the distance effect in banking and trade abstract the empirical gravity literature finds geographical distance to be a large and growing obstacle to trade contradicting the popular notion that globalization heralds the end of geography this distance puzzle disappears however when measuring the effect of cross border distance relative to that of domestic distance yotov 2012 we uncover the same result for banking when comparing cross border positions with domestic credit using the most extensive dataset on global bank linkages between countries the role of distance remains substantial for trade as well as for banking where transport cost is immaterial pointing to the role of information frictions as a common driver a second contribution is to show that the forces of globalization are also evident in other less prominent parts of the gravity framework

more mortgages lower growth in newly collected data on 46 economies over 1990 2011 we show that financial development since 1990 was mostly due to growth in credit to real estate and other asset markets which has a negative growth coefficient we also distinguish between growth effects of stocks and flows of credit we find positive growth effects for credit flows to nonfinancial business but not for mortgage and other asset market credit flows by accounting for the composition of credit stocks and for the effect of credit flows we explain the insignificant or negative growth effects of financial development in recent times what was true in the 1960s 1970s and 1980s when the field of empirical credit growth studies blossomed is no longer true in the 1990s and 2000s new bank lending is not primarily to nonfinancial business and financial development may no longer be good for growth these trends predate the 2008 crisis they prompt a rethink of the role of banks in the process of economic growth jel e44 o16 o40 c33

international bank lending channel of monetary policy abstract how does domestic monetary policy in systemic countries spillover to the rest of the world this paper examines the transmission channel of domestic monetary policy in the cross border context we use exogenous shocks to monetary policy in systemically important economies including the u s and local projections to estimate the dynamic effect of monetary policy shocks on bilateral cross border bank lending we find robust evidence that an increase in funding costs following an exogenous monetary tightening leads to a statistically and economically significant decline in cross border bank lending the effect is weakened during periods of high uncertainty in contrast the effect is found to not vary according to the degree of borrower country riskiness further weakening support for the international portfolio rebalancing channel

debt deleveraging and the liquidity trap a fisher minsky koo approach in this paper we present a simple new keynesian style model of debt driven slumps that is situations in which an overhang of debt on the part of some agents who are forced into rapid deleveraging is depressing aggregate demand making some agents debt constrained is a surprisingly powerful assumption fisherian debt deflation the possibility of a liquidity trap the paradox of thrift a keynesiantype multiplier and a rationale for expansionary fiscal policy all emerge naturally from the model we argue that this approach sheds considerable light both on current economic difficulties and on historical episodes including japan s lost decade now in its 18th year and the great depression itself

a qualitative dynamical modelling approach to capital accumulation in unregulated fisheries capital accumulation has been a major issue in fisheries economics over the last two decades whereby the interaction of the fish and capital stocks were of particular interest because bio economic systems are intrinsically complex previous efforts in this field have relied on a variety of simplifying assumptions the model presented here relaxes some of these simplifications problems of tractability are surmounted by using the methodology of qualitative differential equations qde the theory of qdes takes into account that scientific knowledge about particular fisheries is usually limited and facilitates an analysis of the global dynamics of systems with more than two ordinary differential equations the model is able to trace the evolution of capital and fish stock in good agreement with observed patterns and shows that over capitalization is unavoidable in unregulated fisheries r 2005 elsevier b v all rights reserved

the impact of risk regulation on price dynamics most financial risk regulations assume that asset returns are exogenous where risk is estimated from historical data this assumption fails to take into account the feedback effect of trading decisions on prices we investigate the consequences of risk constrained trading by means of simulations of a general equilibrium model with a value at risk constraint and compare the results to the case when risk constraints are not present prices are lower on average in the presence of risk regulation while volatility is higher risk regulation may have the perverse effect of exacerbating price fluctuations

