and temporal variation in rural property rights signals a pattern in which decentralized institutional innovation occurs in response to the competing interests of the national state of local authorities and of present and possible future individual land users unlike the earlier debate concerning the household responsibility system the current property rights dilemma is intrinsically more complex because the potential conflicts of interest between individuals local collectives and the state are greater resolution of that debate will ultimately require careful exploration of the reality and substance of the tradeoffs and competing interests that make further reform of rural property rights so difficult

an optimization model for a monopolistic firm serving an environmentally conscious market use of chemical reaction optimization algorithm this work considers a monopolist firm which faces the following twin challenges of serving an environmentally sensitive market the first challenge is the demand s elasticity to emissions and price to entice its emission conscious customers and generate higher demand the firm incrementally invests in cleaner production technologies it also adopts a voluntary limit on its emissions from transportation however such investments and penalty lead to the second challenge of reduced net profit to address above trade off a non linear programming nlp model with a maximization quadratic profit function has been formulated recently developed chemical reaction optimization algorithm with superior computational performance has been adopted to solve the nlp the output of the model provides near optimal monopolistic price best attainable reduction in manufacturing emissions through proportional investment and makes a choice of suitable mode of transportation for each type of product offered by the firm three types of sensitivity analyses were performed by varying contextual parameters customers emission elasticity penalty charged per unit emission and investment coefficient the results underpin the importance of investments in cleaner technologies and the need of financial aids for profit maximizing firms operating in cleaner markets this work provides a decision making tool to determine the near optimal degree of each of the above dimension in multiple business fronts

female labor supply in japan implications of the informal sector for labor force participation and hours of work this paper extends previous work on labor supply in japan by treating the simultaneous labor force participation and hours of work decisions for japanese wives both employees and family workers it estimates a trichotomous participation model for a sample from the tokyo metropolitan area and then estimates hours and wage equations and aggregate labor supply elasticities the empirical results generally confirm the economic model s theoretical predictions although the estimated aggregate wage and income elasticities for employees are somewhat higher than previous estimates for the u s they are of the same order of magnitude however the level of the husband s income has an unexpected positive effect on the annual hours that employees work and the elasticities estimated for family workers are usually large

customer regulatory and competitive pressure as drivers of environmental innovation we develop an economic analysis in order to examine the effects of consumer regulatory and competitive pressure on firm investments in environmentally friendly production specifically we ask why do firms vary in their levels of environmental innovation under what conditions are such pressures effective in bringing about environmental innovation we first consider a monopolist who faces the twin pressures of reduced customer demand and regulatory penalties as a result of its emissions in response to these pressures the firm has the opportunity to make a costly investment in reduction of emissions secondly we consider a competitive scenario in which two firms compete for environmentally sensitive customers solving our model we find that pressure has the intended effect as long as the firm s initial level of emissions is below a certain threshold if the emissions are above this threshold we find that pressure might have an adverse effect on the firm s environmental investment and that subsidies that support environmental innovation can be a better alternative we also show that competition over environmentally sensitive customers can improve the effectiveness of environmental pressures

the evolution of income inequality in rural china abstract in this article we analyze trends in income inequality and the distribution of income in rural china from 1987 to 1999 we find an uneven but long run increase in inequality in rural china and show that nearly half of the rural population was not much better off in 1999 than at the start of the period we rule out geography as the most important factor for explaining income differences and the increases that occurred over time much more important were growing differences between households living in the same village province or region we also find that access to nonagricultural incomes from local wage employment and family businesses contributes to inequality but that employment outside the county in which a household lives and accessed through temporary migration is relatively equalizing finally we document important strengths and weaknesses of the primary data set used for our analyses relative to other data sources available for study of inequality and poverty in rural china

redistribution and non consumption smoothing in an open economy this paper presents a model where income distribution and redistributive fiscal policy interact to affect the budget deficit and the pattern of net borrowing of a country according to the standard representative agent paradigm a small open economy should smooth consumption by borrowing from lending to the rest of the world when its income increases declines over time the simple model of this paper delivers exactly the same predictions in the absence of income dispersion when income distribution is not degenerate however the same model gives rise to a surprising wealth of results in particular poor economies with high inequality may exhibit completely counter intuitive patterns of fiscal policy and external borrowing the country s production path declines over time because the more mobile agents leave the country to escape taxation yet the country might end up having a budget deficit and borrowing from abroad thereby reinforcing rather than smoothing the asymmetry in consumption between the two periods an important feature of this outcome is that it is backed by both the poor and the rich who gain from the fiscal system at the expense of the middle class

