capital inflows financial structure and housing booms we use a panel var to study the effect of shocks to capital inflows which are identified using sign restrictions on the housing market in oecd countries to explore how effects of these shocks change with the structure of the mortgage market and the degree of mortgage securitization we allow the var coefficients to vary with mortgage market characteristics our results indicate that capital inflow shocks have a significant and positive effect on real house prices real credit available to the private sector and real residential investment the responses of these variables are stronger in countries with more developed mortgage markets and in countries where securitization is allowed

the balassa samuelson effect in romania the role of regulated prices abstract due to the balassa samuelson effect the candidate countries to the european monetary union face a possible conflict between the effects of tradable productivity increase on inflation and on the appreciation of the real exchange rate on one hand and the maastricht criteria regarding inflation and exchange rate stability on the other hand a restrictive monetary policy could succeed in reaching inflation criteria but only with the cost of slowing down real convergence this paper deals with the balassa samuelson effect in romania the main conclusion of the paper is that in the period 1998 2006 the average annual rate of inflation generated by the balassa samuelson effect in romania was on average 0 6 in the case of the classical model due to the existence of government regulated prices mostly non tradable goods accounting for as much as 21 of the cpi basket in romania the price of non tradables has increased by less than in the case those prices were market prices if we include these regulated prices in non tradable which is named by us extended model the impact of balassa samuelson on inflation could have been on average 2 46 therefore the balassa samuelson effect is expected to result into higher inflation with future price liberalization for non tradables

bank risk taking securitization supervision and low interest rates evidence from the euro area and the u s lending standards using a unique dataset of the euro area and the u s bank lending standards we find that low monetary policy short term interest rates soften standards for household and corporate loans this softening especially for mortgages is amplified by securitization activity weak supervision for bank capital and low monetary policy rates for an extended period conversely low long term interest rates do not soften lending standards finally countries with softer lending standards before the crisis related to negative taylor rule residuals experienced a worse economic performance afterward these results help shed light on the origins of the crisis and have important policy implications the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

from conventional to unconventional monetary policies the failure of the market maker of last resort this paper analyses the new role of market maker of last resort openly assumed by central banks since the 2008 financial crisis revealed the increasing impact of noninterest income activities on banks balance sheets a brief review of the distinction between conventional and unconventional monetary policies shows that the inflexion point from lender of last resort to market maker of last resort is given by the extension of central bank intervention to other markets than the bank reserves markets herein it is explained how the market maker of last resort role is as counterproductive as its predecessor in putting the economy back on track we show that the main problem of both conventional and unconventional monetary policies is that they distort price signals particularly asset prices in their attempt to reignite economic growth instead of correcting cyclical fluctuations the policies of the market maker of last resort prevent the cyclical divergences between financial and goods sectors from readjusting

entrepreneurship selection and performance a meta analysis of the impact of education in developing economies this meta analytical review of empirical studies of the impact of schooling on entrepreneurship in selection and performance in developing economies looks at variations impact across specific characteristics of the studies a marginal year of schooling in developing economies raises enterprise income by an average of 5 5 percent which is close to the average return in industrial countries the return varies however by gender rural or urban residence and the share of agriculture in the economy furthermore more educated workers typically end up in wage employment and prefer nonfarm entrepreneurship to farming the education effect that separates workers into self employment and wage employment is stronger for women possibly stronger in urban areas and also stronger in the least developed economies where agriculture is more dominant and literacy rates are lower

what determines simultaneous asset bubbles an empirical analysis abstractthe recent global financial crisis demonstrated that the simultaneous collapse of asset bubbles in different countries is a major challenge for monetary policy in order to evaluate determinants of these simultaneous asset bubbles we detect rational asset bubbles in corporate equity and real estate markets worldwide using forward recursive right sided adf tests then we create dummy variables for simultaneous asset bubbles and analyse potential determinants using gravity models and spatial economics our empirical analysis suggests that simultaneous asset bubbles depend positively upon potential asset demand capital account openness monetary conditions cultural similarities and negatively upon informational frictions and exchange rate flexibility these findings imply that monetary policy can impede the probability of simultaneous asset bubbles by ensuring sound monetary conditions and choosing a flexible exchange regime