distance constraints the limits of foreign lending in poor economies how far does mobility of multinational banks solve problems of financial development using a panel of 80 000 loans over 7 years i show that greater cultural and geographical distance between a foreign bank s headquarters and local branches leads it to further avoid lending to informationally difficult yet fundamentally sound firms requiring relational contracting greater distance also makes them less likely to bilaterally renegotiate and less successful at recovering defaults differences in bank size legal institutions risk preferences or unobserved borrower heterogeneity cannot explain these results these distance constraints can be large enough to permanently exclude certain sectors of the economy from financing by foreign banks

the currency dimension of the bank lending channel in international monetary transmission abstract we investigate how the use of a currency transmits monetary policy changes in the global banking system we use a newly available rarely accessed dataset on the bilateral cross border lending flows of 27 bis reporting lending banking systems to borrowers in 51 countries broken down by currency denomination usd eur and jpy we have three main findings first we identify a currency dimension of the international bank lending channel monetary changes in a currency significantly affect cross border lending flows in that currency even when neither the lending banking system nor the target country uses that currency as their own second this transmission works mainly through lending to non banks third the currency dimension of the bank lending channel works similarly across the three currencies suggesting that the usd may not be unique in this respect

modeling agricultural growth multipliers agriculture s potential as an engine of third world growth depends in large part on the size of the production and consumption linkages it stimulates in rural regions current estimates of agricultural growth multipliers within rural regions vary widely not only because economic structures differ across regions but also because the array of fixed price models most commonly used embody widely differing basic assumptions among fixed price models the semi input output formulation projects the most plausible multipliers but even they overstate the magnitude of growth multipliers by 10 to 25 according to the price endogenous model developed here

zombie lending and depressed restructuring in japan this paper explores the role that misdirected bank lending played in prolonging the japanese macroeconomic stagnation that began in the early 1990s the investigation focuses on the wide spread practice of japanese banks of continuing to lend to otherwise insolvent firms we docu ment the prevalence of this forbearance lending and show its distorting effects on healthy firms that were competing with the impaired firms the paper by hoshi 2000 was the first to call attention to this phenomenon and its ramifi

leverage and the central banker s put among the many unusual aspects of the ongoing financial crisis is the unprecedented provision of backstop liquidity by central banks around the world the federal reserve alone had committed 4 400 billion by mid novem ber 2008 the fed funds rate is almost equal to zero these are extraordinary numbers this paper establishes a formal relationship between the recent monetary developments and the trends in private leverage and its structure over the last few years some traditional insti tutions for example broker dealers have relied more and more on markets securitization money market for their funding some banks have also increased their dependence on mar kets the standard illustration is northern rock a uk mortgage bank which prior to its bailout relied on short term wholesale markets for 75 percent of its funding a second factor contributing to the reliance on wholesale markets is the overall shift from a bank based system to a market based one the expanding so called shadow banking system conduits hedge funds investment banks monolines has engaged in substantial transfor mation and unlike commercial banks could not avail itself of stable insured deposits mutual funds are under the threat of redemptions and may well face liquidity shortages as well adding subprime borrowers who are heavily dependent on high housing prices and for those with adjustable rate mortgages arms on low short term interest rates and highly lever

the international transmission of monetary policy abstract this paper presents the novel results from an internationally coordinated project by the international banking research network ibrn on the cross border transmission of conventional and unconventional monetary policy through banks teams from seventeen countries use confidential micro banking data for the years 2000 through 2015 to explore the international transmission of monetary policies of the united states euro area japan and united kingdom two other studies use international data with different degrees of granularity international spillovers into lending to the private sector do occur especially for us policies and bank specific heterogeneity influences the magnitudes of transmission the effects are supportive of the international bank lending channel and the portfolio channel of monetary policy transmission they also show that the frictions that banks face matter in particular foreign currency funding and hedging considerations can be a key source of heterogeneity the forms of bank balance sheet heterogeneity that differentiate spillovers across banks are not uniform across countries international spillovers into lending can be large for some banks even while the average international spillovers of policies into nonbank lending generally are not large