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

using country balance sheet data to predict debt rescheduling in this study we utilise data relating to the balance sheets of developing countries e g short term debt in a logit model of debt rescheduling we find that such variables are theoretically and empirically superior to those conventionally used such as debt export ratios the study is based upon an annual sample of 27 countries for 1977 1981 and a six monthly data set involving 59 countries from 1977 1985

labor market adjustment to political conflict changes in the labor market in el salvador during the 1980s abstract i use household survey data for the 1980s to examine changes in the labor market of el salvador the findings suggest that the labor market does adjust to conflict there have been significant effects of conflict on the regional distribution of employment on international migration on internal migration in the areas directly affected other indicators such as labor force participation and self employment rates show outcomes are lower in the areas that were affected by conflict but were lower even before the conflict began and for earnings the level of real hourly earnings has fallen substantially in all areas in the 1980s

predicting the quantity of ldc debt rescheduling in this paper we estimate a type 2 tobit model to explain both the timing and quantity of developing country debt rescheduling using an annual data set for 27 countries from 1977 1981 and six monthly data for 59 countries from 1977 1985 we obtain a satisfactory model for both the timing and quantity of rescheduling which will be more useful for country risk analysis than models which predict the timing alone

regional agricultural labour productivity convergence in china abstract this paper tests for regional agricultural labour productivity alp convergence in china the analysis indicates that alp diverges between 1985 and 1992 but converges between 1992 and 2000 further analysis shows that these findings can be explained by the different rates of agricultural out migration in these two periods we argue that these different rates of regional agricultural out migration can be attributed to the different government policies and economic conditions before and after 1992 in particular migrants from rural to urban areas found it easier to obtain both food and work in the post 1992 era

external shocks politics and private investment some theory and empirical evidence abstract the manner in which the political system responds to external economic shocks in developing countries is a key determinant of the private investment response we look at a simple model of political economic equilibrium to make this intuition more precise and developed the idea of a political transmission mechanism even in the confines of this simple model we find that ambiguities abound domestic politics can magnify or dampen the effect of the external shock in our empirical work we find that a high level of urbanization magnifies the investment reduction in response to an external shock this is consistent with the supposition that high levels of urbanization are conductive to distributive politics with pernicious economic effects we also find that the provision of political rights is conductive to superior private investment behavior

quasi maximum likelihood estimation of multivariate probit models farm couples labor participation joint estimation of farmers farm and off farm work participation requires a multivariate probit model in which the number of equations is twice the number of household members where there are more than two such equations i suggest a quasi maximum likelihood method which requires only two levels of numerical integration the method maximizes the use of sample information given this numerical feasibility condition it is used for estimating a joint participation model of farm couples farm and off farm work the model yields conclusions about comparative advantages of men and women in farm off farm and housework which cannot be obtained with a more limited setup

polarization politics and property rights links between inequality and growth most efforts to trace the effects of income inequality on growth have focused on redistribution however empirical investigation has not substantiated either the positive association of income inequality with redistribution or the negative association of redistribution with economic growth the authors analyze the effects of inequality in the broader context of social polarization they argue that social polarization whether rooted in income inequality or in ethnic tension makes large changes in current policies including those guaranteeing the security of contract and property rights more likely under a wide range of institutional arrangements the resulting uncertainties in the policy and contractual environment hinder growth they find strong empirical support for both parts of this argument the policy implications of their argument are quite distinct from those of arguments that inequality reduces growth by increasing pressures for redistribution if redistributive policies per se were to blame for the low growth resulting from inequality governments that seek to mitigate income inequality must inevitably confront a tradeoff between equity and growth if on the other hand the insecurity of property rights slows growth in unequal or otherwise polarized societies governments that commit over the long run to particular redistributive policies incur less risk of slowing economic growth fiscal redistribution that reduces inequality may actually increase growth by reducing the risks of political uncertainty

monetary policy delegation and polarisation there is by now a comprehensive literature beginning with rogoff 1985 arguing that a government should delegate monetary policy to a central banker who is independent and more conservative than the government itself this will reduce the inflationary bias typically at the cost of stabilisation for a democratic society this result would suggest that the median voter should prefer that monetary policy is delegated to an independent central banker who is more conservative than herself typically the central banker is chosen by the government and the government is chosen by the electorate thus there is some albeit perhaps a weak link between the preferences of the electorate and the central banker although the central banker presumably should be chosen for a long period of time waller and walsh 1996 he has to be chosen at some point in time this paper contains a political economy model where the central issue in politics is the choice of central banker and