the economic psychology of stock market bubbles in china the chinese stock markets were extremely volatile during the period 2005 08 the shanghai stock exchange sse composite index increased more than sixfold from 1 012 in 2005 to 6 124 by the end of 2007 it then declined continuously to reach a low of 1 929 on 17 september 2008 or a drop of 70 per cent from its peak in less than 10 months although the market downturn may have been affected by the financial crisis in the united states and the rest of the world the extreme fluctuations of stock prices signify a big market bubble and the burst of that bubble must be explained by intrinsic characteristics or the economic psychology of chinese investors based on a detailed market data analysis this paper attributes the development of the stock market bubble to three key psychological factors greed envy and speculation and the burst of the bubble to three contrasting factors fear lack of confidence and disappointment it concludes that only after chinese companies become really commercialised and profitable and investors become rational can the stock markets become stable without extreme volatility as seen in the past government policies can play a role in soothing market volatility detrimental to shareholders and the wider economy but investors should not depend on government for making their own investment decisions journal compilation 2009 blackwell publishing ltd

zero interest rate policy and unintended consequences in emerging markets since 2009 central banks in the major advanced economies have held interest rates at very low levels to stabilise financial markets and support the recovery of their economies this paper outlines the unintended consequences of the prolonged period of very low world funding interest rates in emerging markets the paper is informed by a mises hayek bis view on credit booms and mises law of unintended consequences consistent with the presented credit boom view i provide evidence that the very low world funding interest rates are associated with a rise in volatile capital flows and asset market bubbles in fast growing emerging markets in line with mises law i further show that these unintended consequences give rise to a new wave of interventionism as policymakers in emerging markets increasingly reintroduce financially repressive measures to isolate the economies from foreign capital inflows

the return to schooling in structural dynamic models a survey this papers contains a survey of the recent literature devoted to the returns to schooling within a dynamic structural framework i present a historical perspective on the evolution of the literature from early static models set in a selectivity framework willis and rosen 1979 to the recent literature stimulated by keane and wolpin 1997 and which uses stochastic dynamic programming techniques after reviewing the literature thoroughly i compare the structural approach with the iv experimental approach i present their commonalities and i also discuss their fundamental di8erences to get an order of magnitude most structural estimates reported for the us range between 4 and 7 per year on the other hand iv estimates between 10 and 15 per year are often reported the discrepancy prevails even when comparable if not identical data sets are used the discussion is focussed on understanding this divergence the distinction between static and dynamic model specifications is a recurrent theme in the analysis i argue that the distinction between the iv approach and the structural approach may be coined in terms of a trade o8 between behavioral and statistical assumptions for this reason and unless one has very specific knowledge of the true data generating process it is neither possible nor sensible to claim which approach to estimation is more flexible more precisely i show that structural and iv approaches differ mainly at the level of i the compatibility of the underlying models with truly dynamic behavior ii the role of heterogeneity in ability and tastes iii the consideration of post schooling opportunities and iv the specification and interpretation of the mincer wage equation

fiscal stimulus agricultural growth and poverty in asia recent debates on a sustainable recovery of the global economy have tended to overemphasise the savings glut hypothesis and the unavoidable imperative of higher consumption in china and other emerging asian countries that oversaving and not underinvestment is coming in the way of a quicker and more durable recovery is not just simplistic but misleading from a medium term growth perspective for emerging asian countries and other developing countries in this region drawing upon country panel data for developing countries and a subsample of asian countries during the period 1991 2007 this study makes a case for a bold and coordinated fiscal stimulus directed to stimulating agricultural and overall growth and mitigation of poverty and hunger our simulations further suggest that poverty reduction is likely to be larger if the fiscal stimulus is directed to social spending in health and education sectors indeed if our simulations of fiscal impacts have any validity the dire predictions of millions getting trapped in poverty and hunger may turn out to be exaggerated the prospects of a strong recovery led by fiscal stimulus are thus real and achievable

implications for gaap from an analysis of positive research in accounting based on extant literature we review the positive theory of gaap the theory predicts that gaap s principal focus is on control performance measurement and stewardship and that verifiability and conservatism are critical features of a gaap shaped by market forces we recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets but caution against expanding fair values to financial reporting more generally we conclude that rather than converging u s gaap with ifrs competition between the fasb and the iasb would allow gaap to better respond to market forces

education and entrepreneurial success this paper estimates the effect of education on the success of entrepreneurial activity using survey data from malawi an instrument variable approach is used to address the endogeneity of education we find a significant and substantial effect of an added year of primary education on entrepreneurial profitability this is consistent with theoretical arguments that primary schooling provides a generalised form of competence that underpins the variety of skills an entrepreneur needs to succeed in business results are robust to non random selection into entrepreneurship

