how integrated are the money market and the bank loans market within the european union abstract this paper estimates cointegration vectors of the time series of money market interest rates and bank lending rates the study includes six member countries of the european union eu and covers a period of 10 years from 1985 to 1994 during this period significant steps were taken that intensified financial integration in the eu including the free flow of capital a system of stable exchange rate parities and the implementation of a single market for banking services we conclude that the domestic money markets are closely linked but the domestic banking markets are segmented preliminary investigation of international differences in the capital structure of firms on the one hand and of domestic business cycle conditions on the other hand do not seem to explain differences in bank spreads across countries the results point to other directions presumably to local market power and to differences in the role of lender monitoring

corruption south african multinational enterprises and institutions in africa we examine the responses of south african multinational enterprises mnes to corruption in african markets in the context of institutional voids corruption is a source of uncertainty and additional transactional costs for mnes and it necessitates a strategic response the research employs a qualitative study of a sample of mnes with experience in internationalising into africa the results indicate that corruption in african markets is pervasive and closely associated with the institutional voids in these countries mnes see themselves as institution takers responding to countries institutional makeup at the organisational and individual level but fail to fully appreciate their impact on institutions both positively and negatively rather mnes focus on strategic responses at the organisational level to address corruption operationally in the host country we add to the existing literature by providing a dynamic framework of the complex webs of association between institutions mnes and corruption in conditions of economic underdevelopment the research suggests that mnes do not need to get caught in a vicious cycle whereby they perpetuate corruption in conditions of underdevelopment and institutional voids but instead can contribute towards a virtuous cycle through which they institutionalise ethical foundations

changes over time in multidimensional poverty methodology and results for 34 countries summary this paper sets out a systemic account of intertemporal changes in multidimensional poverty using the alkire foster adjusted headcount ratio and its consistent sub indices it uses three techniques to assess the pro poorness of multidimensional poverty reduction the analysis of changes in multidimensional poverty draws on the global multidimensional poverty index mpi and related destitution measure in 34 countries and 338 sub national regions covering 2 5 billion people for which there is a recent mpi estimation and comparable demographic and health survey dhs dataset across time first it assesses overall changes in poverty and its incidence and intensity and compares this with changes in 1 90 poverty next utilizing the property of subgroup decomposability it examines changes in the mpi and its consistent sub indices over time across urban rural regions sub national regions and ethnic groups the decomposition analysis identifies relevant national patterns including those in which the pace of poverty reduction is higher for the poorest subgroups finally the paper analyzes the dynamics of a strict subset of the poor who are identified as destitute using a more extreme deprivation cutoff vector and studies relative rates of reduction of destitution and poverty by country and region this extensive empirical analysis illustrates how to assess the extent and patterns of reduction of multidimensional poverty as well as whether it is inclusive or whether some people or groups are left behind naturally some further research questions emerge

impact of the carbon price on the integrating european electricity market we study the impact of the carbon price on the integrating electricity market in the eu our theoretical framework suggests that the price of carbon has a positive but uneven impact on electricity prices depending on the marginal production plant the carbon price may increase price differences in the short run we apply time series analysis on daily forward data from 2003 to 2011 and investigate whether we can find empirical evidence for our analytical findings our results support the hypotheses that integration in electricity prices has increased over time and that the carbon price has a positive but uneven impact on the integration of prices

uma aplicacao de modelos tar para o mercado de carne de frango no brasil cointegration has been the most used technique in analyzing commodities market integration this paper discusses the use of cointegration as a mean of directly testing market integration it was pointed out the main limitations especially in relation to its adequability to the principals of the economic theory an application for the national

distortionary taxes and the provision of public goods economists have long been concerned with finding an efficient level of public expenditure the classic statement of the problem was given by paul samuelson 1954 an optimal level of expenditure is where the sum of the marginal rates of substitution between the public good and a reference good equals the marginal rate of transformation between the public good and the reference good mrs mrt however samuelson s formula assumes that all of the revenue needed to finance public goods can be raised with lump sum taxes since this is not generally possible the formula must be modified to account for the distortionary effects of the tax system an appropriate modification is to multiply the cost side of the equation by a term that is commonly called the marginal cost of public funds mcf in the case of samuelson s formula where government is entirely financed with lump sum taxes the mcf would be exactly 1 0 in the traditional view of economists distortionary taxes cause the mcf to be greater than one thus raising the cost of providing public goods in this paper we discuss some cases where the mcf may be less than one we will illustrate this possibility using numerical examples for labor taxes