money in a theory of banking we introduce money in a model of banking in order to examine how open market operations can affect aggregate bank lending and output we see two important ways changes in money supply affect the banking system first by changing prices and interest rates it affects the wealth of demanders of real liquidity and thus the equilibrium production of liquid assets aggregate output and the health of the banking system second it changes the value of money as a means of payment and thus the attractiveness of moving from deposits to currency the demand for financial liquidity again this impacts the health of the banking system and thus bank lending and aggregate output we use this understanding to see how changes in money supply can create alleviate or be ineffective in banking crises

sudden stops and phoenix miracles in emerging markets a decade has passed since the salvos from mexico s tequila crisis of 1994 1995 echoed around the financial world since then many more crises have taken place in emerging market economies ems furthermore crises have tended to bunch together bringing to the forefront the systemic nature of these events true every new crisis has its own idiosyncratic features but useful policy lessons must be derived from robust empirical regularities this is the research strategy we have pursued in the last few years we will report on two types of regularities that strike us as highly robust across em crises a sudden stops of capital inflows and b phoenix miracles a sudden stop is a sharp fall in capital inflows relative to their past trajectory sudden stops are not a common feature in developed economies and display a large degree of temporal bunching suggesting that global capital market turmoil acts as a coordinating factor external to ems as shown in section i however balance sheet effects namely the interaction of large changes in the real exchange rate during sudden stops and liability dollarization i e foreign exchange denominated debts are key in influencing the likelihood of a sudden stop thus even though the initial shock is in principle exogenous to the economy whether or not it materializes into a sudden stop depends on domestic financial vulnerabilities on the other hand a phoenix miracle is defined as a case in which output recovers relatively quickly from a sharp collapse with virtually no recovery in credit or capital inflows and a very weak recovery in investment hence the reference to the mythical bird rising from the ashes the existence of phoenix like recoveries suggests that financial frictions play a key role in pushing economies to the abyss from which in some way or another they can crawl back to safe ground by means less than apparent to the conventional observer looking for standard fundamentals and thus may appear miraculous interestingly the great depression of the 1930s shares some of the key features of phoenix miracles in ems but shows salient differences as well that suggest nominal labor market rigidities are not crucial in explaining output collapse in ems understanding these regularities could and we believe does shed light on policies aimed at preventing crises and attenuating their effects

transmission of monetary policy through global banks whose policy matters abstract this paper explores the basic question of whose monetary policy matters for banks international lending in the international context monetary policies from several countries could come into play the lender s the borrower s and that of a third country the issuer of the currency in which cross border lending is denominated using the rich dimensionality of the bis international banking statistics we find significant effects for all three policies us monetary easing fuels cross border lending in us dollars as befits a global funding currency at the same time a tightening in the lender or the borrower country reinforces international dollar lending as global banks turn to the greenback for cheaper funding and toward borrowers abroad our results also show that stronger capitalization and better access to funding sources mitigate the frictions underpinning the transmission channels analogous results for euro denominated lending confirm that global funding currencies play a key role in international monetary policy transmission

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

monetary analysis the equilibrium method and keynes s general theory compared with the work of his contemporaries keynes s general theory represented a radical change in theoretical method from sequence analysis to the method of equilibrium the nature of this change is discussed together with its implications for the substance of keynes s message and for the subsequent development of macroeconomics

good bye financial repression hello financial crash some unintended consequences of financial liberalization in latin america are analyzed in this paper intrinsic imperfectious in financial markets and the policy dilemmas they pose are reviewed first the stylized facts of southern cone experiments in financial liberization are then presented alternative ways of organlzing domestic capital markets under latin american conditions are discussed and an eclectic reform mongering program is proposed