fiscal stimulus and the role of wage rigidity abstract in this paper we study the impact of an expansion in public spending in an economy characterized by limited asset market participation and sticky wages the flexible wage version of the model implies strong expansionary effects on output and consumption but also a counterfactual increase in real wages the introduction of sticky wages besides being a realistic addition solves this problem and preserves the expansionary effects on output and consumption moreover once we introduce segmentation in the labor market sticky wages are even essential to obtain expansionary effects

stock interest rate risk and inflation shocks abstract in this paper we proceed to estimate a measure of the flow through capability of the firms listed on the spanish stock exchange the flow through capability is defined as the ability of firms to transmit inflation shocks to the prices of the products and services sold by the company according to a strand of the literature this flow through capability can to some extent explain the so called stock duration paradox which is the difference between the theoretical stock duration derived from the ddm model and its empirical estimates the line of reasoning suggests that if a company can pass on inflation shocks to the prices of its own outputs and then to profits and dividends nominal interest rate changes due to variations in the expected inflation will have a limited impact on stock prices so in this paper we first estimate the flow through capability for different industries and find great differences among them then we analyse the link between flow through capability and stock duration and find a significant negative relationship between them as claimed by part of the literature

pitfalls of forward looking monetary policy a distinctive feature of the procedures recently adopted by inflation targeting central banks is their forward looking character forecasts of the economy s future evolution conditional upon alternative policies play a central role in the banks deliberations to an extent that the procedures adopted are sometimes characterized as forecast targeting this emphasis upon the future consequences of policy is unsurprising in an approach that tries to maintain as transparent as possible a relation between the banks9 decisions and the ultimate goals of monetary policy after all current decisions can still affect the future but not the past nonetheless common descriptions of how inflation targeting is or should be practiced go too far in proposing purely forward looking procedures i shall argue instead that an optimal framework for the conduct of monetary policy must generally be history dependent in ways

fractionalization entrepreneurship and the institutional environment for entrepreneurship the vast majority of the literature on ethnicity and entrepreneurship focuses on the construct of ethnic entrepreneurship however very little is known about how ethnic heterogeneity affects entrepreneurship and the institutional arrangements affecting entrepreneurship this study attempts to fill the gap and thus examines the effect of ethnic heterogeneity on various outcomes associated with entrepreneurship and the institutional environment for entrepreneurship using indices of ethnic and linguistic fractionalization we show that ethnic heterogeneity negatively influences entrepreneurship we argue that potential channels that can explain the negative effect of fractionalization on entrepreneurship include trust social network and innovation among others this study provides a new perspective on the existing debate that seeks to understand why the levels of entrepreneurial success vary across countries

an assessment of tarp assistance to financial institutions six years after the passage of the 2008 troubled asset relief program commonly known as tarp it remains hard to measure the total social costs and benefits of the assistance to banks provided under tarp programs tarp was not a single approach to assisting weak banks but rather a variety of changing solutions to a set of evolving problems tarp s passage was associated with significant improvements in financial markets and the health of financial intermediaries as well as an increase in the supply of lending by recipients however a full evaluation must also take into account other factors including the risks borne by taxpayers in the course of the bailouts moral hazard costs that could result in more risk taking in the future and social costs related to perceived unfairness our evaluation is organized in five parts 1 what did policymakers do 2 what are the proper objectives of interventions like tarp assistance to financial institutions 3 did tarp succeed in those economic objectives 4 were tarp funds allocated purely on an economic basis or did political favoritism play a role 5 would alternative policies either alongside or instead of tarp and alternative design features of tarp have worked better

intrafirm trade arm s length transfer pricing rule and coordination failure abstract this paper demonstrates that uniform imposition of the arm s length principle on transfer pricing leads to coordination failure among countries in terms of economic welfare if the countries trade products in the form of intrafirm transactions by multinational firms mnfs to highlight this implication we first show that imposition of the arm s length principle on an mnf induces it to transfer a product among subordinate divisions at marginal cost i e the competitive price which is consistent with the purpose of the principle nonetheless if regulators in each country impose the principle on mnfs all of the following economic welfare measures decrease compared with the situation where the principle is not imposed 1 consumer welfare in each of the trading countries 2 profit of each mnf and thus 3 total world economic welfare this result indicates that it is possible that enforcement of the principle has no positive effect at all in the world because economic welfare of all economic agents deteriorates when the principle is imposed a numerical analysis demonstrates that this possibility arises in a broad range of circumstances even including the situation where a giant economic world power and a small underdeveloped country mutually trade products in these circumstances an agreement among trading countries that no country imposes the arm s length principle may encourage pareto improvement of the world economy