value creation management competencies and global corporate citizenship an ordonomic approach to business ethics in the age of globalization this article develops an ordonomic approach to business ethics in the age of globalization through the use of a three tiered conceptual framework that distinguishes between the basic game of antagonistic social cooperation the meta game of rule setting and the meta meta game of rule finding discourse we address three questions the answers to which we believe are crucial to fostering effective business leadership and corporate social responsibility first the purpose of business in society is value creation companies have a social mandate to organize mutually advantageous cooperation second business ethics should teach the management competencies necessary to fulfill business s societal mandate these competencies are optimization competence in the basic game of value creation governance competence in the meta game of political rule setting and the three discourse related skills of orientation competence reception competence and communication competence necessary for engaging in the meta meta game third companies can help solve global problems through global corporate citizenship if they participate as political and moral actors in rule setting processes and rule finding discourse aimed at laying the foundation for value creation on a global scale

examining dynamically changing timber market linkages market integration has been widely studied in the past to gain a better understanding of how different markets for the same good interact with one another traditional cointegration tests have been used to perform these analyses however these tests can only reveal the presence of stable or average long term relationships to evaluate market dynamics over time we modify a time varying smooth transition autoregressive tv star model to examine pine stumpage markets in the us south the proposed model incorporates an economic indicator and allows us to evaluate market integration as it changes throughout a specified time period the potential significance of this work is twofold first market integration can be observed as a function of an economic indicator and secondly the proposed model will allow us to draw inference about market integration at specific time points

toward the integration of european natural gas markets a time varying approach abstract over the past fifteen years european gas markets have radically changed in order to build a single european gas market a new regulatory framework has been established through three european gas directives the purpose of this article is to investigate the impact of the reforms in the natural gas industry on consumer prices with a specific focus on gas prices for industrial use the strength of the relationship between the industrial gas prices of six western european countries is studied by testing the law of one price for the period 1991 2009 estimations were carried out using both cointegration analysis and time varying parameter models results highlight an emerging and on going process of convergence between the industrial gas prices in western europe since 2001 for the six eu member states the strength and the level of convergence differ widely between countries strong integration of gas markets in continental europe except for the belgian market has been established it appears that the convergence process between continental countries and the uk is not completed thus the integration of european gas markets remains an open issue and the question of how far integration will proceed will still be widely discussed in the coming years

estimating the degree of market integration existing tests of spatial market integration are commonly based on statistical criteria without an explicit link to an economic model of price determination this article proposes new measures of market integration defined directly in terms of a well known spatial price determination model and develops an econometric methodology for estimating these measures due to the intractability of the conditional density function of prices we use indirect inference to estimate the model parameters and market integration measures the methodology is illustrated with simulated data and is applied to soybean price data for the united states brazil and the eu copyright 2008 oxford university press

the renminbi and poor country growth discussions on how best to exit from global imbalances to create a more balanced world economy have ignored the impact on poor countries of proposals to redress these imbalances this paper aims at filling that gap it gauges the degree of renminbi rmb undervaluation presents evidence on rmb undervaluation and china s gdp growth rate surveys the role of the real effective exchange rate both its level and its stability over time for underpinning growth in developing countries especially in large dual economies such as china and india finally the paper presents new evidence on growth linkages between china and poor countries for the last two decades and surveys literature on potential displacement effects of rmb appreciation the analysis allows broad conclusions to be drawn about the potential developing country beneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years

poverty alleviation as business strategy evaluating commitments of frontrunner multinational corporations summary in the debate on how to combat poverty the positive role of mncs is frequently mentioned nowadays although doubts and criticism remain facing this societal debate mncs feel the pressure to formulate a position this paper analyzes mncs policies on their poverty alleviating potential frontrunner mncs turn out not to be very outspoken especially not on those issues that have the largest potential to help alleviate poverty placed in the context of other mncs behavior a sector coordinated morality seems important which means that a meso approach to poverty alleviation needs to complement the current global macro and individual company micro focus

testing the central market hypothesis a multivariate analysis of tanzanian sorghum markets the central market hypothesis is important in the analysis of market integration because it implies a specific market structure while avoiding a simultaneity problem however despite its importance the central market hypothesis is difficult to test and is therefore often assumed this article shows that the hypothesis can be tested in a johansen cointegration test provided that prices are nonstationary this approach is applied to reveal the existence of central markets for sorghum in tanzania the results indicate that the tanzanian sorghum market can be grouped into two market regions with prices being determined in a central market in each region