modelling labour decisions of french agricultural households a joint model of labour decisions for farm couples is presented attention is given to operator and spouse participation decisions in the off farm labour market as well as the decision to use hired farm labour farm household labour choices which include both on farm and off farm work decisions and hired labour decisions are thus modelled as a household joint process the model is applied to a sample of french farm households empirical results illustrate the importance of spouse decisions on off farm labour participation and supply function structure they also show that operator labour and hired farm labour are complementary but wife labour and hired farm labour are substitutable

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

the relative effects of employed and unemployed job search a lthough many early models of job search assumed that job seekers were unemployed economists have come to recognize the importance of on the job search mattila 1974 for example found that roughly 60 of quitters experienced no unemployment between jobs implying that the majority of voluntary job changers engaged in on the job search the choice of search mode i e employed vs unemployed search has been modelled in the theoretical search literature barron and mccafferty 1977 burdett 1978 however there have been no attempts to estimate empirically the determinants of this choice 2 some researchers have however examined the resulting wages associated with these two types of search and found a greater wage return to employed than to unemployed search mattila 1969 black 1980 however because voluntarily unemployed search involves forgoing income burdett 1978 while employed search does not abstracting from voluntary reductions in hours incomemaximizing job seekers would never quit to search unless the expected net return to unemployed search exceeded that for employed search thus the previously mentioned empirical findings at first glance might appear to contradict the assumption of income maximization by job seekers because some workers do quit into unemployment 3 in this paper it is argued that previous attempts to compare the returns of employed and unemployed job search suffer from a selectivity problem specifically searchers who accept offers without experiencing any unemployment are likely to have unobservable variables such as informal job contacts and ability which will raise the relative return to employed search compared to that of voluntarily unemployed job seekers 4 providing an explanation for higher wages for on the job searchers than for unemployed searchers this paper estimates the relative wage effects of employed and unemployed search and the determinants of the choice of search mode i e employed vs unemployed search unlike earlier work mattila 1969 black 1980 the previously mentioned selectivity problems are accounted for this is the first attempt to estimate the determinants of choice of search mode 5 without adjusting for selectivity bias as regards employed vs unemployed search it is found that employed search is associated with greater expected wage offers than unemployed search controlling for measurable personal characteristics however accounting for selectivity the expected wage offer given unemployed search is greater than that given employed search finally the greater is the difference between the expected offer given unemployed and that given employed search the more likely one is to choose unemployed search these findings suggest that quitting to search unemployed may be a wealth maximizing decision received for publication november 5 1980 revision accepted for publication august 17 1981 university of illinois at urbana champaign and arizona state university respectively professor low is partially supported by a faculty grant from the graduate college at arizona state university the authors thank francine blau wallace hendricks and two anonymous referees for comments and suggestions i for a summary of this literature see lippman and mccall 1976 2 barron and mccafferty 1977 do estimate an aggregate time series model of the log of the proportion of quits entering unemployment as a function of the vacancy rate proxied by the help wanted advertising index however such a model ignores search that does not lead to quits and does not include variables beyond the vacancy rate that influence an individual s choice of search mode i it is also possible that the forgone earnings due to unemployed search could in principle be less than the possible savings in direct search costs due to unemployed search relative to employed search see burdett 1978 in this case a lower wage return to unemployed search could imply that quitting was based on income considerations further individuals may have quit for nonwage reasons 4 black 1980 found that other things equal those who planned to seek new employment but did not quit had significantly lower wage growth than those who did not plan to search and did not quit this finding strongly suggests the likelihood of a selectivity bias black 1980 p 227 black s 1976 1980 data the michigan panel study of income dynamics psid for his work on employed search did not allow him to distinguish employed and unemployed search

the political economy of sovereign defaults abstract how do income distribution and the tax system affect sovereign borrowing and default decisions are these effects shaped by the political constraints that governments face when raising revenues to repay the debt to address these questions we incorporate agent heterogeneity in terms of income distribution and tax burden and a political support constraint into a standard dsge model of sovereign default the results show that income inequality and regressive taxes make defaults more likely for a given level of debt while they reduce sovereign borrowing in equilibrium tighter political support requirements reinforce these effects