fiscal policy in an expectations driven liquidity trap we study the effects of fiscal policy interventions in a liquidity trap in a model with nominal rigidities and an interest rate rule in a liquidity trap caused by a self fulfilling state of low confidence higher government spending has deflationary effects that reduce the spending multiplier when the zero lower bound is binding instead cuts in marginal labor tax rates are inflationary and become more expansionary when the zero lower bound is binding these findings contradict popular views about the effects of fiscal policy in a liquidity trap

the failure of stabilization policy balanced budget fiscal rules in the presence of incompressible public expenditures abstract we consider an infinite horizon neoclassical model with a government that i balances its budget at each point in time ii faces unavoidable incompressible public expenditures and iii further uses a fiscal rule for the share of variable government spending in output with the purpose of stabilizing the economy we show that insulating this economy from belief driven fluctuations is not possible if the government finances these two components of public spending using a distortionary proportional income tax in this case we always have steady state multiplicity two steady states and global indeterminacy while local indeterminacy is also possible more precisely even if a sufficiently procyclical share of the variable government spending component in output is still able to eliminate local indeterminacy two saddle steady states prevail so that depending on expectations the economy may either converge to the low steady state or to the high steady state this implies that a regime switching rational expectation equilibrium where the economy switches between paths converging to the two different steady states easily arises as expectations influence long run outcomes our model is able to generate large and sudden expansions and contractions in response to expectation shocks

distinguished lecture on economics in government exchange rate regimes is the bipolar view correct the choice of appropriate exchange rate regime which for economies with access to international capital markets increasingly means a move away from the middle ground of pegged but adjustable fixed exchange rates towards the two corner regimes of either flexible exchange rates or a fixed exchange rate supported if necessary by a commitment to give up altogether an independent monetary policy lawrence h summers 2000 p 8

foreign exchange intervention in emerging markets a survey of empirical studies nowadays foreign exchange interventions occur in emerging market economies whereas empirical studies on interventions mainly refer to advanced economies however interventions in emerging markets are different from those in advanced economies they occur regularly and central banks have considerable leverage derived from relatively high reserves some non sterilisation the central bank s information advantage and capital controls consequently these interventions often successfully impact the level and volatility of exchange rates nevertheless more research on interventions in emerging markets is needed analysing the influence of heterogeneous institutional circumstances examining the role of central bank communication and using high frequency data

inflation targeting a new framework for monetary policy he world s central bankers and their staffs meet regularly in venues from basle to washington to share ideas and discuss common problems perhaps these frequent meetings help explain why changes in the tactics and strategy of monetary policymaking such as the adoption of money growth targets in the 1970s the intensification of efforts to reduce inflation in the 1980s and the recent push for increased institutional independence for central banks tend to occur in many countries more or less simultaneously whatever their source major changes in the theory and practice of central banking are of great importance for both individual countries and the international economy in this article we discuss a new strategy for monetary policy known as inflation targeting which has sparked much interest and debate among central bankers and monetary economists in recent years this approach is characterized as the name suggests by the announcement of official target ranges for the inflation rate at one or more horizons and by explicit acknowledgment that low and stable inflation is the overriding goal of monetary policy other important features of inflation targeting include increased communication with the public about the plans and objectives of the monetary policymakers and in many cases increased accountability of the central bank

the credit crisis conjectures about causes and remedies what caused the financial crisis that is sweeping across the world what keeps asset prices and lending depressed what can be done to remedy matters while it is too early to arrive at definite answers to these questions it is certainly time to offer informed conjectures and these are the focus of this paper this abstract was borrowed from another version of this item

dynamic debt runs we develop a dynamic model of debt runs on a rm which invests in an illiquid asset by rolling over staggered short term debt contracts i e dierent contracts mature at dierent times we derive a unique threshold equilibrium in which creditors coordinate their asynchronous rollover decisions based on the rm s publicly observable and time varying fundamental the coordination problem ampli es the creditors concerns about the rm s future rollover risk created by its time varying fundamental and causes each maturing creditor to run ahead of others even when the current fundamental is substantially higher than its liability our model provides a set of implications on the roles played by volatility illiquidity and debt maturity in driving debt runs as well as on rms capital adequacy standards and credit risk