liquidity management of u s global banks internal capital markets in the great recession abstract the recent crisis highlighted the importance of globally active banks in linking markets one channel for this linkage is through how these banks manage liquidity across their entire banking organization we document that funds regularly flow between parent banks and their affiliates in diverse foreign markets we show that parent banks when hit by a funding shock reallocate liquidity in the organization according to a locational pecking order affiliate locations that are important for the parent bank revenue streams are relatively protected from liquidity reallocations in the organization while traditional funding locations are more extensively used to buffer shocks to the parent bank balance sheets

spiders and snakes offshoring and agglomeration in the global economy abstract global production sharing is determined by international cost differences and frictions related to the costs of unbundling stages spatially the interaction between these forces depends on engineering details of the production process with two extremes being snakes and spiders snakes are processes whose sequencing is dictated by engineering spiders involve the assembly of parts in no particular order this paper studies spatial unbundling as frictions fall showing that outcomes are very different for snakes and spiders even if they share some features both snakes and spiders have in common a property that lower frictions produce discontinuous location changes and overshooting parts may move against their comparative costs because of proximity benefits and further reductions in frictions lead these parts to be reshored predictions for trade volumes and the number of fragmented stages are quite different in the two cases for spiders a part crosses borders at most twice the value of trade increases monotonically as frictions fall except when the assembler relocates and the direction of parts trade is reversed for snakes the volume of trade and number of endogenously determined stages is bounded only by the fragmentation of the underlying engineering process and lower frictions monotonically increase trade volumes

the financial cycle and macroeconomics what have we learnt abstract it is high time we rediscovered the role of the financial cycle in macroeconomics in the environment that has prevailed for at least three decades now it is not possible to understand business fluctuations and the corresponding analytical and policy challenges without understanding the financial cycle this calls for a rethink of modelling strategies and for significant adjustments to macroeconomic policies this essay highlights the stylised empirical features of the financial cycle conjectures as to what it may take to model it satisfactorily and considers its policy implications in the discussion of policy the essay pays special attention to the bust phase which is less well explored and raises much more controversial issues

fisheries management with stock growth uncertainty and costly capital adjustment we develop a dynamic model of a fishery which simultaneously incorporates random stock growth and costly capital adjustment numerical techniques are used to solve for the resource rent maximizing harvest and capital investment policies capital rigidities bring diminishing marginal returns to the current period harvest and introduce an incentive to smooth the catch over time with density dependent stock growth however catch smoothing increases stock variability resulting in reduced average yields the optimal management policy balances the catch smoothing benefits against yield loss we calibrate the model to the alaskan pacific halibut fishery to demonstrate the main insights

the dynamics of micro and small enterprises in developing countries abstract the number of people engaged in micro and small enterprises increases as a result of new enterprises being started and through an expansion of existing activities as a partial offset to these increases employment declines when existing businesses cease operations this article draws on recent survey work to examine the magnitude and determinants of enterprise births closures and expansions it explores the ways in which these different sources of change are influenced by the state of the macroeconomy and examines policy and project implications

adaptation to land constraints is africa different since the seminal works of malthus and boserup scientists have long debated the impact of population growth and land constraints on the wellbeing of rural people today these concerns are particularly relevant to africa with its rapid population growth very small farms and chronic food insecurity in this paper we examine adaptation to falling land labor ratios using a comprehensive theoretical framework in which households faced with binding land constraints can respond in three ways intensifying agricultural production diversifying out of agriculture and reducing fertility rates using cross country data and drawing upon the existing literature we reach three conclusions first population density is associated with reduced fallows and more intensive use of land but not fertilizer use or irrigation indicating major challenges in achieving sustainable intensification or agricultural productivity growth second there is little evidence of successful non farm diversification in response to land pressures in africa from domestic or international income sources third rural africans in land constrained countries desire smaller families but have thus far benefited little from family planning policies these findings underscore the need for a coordinated multi sectoral approach to sustainably reduce poverty in the region

time zone differences as trade barriers this paper estimates the impact of time zone differences between trading locations on trade costs and trade in general equilibrium using homogeneous bilateral trade data between us states and canadian provinces time zone differences are found to reduce bilateral trade by 11 on average which amounts to about one sixth of the international border effect between the us and canada