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

measuring global poverty why ppp methods matter abstract we present theory and evidence to suggest that in the context of analyzing global poverty the eks approach to estimating purchasing power parities yields more appropriate international comparison of real incomes than the geary khamis approach our analysis of the 1996 and 2005 international comparison project data confirms that the geary khamis approach substantially overstates the relative incomes of the world s poorest nations and this leads to misleading comparisons of poverty across regions and over time the eks index of real income is much closer to being a true index of economic welfare and is therefore preferred for assessment of global poverty

testing for substitutability in the mackerel market a new method using fractional cointegration abstractthis article seeks to extend knowledge of the mackerel scomber scombrus market in the basque country a region in spain by analysing possible relationships between this and other species with similar characteristics such as the sardine sardina pilchardus the horse mackerel trachurus trachurus and the atlantic chub mackerel scomber colias all of them landed at the ports of the basque country specifically the goal is to learn whether these other species can be considered as mackerel substitutes to that end a fractional cointegration analysis of different series of historical prices is performed using a novel method never before used in studies of this type the results indicate that mackerel have no substitutes and thus form a mono species regional market this implies among other things that their price is not influenced by the prices of other species and this should be taken into account by managers when designing management measures and policies to improve the sustainability of

consumers willingness to pay for the color of salmon a choice experiment with real economic incentives in most retail markets sellers post the price and consumers choose which products to buy we designed an experimental market with posted prices to investigate consumers willingness to pay for the color of salmon salmon fillets varying in color and price were displayed in twenty choice scenarios in each scenario the participants chose which of two salmon fillets they wanted to buy to induce real economic incentives each participant drew one binding scenario the participants then had to buy the salmon fillet they had chosen in their binding scenario the choice data were analyzed with a mixed logit model

cointegration analysis of spot electricity prices insights on transmission efficiency in the western us abstract the us energy policy act of 1992 promoted the development of spot markets for electric power by requiring utilities to open their transmission systems to wholesale power sales in this paper we specify and estimate a vector error correction model using peak and off peak electricity spot prices during 1994 1996 covering 11 regional markets in the western united states and test these prices for evidence of market integration the results show evidence of an efficient and stable wholesale power market

european market integration for gas volume flexibility and political risk this is a copy of an article originally published by elsevier in energy economics see http www sciencedirect com science journal 03014215 2002 elsevier science b v

microfinance and poverty a macro perspective we test the hypothesis that microfinance reduces poverty at the macro level using cross country and panel data which are constructed by the microfinance information exchange data on microfinance institutions mfis and the world bank data taking account of the endogeneity associated with mfis loans we show that a country with higher mfis gross loan portfolio per capita tends to have lower levels of poverty indices contrary to recent micro evidence our results suggest that microfinance significantly reduces poverty at macro level and thus reinforce the case for channeling funds from development finance institutions and governments of developing countries into mfis

the marginal cost of funds in the presence of environmental externalities the marginal cost of funds mcf is useful for measuring the cost of taxation in cost benefit and tax reform analysis in this paper we present general equilibrium estimates of the mcf in an economy with environmental externalities we find that excluding such effects can yield quite misleading results the inclusion of externalities opens up a significantly larger potential for tax reform and the ranking of taxes is strikingly changed the estimate of the average base case mcf is reduced we also indicate double dividends in the norwegian economy

poverty and household size the widely held view that larger families tend to be poorer in developing countries has influenced research and policy the scope for size economies in consumption cautions against this view we find that the correlation between poverty and size vanishes in pakistan when the size elasticity of the cost of living is about 0 6 this turns out to be the elasticity implied by a modified version of the food share method of setting scales by contrast some measures of child nutritional status indicate an elasticity of unity consideration of the weight attached to child versus adult welfare may help resolve the non robustness of demographic profiles of poverty excerpt