transactions costs and agricultural household supply response we develop and estimate a model of supply response when transactions costs create a situation where some producers buy others sell and others do not participate in markets we present two rationales for why producing households may have different relationships to the market proportional and fixed transactions costs using data on mexican corn producers we estimate an empirical model that allows for separate tests of the significance of both types of transactions costs revealing that both fixed and proportional transactions costs matter for the estimation the results provide consistent estimates of supply elasticity and measures of the relative importance of factors determining both proportional and fixed transactions costs

public opinion and market reforms the limits of economic voting the broadly held view that promarket reforms are good for most people is in conflict with the equally broadly held view that in democracies reforms will generate widespread resistance resistance is expected because reforms typically produce economic downturns at least over the short term under normal circumstances we expect citizens to withdraw support from governments during periods of economic decline if citizens withdraw support then governments worried about the next election may abandon reforms but our expectations should be different of new democracies pursuing promarket reforms citizens may believe governments when they claim that things have to get worse before they get better or that economic stagnation is the fault of the past model research in poland peru and mexico reported in this special issue supports these expectations hence under democracy there is more scope for support of painful reforms than frequently acknowledged

evolutionary framework design in formulation of decision support models for production emissions and net profit of firm implications on environmental concerns of supply chains abstract there have been increased investments in cleaner technologies and adoption of a voluntarily limit on transportation emissions by the global firms to handle the environmental concerns of supply chains and to increase demand for finished goods consequences are the reduction in net profit for the firm to address this trade off between the net profit and environmental concerns the formulation and optimization of a compact model are needed development of these models requires a thorough understanding of the nature of the impact of three inputs investment coefficient penalty per unit emission and customer s emission elasticity on production emissions and net profit past studies revealed that a compact model comprising the interactive effect of these inputs on the production emissions and net profit is not yet formulated therefore this study illustrates the development of an evolutionary framework of an advanced multi gene genetic programming in the formulation of functional expressions for the net profit and production emissions based on the three inputs investment coefficient penalty per unit emission and customer s emission elasticity of the monopolist firm the sensitivity and parametric based 2 d analysis determine the relationships and found that the penalty per unit emission is dominant input for reducing emissions and maintaining net profit simultaneously the contribution of this work lies in designing of an evolutionary framework in the development of empirical explicit expressions which can easily be optimized analytically to keep production emissions and net profit balanced

a carbon market sensitive optimization model for integrated forward reverse logistics globalized supply chains volatile energy and material prices increased carbon regulations and competitive marketing pressure for environmental sustainability are driving supply chain decision makers to reduce carbon emissions enterprises face the necessity and the challenge of implementing strategies to reduce their supply chain environmental impact in order to remain competitive one of the most important strategic issues in this context is the configuration of the logistics network the decision concerning the design of an optimal network of the supply chain plays a vital role in determining the total carbon footprint across the supply chain and also the total cost therefore the logistics network should be designed in a way that it could reduce both the cost and the carbon footprint across the supply chain in this context this research proposes a quantitative optimization model for integrated forward reverse logistics with carbon footprint considerations by integrating the carbon emission into a quantitative operational decision making model with regard to facility layout decisions the proposed research incorporates carbon emission parameters with various decision variables and modifies traditional integrated forward reverse logistics model into decision making quantitative operational model minimizing both the total cost and the carbon footprint the proposed model investigates the extent to which carbon reduction requirements can be addressed under a particular set of parameters such as customer demand rate of return of products etc by selecting proper policy as an alternative to the costly investment in carbon reducing technologies to solve the quantitative model this research implements a modified and efficient forest data structure to derive the optimal network configuration minimizing both the cost and the total carbon footprint of the network a comparative analysis shows the outperformance of the proposed approach over the conventional genetic algorithm ga for large problem sizes

managing carbon footprints in inventory management abstract there is a broad consensus that mankind must reduce carbon emissions to mitigate global warming it is generally accepted that carbon emission trading is one of the most effective market based mechanisms to curb the amount of carbon emissions this paper investigates how firms manage carbon footprints in inventory management under the carbon emission trading mechanism we derive the optimal order quantity and analytically and numerically examine the impacts of carbon trade carbon price and carbon cap on order decisions carbon emissions and total cost we make interesting observations from the numerical examples and provide managerial insights from the analytical results