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

history gravity and international finance abstract we analyse patterns of bilateral financial investment using data on us holdings of foreign bonds we document a history effect in which holdings seven decades ago continue to influence holdings today 10 15 of the cross country variation in us investors foreign bond holdings is explained by holdings 70 years ago plausibly reflecting fixed costs of market entry and exit and endogenous learning this effect is twice as large for bonds denominated in currencies other than the dollar suggesting the existence of even higher fixed costs of initiating us foreign investment in such currencies our findings point to history and path dependence as key sources of financial market segmentation

a generalized design for bilateral trade flow models abstract this paper suggests a full interaction effects design to analyze bilateral trade flows this is illustrated with an unbalanced panel of bilateral trade between the triad eu15 usa and japan economies and their 57 most important trading partners over the period 1986 1997 our full interaction model finds empirical support for the new trade theory and linder s hypothesis we show that the omission of one or more interaction effects can result in biased estimates and misleading inference

gravity in international finance abstract the past decade has witnessed an explosion of papers estimating gravity equations for cross border financial holdings without much of a theoretical foundation in this paper we develop a theory for bilateral asset holdings that takes a gravity form we discuss how to estimate international financial frictions and conduct comparative statics analysis within the context of the theory we also find though that reasonable extensions of the model no longer generate a gravity form while this does not significantly complicate estimation and comparative statics analysis it raises questions about the empirical validity of gravity specifications for cross border financial holdings that need to be addressed in future work

high rural population density africa what are the growth requirements and who participates abstract a large and increasing proportion of agricultural growth in africa must come from continuous gains in land productivity in areas of high population density and hence with already relatively high yields what that requires is analogous to the green revolution in asia several features differentiate the african situation those include greater diversity in cropping pattern including a historically larger and more widespread tropical commodity export sector the physical infrastructure in rural africa is far inferior to that of most asian countries while the greater diversity of agriculture calls for a larger and more diverse institutional structure the reality is that the research systems the ancillary education systems to spread innovation and the rural financial systems are generally greatly inferior to those of asia at the beginning of the green revolution ethiopia s record of a steady six to seven percent growth for agriculture and nearly halving of rural poverty demonstrates that with the right policies and investments a very poor country starting with poor physical and institutional infrastructure can bring a major contribution from agriculture growth to increased gdp and reduced poverty as in asia the bulk of accelerated agricultural growth will come from small commercial farmers they have sufficient farm income to reach or exceed the poverty level those are farms with depending on the country as little as 0 75 hectares to a few tens of hectares of land they comprise up to half the rural population and produce on the order of 70 80 percent of agricultural output they are in general not poor the poor have inadequate land to reach the poverty level initially with much underemployment and with substantial non farm employment the primary driver of poverty reduction is the small commercial farmer spending on the order of half of increased income on nontradable employment intensive goods and services from the rural non farm sector

a simple solution to the distance puzzle in international trade abstract i propose a simple solution to the distance puzzle in international trade contrary to existing estimates of persistent or increasing distance effects on trade i offer robust evidence that the impact of distance on trade has fallen steadily over time

harvesting in a fishery with stochastic growth and a mean reverting price we analyze a continuous nonlinear bioeconomic model to demonstrate how stochasticity in the growth of fish stocks affects the optimal exploitation policy when prices are stochastic mean reverting and possibly harvest dependent optimal exploitation has nonlinear responses to the price signal and should be conservative at low levels of biological stochasticity and aggressive at high levels price stochasticity induces conservative exploitation with little or no biological uncertainty but has no strong effect when the biological uncertainty is larger we further observe that resource exploitation should be conservative when the price reverts slowly to the mean simulations show that in the long run both the stock level and the exploitation rate are lower than in the deterministic solution with a harvest dependent price the long run price is higher in the stochastic system the price mean reversion rate has no influence on the long run solutions