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

an exploration of the changes in the international comparison program s global economic landscape abstract the purchasing power parity ppp rates from the 2011 round of the international comparison program icp imply some dramatic revisions to price levels and real incomes across the world as compared to the prior 2005 round this has important implications for many cross country comparisons including measures of poverty and inequality without presuming that either round is better methodologically the paper tries to help the community of icp users better understand the economic factors underlying the estimated changes in price levels across countries differences in domestic inflation rates have played a role as expected two other factors are identified the excess sensitivity to changes in market exchange rates suggests that the ppps may put higher weight on internationally traded goods than do domestic deflators additionally faster growing countries have seen a steeper rise in their ppp relative to market exchange rates this can be explained by a tendency for wage increases in growing economies to lead to a higher price level together these factors account for over 70 of the variance in ppp changes even ignoring methodological changes however an independent downward drift in price levels is also evident concentrated in the icp s asia region a possible explanation lies in the asia region s greater success relative to other regions in removing urban bias in the price surveys

weakly relative poverty prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion this property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion the authors propose weakly relative lines that relax these assumptions on calibrating our measures to national poverty lines and survey data we find that half the population of the developing world in 2005 lived in poverty only half of whom were absolutely poor the total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor with sustained economic growth the incidence of relative poverty became less responsive to further growth the number of relatively poor rose just as the numbers of absolutely poor fell

measuring poverty in a growing world or measuring growth in a poor world the extent to which growth reduces global poverty has been disputed for 30 years although there are better data than ever before controversies are not resolved a major problem is that consumption measured from household surveys which is used to measure poverty grows less rapidly than consumption measured in national accounts in the world as a whole and in large countries particularly india china and the united states in consequence measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries one plausible cause is that richer households are less likely to participate in surveys but growth in the national accounts is also upward biased and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys so it is possible for consumption of the poor to grow less rapidly than national consumption without any increase in measured inequality current statistical procedures in poor

pricing of eco labels with retailer heterogeneity abstract eco labels are important features of many natural resource and food markets they certify that a product has some desirable unobserved quality typically related to a public good such as being sustainably produced two issues that have received limited attention are whether pricing varies across different eco labels that may compete with each other and to what extent different retailers charge different prices using a unique data set of salmon prices in eight different united kingdom retail chains we investigate these issues by estimating a price attribute model that includes two eco labels and one country of origin label results show substantial variation in the prices of the different eco labels and that eco label premiums vary across retail chains specifically salmon certified with the marine stewardship council msc label has a high premium in low end retail chains but no statistically significant premium in the high end chains these findings question the ability of the msc label to transmit consumer willingness to pay for public goods through the supply chain to incentivize sustainable management in contrast premiums for organic certification are similar in magnitude across retailer types in general failure to account for retailer heterogeneity will over or under estimate a label s premium

the extent pattern and degree of market integration a multivariate approach for the brazilian rice market the extent pattern and degree of integration are analyzed in a multivariate system with cointegrating restrictions the extent of the market is found by identifying locations that are linked by trade and where prices share identicall ong run information permanent component the pattern of integration characterizes interdependence and is analyzed by estimating a vector error correction model the degree of integration is calculated with persistence profiles of the long run relations we demonstrate that bivariate models are inadequate for capturing the spatial dynamics of price adjustment the methodology is applied to the brazilian rice market and policy implications are

international fish trade and exchange rates an application to the trade with salmon and fishmeal international fish trade is growing and fish exports represent an important source of foreign currency for many countries for a few countries the exports are also an essential part of the economy we revisit the seminal paper of richardson 1978 that addresses the issue of exchange rate pass through in commodity markets but in a multivariate cointegration framework the multivariate cointegration framework allows us to test common assumptions like exchange rate pass through leading price central markets and exogeneity of exchange rates this approach is particularly suited when studying markets for primary products we provide empirical examples using salmon imports to japan and fish meal exports from peru to germany

moral markets and moral managers revisited in the wake of recent corporate scandals this paper examines the claim made by john boatright that business ethics as it is currently conceived rests on a mistake ethics in business should not be achieved through managerial vision discretion or responsibility rather ethics should shape the design of institutions that regulate business from the outside what ethicists should advocate for according to boatright are moral markets not moral managers i explore the empirical and normative dimensions of his claim with special attention paid to the extent to which boatright s development of the economic theory of the firm supports his position i conclude by suggesting some reasons why moral markets and moral management are compatible frameworks for corporate reform

disentangling supply and demand shifts the impacts on world salmon price to understand price changes one must determine the relative impact of supply and demand shifts on price conditional on predetermined supply and demand elasticities we retrieve yearly shifts in regional supply and demand the relative impact on price from each supply and demand shift is determined through an equilibrium displacement model edm this procedure is applied on a yearly basis for the world salmon market in the period 2002 to 2011 the results indicate a large variation in demand and supply growth both over time and between regions while average annual price impacts from supply or demand shifts from most regions are not statistically significant price impacts from supply or demand shifts for specific periods are detected in all but one region this indicates that the use of smooth trend indicators is likely to be inappropriate for measuring supply and demand shifts and their impacts on price the procedure presented in this article can be a useful instrument for determining the relative im