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

local economic conditions and wage labor decisions of farm and rural nonfarm couples effects of geographical differences in local economic conditions on wage labor demand and wage labor participation decisions of rural couples are examined for current population survey households 1978 82 wage premiums are shown to exist for localities anticipating labor demand growth higher unemployment rates larger share of employment in services and higher costs of living these effects are stronger for males than females effects of local economic conditions on the probability of wage work are consistent with expected market wage and reservation wage effects and for farm households the probability of wage work increases when expected farm output prices decline or the wage increases

the new economics of labor migration this paper reviews selected theoretical and empirical developments in the field of labor migration economics the migration behavior of individuals differs in accordance with their perceived relative deprivation those who are relatively more deprived tend to have stronger incentive to migrate than those who are relatively less deprived moreover a reference group characterized by more income inequality is likely to generate more relative deprivation highly skilled workers are also more likely to migrate migration decisions are often made jointly by the migrant and nonmigrant with a contractual arrangement regarding the sharing of costs and returns the exchange of commitments to share income provides coinsurance of particular interest are the determinants of the speed of adoption of migration as an innovation and the characteristics associated with the delay in the adoption of innovation new econometric techniques including techniques for the analysis of qualitative dependent variables techniques that correct for sample selection bias and those for the analysis of longitudinal data have substantially benefited empirical research in this area new methods that can correct for the biased estimate of the wages particular individuals would receive at 2 or more locations at the same point in time allow researchers to test locational decsion making models estimates of these structural models of labor migration support the hypothesis that individuals respond to income incentives in making the decsion to migrate further research is needed on the pazzling observation that migrant workers earn less than native born workers with similar characteristics during the 1st few years after migration but more thereafter other topics that need further research include the macroeconomic effects of migration the microeconomic and macroeconomic relationships between aging and labor migration and the migration behavior of dual earner families

structural adjustment policies in developing economies this paper examines structural adjustment policies in ldcs defined as policy responses to external or internal shocks that are carried out with the objective of regaining the pre shock growth path the introductory section of the paper reports on policy experience that indicates that countries applying an outward oriented development strategy were better able to cope with external shocks than economies following an inward oriented strategy it is further shown that the adoption of realistic exchange rates and interest rates the avoidance of large budget deficits and the productive use of the proceeds of foreign borrowing eased the process of adjustment the paper examines in detail the elements of a policy package that may be applied in response to external or internal shocks in the case prevalent in developing economies when optimal policies are not applied thus the recommendations simultaneously aim at responding to shocks and undertaking incentives incentives to save and to invest the choice of public investments sectoral policies in energy and agriculture budgetary policies and monetary policies in the conclusions the interdependence of the various policy measures is indicated with further attention given to foreign borrowing

debt arrears in latin america do political variables matter political instability and debt problems characterise latin america in the last two decades this article estimated a logit model of debt arrears including economic as well as political variables our results suggested that both economic and political indicators affected debt repayment in latin america during 1971 86 we also cast a shadow on the viewpoint that authoritarian and military regimes have an advantage over democratically elected governments with regard to debt related issues

external and budget deficits in some developing countries abstract this paper documents and explains the positive comovement between the external and budget deficits of developing countries for which post 1960 time series data are available first the estimates indicate that the empirical covariance between these deficits is always positive and is statistically significant for many cases second the empirical covariance is close to that predicted from a tractable small open economy overlapping generation model with heterogeneous goods capturing the joint behavior of the external and budget deficits also the predicted covariance is induced by shocks which are closely related to internal conditions such as domestic resources and fiscal policies and to a much lesser extent to external conditions such as the world interest rate real exchange rate and terms of trade

the debt crisis structural explanations of country performance abstract this paper develops a cross country statistical model of debt rescheduling and the secondary market valuation of ldc debt which links these variables to key structural characteristics of developing countries such as the trade regime the degree of income inequality and the share of agriculture in gnp our most striking finding is that higher income inequality is a significant predictor of a higher probability of debt rescheduling in a cross section of middle income countries we attribute this correlation to various difficulties of political management in economies with extreme inequality we also find that outward orientation of the trade regime is a significant predictor of a reduced probability of debt rescheduling

early warning of debt rescheduling abstract this study addresses the early warning of debt rescheduling by developing countries the early warning capability of different statistical methods is compared by using the same data base i e 52 countries from 1974 to 1978 the results especially show that cluster analysis techniques don t do well and that multiple discriminant analysis is inferior to logit analysis the integration of qualitative and projected data is proposed in order to arrive at bank specific systems