the geography of trade in goods and asset holdings gravity models have been widely used to describe bilateral trade in goods portes and rey portes r rey h 2005 the determinants of cross border equity flows journal of international economics 65 2 269 296 applied this framework to cross border equity flows and found that distance which proxies information asymmetries is a surprisingly very large barrier to cross border asset trade we adopt a different point of view and explore the complementarity between bilateral trade in goods and bilateral asset holdings in a simultaneous gravity equations framework providing different instruments for both endogenous variables we show that a 10 increase in bilateral trade raises bilateral asset holdings by 6 to 7 the reverse causality is also significant albeit smaller controlling for trade the impact of distance on asset holdings is drastically reduced keywords gravity models international finance international trade simultaneous equations

optimal capital accumulation in a fishery a nonlinear irreversible investment model abstract a nonlinear two state variable two control variable model of a fishery with irreversible investment and harvest capacity constraints is examined the model relaxes assumptions of linearity in investment costs and variable harvest profits in an earlier model by c w clark f h clarke and g r munro econometrica 47 25 47 1979 in both the linear and nonlinear models the optimal capital accumulation paths in new fisheries is characterized by a period in which the physical capital stock level exceeds its long run sustainable equilibrium however unlike the linear model periods of positive net but declining gross investment are optimal in the nonlinear model this accords with observed capital accumulation paths from a number of fisheries the paper also finds different effects in optimal harvest policy depending upon whether the linearity appears in the variable profits function or the investment cost function

measuring business cycle time the business cycle analysis of arthur f burns and wesley c mitchell and the national bureau of economic research presumed that aggregate economic variables evolve on a time scale defined by business cycle turning points rather than by months or quarters do macroeconomic variables appear to evolve on an economic rather than a calendar time scale evidence presented here suggests that they do however the estimated economic time scales are only weakly related to business cycle time scales providing evidence against the view underlying traditional business cycle analysis copyright 1987 by university of chicago press

fiscal policy in good times and bad in the 1980s several countries with large government debt or deficit implemented substantial and in some cases drastic deficit cuts contrary to widespread expectations in many cases private consumption boomed rather than contracted this paper shows that in times of fiscal stress shocks to government revenues and especially expenditure have very different effects on private consumption than in normal times

harvesting and conserving a species when numbers are low population viability and gambler s ruin in bioeconomic models abstract in bioeconomic models of renewable resources population viability is either ignored entirely or the minimum viable population mvp is considered a crisp threshold below which a species is driven to extinction neither is consistent with ecological science the purpose in this paper is firstly to enhance ecological realism in economic models by incorporating insights regarding population viability from conservation biology we consider the effects of chance on optimal management and briefly discuss key results regarding population viability as derived by biologists second as a means to balance interests and morality we suggest a fuzzy compromise between the economist s and the biologist s preferred stock sizes

unnatural selection perverse incentives and the misallocation of credit in japan we examine the misallocation of credit in japan associated with the perverse incentives faced by banks to provide additional credit to the weakest firms firms are more likely to receive additional bank credit if they arein poor financial condition because troubled japanese banks have an incentive to allocate credit to severely impaired borrowers in order to avoid the realization of losses on their own balance sheets this evergreening behavior is more prevalent among banks that have reported capital ratios close to the required minimum and is compounded by the incentives arising from extensive corporate affiliations

land pressures the evolution of farming systems and development strategies in africa a synthesis abstract evidence assembled in this special issue of food policy shows that rising rural population densities in parts of africa are profoundly affecting farming systems and the region s economies in ways that are underappreciated in current discourse on african development issues this study synthesizes how people markets and governments are responding to rising land pressures in africa drawing on key findings from the various contributions in this special issue the papers herein revisit the issue of boserupian agricultural intensification as an important response to land constraints but they also go further than boserup and her followers to explore broader responses to land constraints including non farm diversification migration and reduced fertility rates agricultural and rural development strategies in the region will need to more fully anticipate the implications of africa s rapidly changing land and demographic situation and the immense challenges that mounting land pressures pose in the context of current evidence of unsustainable agricultural intensification a rapidly rising labor force associated with the region s current demographic conditions and limited nonfarm job creation these challenges are manageable but will require explicit policy actions to address the unique development challenges in densely populated rural areas