measuring benefits from a marketing cooperative in the copper river fishery the degradation of product quality is one form of rent dissipation resulting from incomplete property rights in fisheries industry structure and information asymmetries can also lead to underinvestment in product quality even when property rights are well defined in this article we empirically examine whether the voluntary formation of a marketing cooperative was able to mitigate market failures that led to the production of inferior quality fish specifically we use a difference in differences estimation strategy to measure the impact that the copper river fishermen s cooperative an alaskan salmon marketing cooperative had on ex vessel salmon prices and salmon quality measures we find that the cooperative was able to improve product quality as well as attract and sustain a higher price for its salmon our findings provide empirical support for many of the key tenets of cooperative theory specifically we find evidence that marketing cooperatives can address existing market failures that marketing cooperatives can have advantages in high quality product markets and that over time as a result of their success marketing cooperatives may lead to lasting producer benefits even though they become obsolete due to nonmember free riding

growth still is good for the poor incomes in the poorest two quintiles on average increase at the same rate as overall average incomes this is because in a global dataset spanning 118 countries over the past four decades changes in the share of income of the poorest quintiles are generally small and uncorrelated with changes in average income the variation in changes in quintile shares is also small relative to the variation in growth in average incomes implying that the latter accounts for most of the variation in income growth in the poorest quintiles these findings hold across most regions and time periods and when conditioning on a variety of country level factors that may matter for growth and inequality changes this evidence confirms the central importance of economic growth for poverty reduction and illustrates the difficulty of identifying specific macroeconomic policies that are significantly associated with the relative growth rates of those in the poorest quintiles

estimating policy effects on spatial market efficiency an extension to the parity bounds model the standard parity bounds model pbm is extended to allow for dynamic shifts in regime probabilities in response to changes in marketing policy the approach allows estimation of the length of the adjustment period and a statistical test for no policy effects the extended pbm is applied to maize and wheat markets in ethiopia evidence of a dynamic adjustment path is found and grain marketing reforms are found to have improved spatial efficiency in a few markets worsened it in a few others but generally to have had little effect on the spatial efficiency of ethiopian grain markets

the developing world is poorer than we thought but no less successful in the fight against poverty a new data set on national poverty lines is combined with new price data and almost 700 household surveys to estimate absolute poverty measures for the developing world we find that 25 of the population lived in poverty in 2005 as judged by what poverty typically means in the world s poorest countries this is higher than past estimates substantial overall progress is still indicated the corresponding poverty rate was 52 in 1981 but progress was very uneven across regions the trends over time and regional profile are robust to various changes in methodology though precise counts are more sensitive

us and canadian livestock prices market integration and trade dependence cointegration of canadian and us livestock prices points to the existence of market integration in the period january 1996 to december 2004 trade flows of livestock and beef products were nonexistent between canada and the united states for many months in 2003 and 2004 suggesting market segmentation this lack of trade in beef and livestock was due to livestock beef import bans by both countries due to bovine spongiform encephalopathy it was also determined that canada s trade dependence in livestock and beef is cointegrated with canadian and us livestock prices however as the trade dependence variable is shocked the effects on canadian and us prices are opposite although one would expect that in an integrated market the price responses to an exogenous shock would be similar or statistically identical this result reinforces the case against the use of price cointegration analysis in determining presence or absence of market integration empirical results in this article raise some very difficult q

the indexation of interest depreciation and capital gains and tax reform in the united states abstract the treasury s 1984 tax plan suggests features of a comprehensive income tax including the indexation of interest depreciation and capital gains the 1985 president s proposal retains some of these indexing provisions but the tax reform act of 1986 does not this paper looks at the incentives under these tax regimes to make marginal investments in the corporate sector noncorporate sector and owner occupied housing it finds that inflation in the old system caused effective tax rates to rise for some assets and fall for others under the treasury or president s proposals the interference of inflation is virtually eliminated also the effects of inflation are substantially reduced by the 1986 act because mismeasured depreciation and interest deductions are taken at much lower rates

the mdgs and exit time the case of the philippines this article evaluates whether the philippines will be able to halve the incidence of poverty between 1990 and 2015 using the concept of exit time and household level data we find that the philippines as a whole will not be able to comply with target 1 of the millennium development goals mdgs although 15 of its provinces will be able to do so these provinces are closer to manila characterized by higher per capita expenditure growth rates and had lower incidence of poverty in 1988 this suggests the importance of policies to mitigate the regional disparity in achieving the mdgs