moving toward markets labor allocation in rural china abstract china s economic reforms have brought rapid growth in rural off farm employment raising questions about the assumption that rural china is labor surplus and has poorly functioning factor markets we investigate this by testing for separability between household labor demand and supply using panel data we find that separability is rejected overall indicating that factor markets remain underdeveloped nonseparability however is associated with labor surplus in some areas and labor shortage in others moreover separability holds where substantial employment opportunities exist in the wider township suggesting that such employment promotes competitive allocation within villages as well as the inter village movement of resources

modeling country default risk as a latent variable a multiple indicators multiple causes mimic approach we study the determinants of country default risk by applying a multiple indicators multiple causes mimic model this accounts for the fact that country default risk is an unobservable variable whereas existing regression based approaches typically use only one of several possible country default risk indicators as the dependent variable the mimic model enables us to consider several indicators at once the simultaneous consideration of sovereign yield spreads and standard and poor s p ratings may help to improve the identification of the latent country default risk our results confirm most of the literature s main findings regarding important determinants of country default risk refute others and provide new evidence to controversial questions

the debt crisis lessons of the 1980s for the 1990s abstract one of the salient characteristics of the 1980s is the growth collapse of the latin american debtor countries the debt overhang literature claims that the debt crisis is the main reason for the growth collapse however previous empirical work has failed to support this hypothesis we re examined this hypothesis further using simulation and econometric methods we found that once we account for the effects of social inequality on government policy and consumption the burden of servicing the debt becomes an important factor in explaining the collapse in investment and output growth in latin america we draw some conclusions for the 1990s

education and off farm work an investigation is presented of the determinants of educational selectivity in a framework that emphasizes the coordination of household members sectoral time allocation is based on members comparative advantage which in turn depends on the utilization and returns to schooling in the farm and nonfarm sectors central to the model is a knowledge spillover hypothesis that workers who participate in off farm work may still contribute knowledge to farm management estimation of the model is based on cross sectional chinese farm household data collected in 1990 from 204 households in sichuan province it is concluded that schooling does not enhance labour productivity when carrying out routine tasks that the contribution to farm efficiency by the most educated members is not affected by their non farm participation and that schooling increases labour market wage rates these empirical results give comparative advantage for the better educated farmers to work off the farm

country balance sheet data vs traditional macro variables in a logit model to predict debt rescheduling abstract this paper presents empirical estimates of rescheduling probabilities for 68 debtor countries using semi annual data from 1981 i through 1988 ii the set of regressors integrates bis data on banks balance sheet positions e g the ratio of short term debt to total debt of developing countries or undisbursed credit commitments to total debt with traditional macro variables e g export growth or gross domestic product of the g7 all estimated equations have a high explanatory power the novel result is that as the prediction lag is lengthened the significance of the macro variables improves relative to the one of the balance sheet data this suggests that macro variables are proxies for more fundamental longer term determinants of a country s solvency whilst financial variables provide information about the country s current liquidity

collective agricultural production a solution for transition economies abstract the paper examines theoretical reasons and provides examples for productivity differences between agricultural service cooperatives and collectives service cooperatives can utilize economies of scale enhance competitiveness and provide technical information advantages that often outweighed problems of free riding low investment and excessive political intervention agricultural collectives while not adding substantial advantages are in addition associated with problems of supervision and effort supply tendencies to substitute casual workers or mechanization for regular members and low investment incentives while collective forms of organization in transition economies respond to high risk and market imperfections they do so inefficiently policies that create conditions for service cooperatives to compete may lead to large productivity gains

emerging carbon constraints for corporate risk management abstract while discussions about global sustainability challenges abound the financial risks that they incur albeit important have received less attention we suggest that corporate risk assessments should include sustainability related aspects especially with relation to the natural environment and encompass the flux of critical materials within a company s value chain such a comprehensive risk assessment takes into account input as well as output related factors with this paper we focus on the flux of carbon and define carbon constraints that emerge due to the disposition of fossil fuels in the input dimension and due to direct and indirect climate change effects in the output dimension we review the literature regarding the financial consequences of carbon constraints on the macroeconomic sector and company level we conclude that a financial consequences seem to be asymmetrically distributed between and within sectors b the individual risk exposure of companies depends on the intensity of and dependency on carbon based materials and energy and c financial markets have only started to incorporate these aspects in their valuations this paper ends with recommendations on how to incorporate our results in an integrated carbon risk management framework