the returns to education microeconomics in this paper we focus on education as a private decision to invest in human capital and the estimation of the rate of return to that private investment while the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is obtained as the coefficient on a years of education variable in a log wage equation that contains controls for work experience and other individual characteristics the issue is surrounded with difficulties we outline the theoretical arguments underpinning the empirical developments and show that the evidence on private returns to the individual is compelling despite some of these issues surrounding the estimation of the return to schooling our evidence based on estimates from a variety of datasets and specifications is that there is an unambiguously positive effect on the earnings of an individual from participation in education moreover the size of the effect seems large relative to the returns on other investments

china and its dollar exchange rate a worldwide stabilising influence 1 we argue that criticism concerning the chinese dollar peg is misplaced as no predictable link exists between the exchange rate and the trade balance of an international creditor economy the stable nominal yuan dollar rate is argued to have stabilized chinese east asian and global growth however linked to us low interest rates chinese sterilization policies and potentially subsidized capital allocation in china the real yuan dollar rate is undervalued this has caused both in china and the united states structural distortions and threatens to undermine global growth and stability we propose sino american policy coordination to escape from the policy dilemma which continues to drive global imbalances jel code f150 f310 f330

rethinking the role of fiscal policy as recently as two years ago there was a widespread consensus among economists that fiscal policy is not useful as a countercyclical instrument now governments in washington and around the world are developing massive fiscal stimulus packages supported by a wide range of economists in universities governments and businesses why has this change occurred what are the principles for designing a potentially useful fiscal stimulus and what will happen if the current fiscal stimulus fails this abstract was borrowed from another version of this item

evaluation of the soft measures effects on ambient water quality improvement and household and industry economies abstract various ecological footprint calculators carbon footprint calculators and water footprint calculators have been developed in recent years the basic concepts of ecological behaviour record notebooks and of carbon dioxide emission calculators have been developed since the late 20th century the first carbon dioxide emission calculator was developed in 1991 likewise water pollutant discharge calculators have been developed to estimate the effects of soft measures introduced into households to reduce pollutant discharge since 2004 the soft measures which have been developed in japan may consist of a wider framework household sustainable consumption which has been developed in europe and can be referred to cleaner consumption in this research summarisation of the short history of ecological behaviour record notebooks and ecological footprint calculators in japan since the 1980s was conducted and the soft measures in households to reduce pollutant discharge were evaluated for their effects on ambient water quality improvement as well as household and industry economies effects of the soft measures on related industry economies were investigated using an input output table analysis and the effects of the imported goods were evaluated with an import effect matrix which was developed in this research the effects of the soft measures on household expenditures were estimated to be a decrease by 2 5 or usd 285 person 1 year 1 in 2003 2006 the results show that the soft measures positively affect the chemical fibre industry and significantly affect the detergent industry analysis of the import effect matrix proved that the six industries were tightly related through extensive amounts of imported goods the soft measures in households may lead to household sustainable consumption and thus reduce disadvantageous human impacts on water environments the effects of the measures introduced to improve the environment should be qualitatively and quantitatively evaluated to avoid redundant concerns and discord between the environment and the economy which may be worried when the relationship is not well understood

global banks and crisis transmission abstract we study the effect of financial integration through banks on the transmission of international business cycles in a sample of 18 20 developed countries between 1978 and 2009 we find that in periods without financial crises increases in bilateral banking linkages are associated with more divergent output cycles this relation is significantly weaker during financial turmoil periods suggesting that financial crises induce co movement among more financially integrated countries we also show that countries with stronger direct and indirect financial ties to the u s experienced more synchronized cycles with the u s during the recent 2007 2009 crisis we then interpret these findings using a simple general equilibrium model of international business cycles with banks and shocks to banking activity the model suggests that the relation between integration and synchronization depends on the type of shocks hitting the world economy and that shocks to global banks played an important role in triggering and spreading the 2007 2009 crisis

the returns to education in africa some new estimates abstractwe estimate the rate of return to education for 12 african countries using recent data and a range of methodologies which we apply consistently across all countries our findings confirm that the return to basic education is the lowest 7 10 the returns to upper secondary and tertiary education are similar to one another 25 30 accounting for the risk of joblessness increases these rates of return particularly for basic education and for women at tertiary level our results at the country level suggest that great care should be taken in choosing the appropriate methodology to estimate rates of return

monetary policy inequality and political instability voters in the industrialised countries are increasingly expressing dissatisfaction by dissenting from the established political parties and candidates based on the concepts of justice by hayek rawls and buchanan we argue that the growing dissatisfaction is rooted in the asymmetric pattern of monetary policies since the mid 1980s for two reasons first the structurally declining interest rates and the unconventional monetary policy measures have granted privileges to specific groups second the increasingly expansionary monetary policies have negative growth effects which have reduced the scope for compensation of the ones excluded from the privileges as a result the acceptance of the prevailing economic and political order is undermined and political instability increases