the marginal excess burden of different capital tax instruments others have measured the addition to deadweight loss from an increase in an effective capital income tax rate but there is no single way to raise such a rate in the authors general equilibrium model with multiple distortions in the allocation of real resources they find that an increase in the statutory corporate income tax rate has the highest marginal excess burden because it distorts intersectoral and interasset decisions as well as intertemporal decisions an investment tax credit reduction has negative marginal excess burden because it raises revenue while reducing interasset distortions more than it increases intertemporal distortions copyright 1989 by mit press

measuring and understanding behavior welfare and poverty angus deaton delivered his prize lecture on tuesday 8 december 2015 at the aula magna stockholm university these are the lecture slides this abstract was borrowed from another version of this item

testing for the lop under nonlinearity an application to four major eu pork markets this article develops an econometric procedure to test the validity of the law of one price lop under nonlinearity and to distinguish between its strong and its weak version the procedure is applied to four major eu pork markets using weekly prices from 1991 to 2008 the empirical results suggest that the markets are well integrated with deviations from the steady state price differentials corrected nonlinearly the lop is valid for all market pairs and for the pair germany spain it holds in its strong version

effects of income growth and tariffs on the world salmon market the effects of income growth and tariffs on salmon prices production and trade flows are analysed using total elasticities derived from an equilibrium displacement model of the world salmon market results suggest the total income elasticity in world trade for salmon is about one which means imports worldwide will grow at about the same pace as world income however owing in part to policies that restrict supply response not all exporters will share evenly in this growth with uk producers benefiting the most and norwegian producers the least within importing countries imports are more responsive to income growth than is domestic production which means protectionist pressures are apt to increase with affluence us tariffs on imports from norway and chile are counterproductive in that they reduce world imports with little effect on the us price norway s feed quota reduces the efficacy of us tariffs makes imports less responsive to income and increases price volatility hence quota elimination m

the world distribution of income falling poverty and convergence period we estimate the world distribution of income by integrating individual income distributions for 138 countries between 1970 and 2000 country distributions are constructed by combining national accounts gdp per capita to anchor the mean with survey data to pin down the dispersion poverty rates and head counts are reported for four specific poverty lines rates in 2000 were between one third and one half of what they were in 1970 for all four lines there were between 250 and 500 million fewer poor in 2000 than in 1970 we estimate eight indexes of income inequality implied by our world distribution of income all of them show reductions in global inequality during the 1980s and 1990s

the dynamic effects of tax law asymmetries under the laws of most countries a distinction is made between gains and losses by businesses losses that must be carried forward are subjept to two penalties a loss of interest and expiration previous examinations have focused on the higher expected tax payments such a tax system without full loss offset imposes on risky projects this paper presents a dynamic analysis of the impact of taxation on investment when gains and losses are treated asymmetrically the results demonstrate how firm characteristics and the timing of taxes can influence behaviour under current u s tax law a distinction is made between gains and losses by businesses for corporations gains are taxed at what is essentially a flat rate of 46 while losses do not necessarily qualify for a refund at the same rate to obtain an immediate refund the taxpayer must have had taxable income during the three previous years in excess of the current loss any losses that cannot be carried back in this fashion must be carried forward subject to two implicit penalties such loss carryforwards earn no interest and they expire after fifteen years similar provisions apply in other countries hence businesses investing in risky projects for which the probability of having to carry losses forward is positive can expect to pay higher taxes than they would under a system with full loss offset i e the immediate refund of taxes for losses incurred many corporations

estimating the scale and geography of global poverty now and in the future how much difference do method and assumptions make summary estimates of the historic and future scale and location or geography of global poverty by income expenditure have a long and contentious history in recent projections made on global poverty methods and assumptions vary so widely it is impossible to compare studies in a systematic way even on their estimates of current poverty in light of this we discuss the methodological issues arising and use a custom built model to provide a new consistent set of long run estimates of global poverty to show the impact of different methods and assumptions on the scale and location of global poverty