budgetary risks from real estate and stock markets fiscal revenues and government expenditures are affected by asset price changes in ways that are not accounted for by standard cyclical adjustment methods revenues are influenced by capital gains and turnover taxation as well as by output changes determined by the effect of wealth changes on consumption and investment and outlays may also be affected if collapsing asset prices prompt fiscal authorities to bail out private sector balance sheet problems we point out that these effects can be asymmetric resulting in deficit and debt biases and we find support for this phenomenon in panel estimates for a sample of 20 industrialized countries over 1982 2002 the estimated coefficients indicate that 30 40 of the dramatic early 1990s fiscal balance deteriorations in the uk and sweden was due to asset price effects with a particularly relevant role for real estate price changes if financial markets experience boom bust cycles prudent management of fiscal windfalls in boom phases is needed to ensure fiscal and financial sustainability in bust phases and budgetary rules may need to account explicitly for a separate role of asset price related effects felix eschenbach and ludger schuknecht

death of distance and the distance puzzle abstract despite the onset of globalization year by year cross country regressions of the gravity model usually suggest that the impediment of geographical distance on bilateral trade is rising and not declining over time this effect of distance is dubbed the distance puzzle in this paper we argue that prima facie evidence of the distance effect from the year by year regressions may not be a good indicator of the true impact of distance on trade

toward a food secure future ensuring food security for sustainable human development in sub saharan africa food security remains a top development priority and global concern it is enshrined in the 2030 agenda for sustainable development in sustainable development goal two food security is also a core component of the human development and capability paradigm since food access and entitlements are critical for reinforcing essential human capabilities in introducing this special issue this paper argues that agriculture is central to improving food security and reducing poverty in africa it suggests that realizing the potential of agriculture in africa requires rapid increases in land productivity and increases in agricultural yields a science based approach that integrates gender and sustainability is critical to meet this goal through the design and implementation of policies that improve the availability farm inputs and farm technology the paper concludes by introducing the papers in this special issue

can modern input use be promoted without subsidies an analysis of fertilizer in ethiopia fertilizer use in ethiopia has nearly quintupled since official elimination of direct input subsidies in the early 1990s during this time policies changed from liberalization with both private and public sector participation to a government monopoly over imports along with exclusive marketing through farmers cooperatives this article presents estimates of detail costs and margins in the value chain econometrically derived profitability and yield responses as well as costs of the government s fertilizer promotion policies results suggest that a irrespective of the methods of calculation fertilizer use in major cereal is profitable b while there is no official subsidy program fertilizer promotion has involved large fiscal costs estimated at us 40 million per year since 2008 and c there has been a mismatch between government s policy targets and the effective fertilizer demand resulting in large carryover stock with estimated implicit costs of us 30 million per year during 2008 2011 areas of policy attention value chain improvements and ongoing efforts to improve for fertilizer use and profitability are discussed

what drives international financial flows politics institutions and other determinants abstract this paper uses a large panel of financial flow data from banks to assess how institutions affect international lending first employing a time varying composite institutional quality index in a fixed effects framework the paper shows that institutional improvements are followed by significant increases in international finance second cross sectional models also show a strong effect of initial levels of institutional quality on future bank lending third instrumental variable estimates further show that the historically predetermined component of institutional development is also a significant correlate of international bank inflows the results thus suggest that institutional underdeveloped can explain a significant part of lucas lucas robert e 1990 why doesn t capital flow from rich to poor countries american economic review papers and proceedings 80 2 92 96 1990 paradox of why doesn t capital flow from rich to poor countries the analysis also does a first step towards understanding which institutional features affect international banking