on economic theory and recovery of the financial crisis this paper presents a new economic theory to explain the evolution of a financial crisis and why a major crisis may take a long time to recover it suggests that asymmetric psychological reactions of market players to gains and losses are the principal cause of a crisis and responsible for prolonging recovery three different shapes of recovery v u and l are defined and explained during the current financial crisis some countries such as china and india may have a v shaped recovery others such as the uk and the us may have a u shaped recovery an important policy implication is that effective macroeconomic policies should be designed to smooth market movements and implementation of such policies has to be countercyclical rather than pro cyclical

liquidity shortages and banking crises we show in this article that bank failures can be contagious unlike earlier work where contagion stems from depositor panics or contractual links between banks we argue that bank failures can shrink the common pool of liquidity creating or exacerbating aggregate liquidity shortages this could lead to a contagion of failures and a total meltdown of the system given the costs of a meltdown there is a possible role for government intervention unfortunately liquidity and solvency problems interact and can cause each other making it hard to determine the cause of a crisis we propose a robust sequence of intervention banks are often found at the center of systemic financial crises the causes of these crises have long been debated do they stem from depositor panics or do they arise because bank balance sheets are exposed to common factors if it is the latter then is there any sense in which bank failures can be contagious can anything be done to prevent these crises or stop them from propagating once they begin our purpose in this paper is to reexamine whether bank failures can start and propagate systemic crises even if we assume that depositors do not panic that is even if depositors actions are coordinated and they do not run simply because they fear others will run our focus is not because we think that panics are empirically unimportant the jury is still out on that instead we show that contagion can stem from an underlying real general equilibrium problem rather than just from lack of coordination among depositors from a policy perspective attempts to reassure investors through confidence building measures will not work if panic and lack of coordination are not the reasons for a crisis we begin in this paper with a model of a bank that we developed in diamond and rajan 2001 assets in this model are illiquid they cannot be borrowed against or sold for the full value of resources they will generate in their best use because the human capital necessary to generate that full value cannot

monetary policy vagabonding liquidity and bursting bubbles in new and emerging markets an overinvestment view credit booms have globally fuelled hikes in stock raw material and real estate markets which have culminated in the recent us subprime market crisis we explain the global asset market booms since the mid 1980s based on the overinvestment theories of hayek wicksell and schumpeter we argue that ample liquidity supply originating in the large industrialized countries has contributed to overinvestment cycles in japan east asia new markets in the industrial countries and many emerging market economies expansionary monetary policies in response to the burst of bubbles are argued to have contributed to vagabonding bubbles around the globe

green gold burley tobacco smallholder agriculture and poverty alleviation in malawi abstract the abolition in 1990 of the estate monopoly on cultivation of burley tobacco is expected to play an important role in reducing poverty among smallholders in malawi a nationwide survey in 1993 shows that smallholder households cultivating burley also grow more hybrid maize use more fertilizer and are more food secure but resource poor households particularly those headed by women face land and labor constraints on burley adoption burley and hybrid maize increase the demand for hired labor but not enough to absorb the growth in the rural labor force broad based poverty alleviation requires technology and programs targeted at the majority of smallholders with holdings of 0 5 hectares or less

the role of automatic stabilizers in the u s business cycle most countries have automatic rules in their tax and transfer systems that are partly intended to stabilize economic uctuations this paper measures how eective they are at lowering the volatility of u s economic activity we identify seven potential stabilizers in the data and include four theoretical channels through which they may operate in a business cycle model calibrated to the u s data the model is used to compare the volatility of output in the data with counterfactuals where some or all of the stabilizers are shut down our rst nding is that proportional taxes like sales property and corporate income taxes contribute little to stabilization our second

a vicious cycle of manias crashes and asymmetric policy responses an overinvestment view the business cycles theories of wicksell 1898 schumpeter 1912 mises 1912 hayek 1929 1935 and minsky 1986 1992 explain business cycles by distorted prices on capital markets buoyant credit expansion and overinvestment the exuberance during the boom endogenously causes the subsequent slump while these theories put the emphasis on explaining the emergence of the cycle this paper focuses on the macroeconomic policy responses during and after the crisis when panic tightens credit supply the paper allows an assessment of the long term consequences of an asymmetric monetary and fiscal policy response to financial crisis