perspectives on multinational enterprises in emerging economies multinational enterprises mnes play a pivotal role in the development of many emerging economies in consequence they became the focus of scholarly research by economists and policy analysts in contrast international business scholars have been comparatively uninterested in analysing this role of mnes yet they could make important contributions to these debates first studies taking the individual firms as starting point would enhance understanding of the interaction between mnes and the local environment second theories and research methodologies developed in international business research could provide new insights into the dynamics of mnes in emerging economies the objective of this paper is to motivate more international business scholars to engage in research on positive and negative spillovers from foreign direct investment fdi in emerging economy societies to advance this research agenda scholars need to analyse the specific activities and capabilities of the firms involved and the impact of fdi on the broader social and environmental context for management this agenda raises the ethical question to what extent ought businesses to care about their local stakeholders

product aggregation market integration and relationships between prices an application to world salmon markets relationships between prices of goods offer motives of interest in at least two areas market integration and product aggregation there is a close relationship between market integration and aggregation which may increase the usefulness of market integration studies in this article these relationships are developed and illustrated by an application to the world salmon market it is shown that the law of one price holds for an international market with five salmon species this result has significant implications for the world salmon market regarding both product aggregation in demand analyses and international trade policy

is it enough evidence from a natural experiment in india s agriculture markets access to information and communication technologies icts such as mobile phone networks is widely known to improve market efficiency in this paper we examine whether access to timely and accurate information provided through ict applications has any additional impact using a detailed data set from reuters market light rml a text message service in india that provides daily price information to market participants we find that this information reduces the geographic price dispersion of crops in rural communities by an average of 12 over and above access to mobile phone technology and other means of communication to identify the effect of information on price dispersion we exploit a natural experiment where bulk text messages were banned unexpectedly across india for 12 days in 2010 we find that besides reducing geographic price dispersion rml also increases the rate at which prices converge across india over time we discuss the implications of this for development organizations and informat

how integrated is the indian wheat market abstract applying the momentum threshold autoregressive m tar model due to enders and granger enders w and granger c w j 1998 unit root tests and asymmetric adjustment with an example using the term structure of interest rates journal of business and economic statistics 16 3 pp 304 311 this article examines the relationship between the various prices of wheat quoted at different market centres in four indian states we find evidence of m tar asymmetric adjustments of wheat prices indicating that price signals within states are transmitted over time in an asymmetric manner this type of price adjusting behaviour is consistent as to how price differentials may respond to poor dissemination of knowledge regarding market conditions and high transactions costs the results offer important policy implications

price relationships in the petroleum market an analysis of crude oil and refined product prices in this paper the relationships between crude oil and refined product prices are investigated in a multivariate framework this allows us to test several partly competing assumptions of earlier studies in particular we find that the crude oil price is weakly exogenous and that the spread is constant in some but not all relationships moreover the multivariate analysis shows that the link between crude oil prices and several refined product prices implies market integration for these refined products this is an example of supply driven market integration and producers will change the output mix in response to price changes

goods prices and exchange rates what have we learned import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country recent research indicates that common currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets this evidence suggests that incomplete pass through is a consequence of third degree price discrimination while distance matters for market segmentation borders have independent effects the source of the border effect has not been clearly identified furthermore there is little evidence yet to suggest substantial market power is implied by the observed price discrimination

developing countries and mnes extending and enriching the research agenda foreign direct investment fdi through multinational enterprises mnes has emerged in the last decade as the principal source of foreign capital for developing countries meyer this issue underlines the need for international business ib scholars to understand the impact of these investments on host developing countries he offers a useful assessment of the literature and proposes a rich set of questions for further research however his research agenda can be extended and enriched in two ways first ib scholars must study as they always have causation in the opposite direction namely the impact of developing country context on mne behavior and the co evolution of these two variables over time in doing so they must incorporate into their models contemporary issues such as the continued inadequacy of rules for fdi in infrastructure sectors or the clever means by which mnes are rewriting the global rules under which they operate in developing countries e g on intellectual property rights second ib scholars must pay more attention to topics that are not mainstream within the field but are of great importance to developing countries examples include the behavior and performance of a new generation of home grown mnes the role of diaspora in homeland fdi in countries like china and india and the implications of global outsourcing of services

foreign investment and ethics how to contribute to social responsibility by doing business in less developed countries do foreign direct investment fdi and international business ventures promote positive social and economic development in emerging nations this question will always prove contentious first the impacts differ according to context second the social consequences and spillover effects of knowledge diffusion and technology sharing may be limited and hard to measure third contributions to enhancing social responsibility and improving living standards in host countries are delayed in effect causally complex and also hard to measure outcomes often critically depend on collaboration of governments international institutions the business world and non governmental organizations ngos research in this area is challenging and requires interdisciplinary collaboration between economists financial experts sociologists ethicists and other specialists this paper explores 1 the evidence to support the proposition that fdi and international business improve social conditions in less developed countries and 2 how these improvements are linked to strategies of corporate social responsibility csr and ethical business practice the paper draws insights from development fdi poverty alleviation and bottom of the pyramid bop literature applications are demonstrated using examples from poverty stricken areas of sub saharan africa the paper attempts not only to argue theoretically but also to provide practical evidence the approach is simultaneously descriptive analytical and prescriptive in order to address a wide audience it also highlights issues and trends for further academic research and presents the viewpoint that some limitations lie in the nature of ethics frameworks widely referenced in business and that these often fail to consider the compatibility of ethical constructs with relevant incentives in this vein we explore the application of homann s framework for advantage and incentive based ethics

markets and rent dissipation in regulated open access fisheries abstract using a model of regulated open access resource use with markets we illustrate the potential complexity of interactions between markets product quality excess effort and regulatory behavior in fisheries our model assumes two product types one of which is processed and storable the model describes the equilibrium that results when effort responds to open access incentives and when regulators respond to effort growth by mitigating its potential harmful effects on biomass safety we use numerical simulations to demonstrate a mechanism by which market growth leads to the diversion of raw inputs into the inherently inferior market the result is a scenario in which rents are dissipated not only because excessive inputs raise costs but also because inferior product types reduce revenues we conclude with an illustrative decomposition of rent gains into revenue and cost savings gains from rationalizing a hypothetical fishery demonstrating the potential significance of market side rents

competition between farmed and wild salmon the japanese salmon market this article examines the japanese market for salmon this market is of interest since it is the largest and most diversified salmon market in the world with wild and farmed species from europe and south and north america competing in the same market in contrast to the european union eu and u s markets there have been neither trade conflicts nor trade restrictions the japanese market can hence provide information about the impact of bringing substantial quantities of a new product into a market and the effect of large scale aquaculture on traditional fisheries in this article market integration between wild and farmed salmon on the japanese market is examined using both bivariate and multivariate cointegration analysis tests for the law of one price are also conducted the results indicate that the species are close substitutes on the market and that the expansion of farmed salmon has resulted in price decreases for all salmon species

price transmission and market integration vertical and horizontal price linkages for salmon relationships between prices are of interest when testing for market integration as well as analyses of supply chains a feature that has received little attention is that if two supply chains are linked by market integration at some stage then the whole supply chain will be linked furthermore the leading price in such a system can be in one supply chain and will not be revealed in market integration studies or analysis of a single supply chain an empirical analysis is provided for the supply chains for salmon which originates in norway and the united kingdom and is then sold at retail level in france as smoked salmon we find a high degree of price transmission in both supply chains as well as integrated markets

world welfare is rising estimation using nonparametric bounds on welfare measures abstract i take a new approach to measuring world inequality and welfare over time by constructing robust bounds for these series instead of imposing parametric assumptions to compute point estimates i derive sharp bounds on the atkinson inequality index that are valid for any underlying distribution of income conditional on given fractile shares and gini coefficients while the bounds are too wide to reject the hypothesis that world inequality may have risen i show that world welfare rose unambiguously between 1970 and 2006 this conclusion is valid for alternative methods of dealing with countries and years with missing surveys alternative survey harmonization procedures alternative gdp series or if the inequality surveys used systematically underreport the income of the very rich or suffer from nonresponse bias

on the market consistent valuation of fish farms using the real option approach and salmon futures we consider the optimal harvesting problem for a fish farmer in a model which accounts for stochastic prices featuring schwartz 1997 two factor price dynamics unlike any other literature in this context we take account of the existence of a newly established market in salmon futures which determines risk premia and other relevant variables that influence risk averse fish farmers in their harvesting decision we consider the cases of single and infinite rotations the value function of the harvesting problem determined in our arbitrage free setup constitutes the fair values of lease and ownership of the fish farm when correctly accounting for price risk the data set used for this analysis contains a large set of futures contracts with different maturities traded at the fish pool market between 12 06 2006 and 22 03 2012 we assess the optimal strategy harvesting time and value against two alternative setups the first alternative involves simple strategies which lack managerial flexibility the second alternative allows for managerial flexibility and risk aversion as modeled by a constant relative risk aversion utility function but without access to the salmon futures market in both cases the loss in project value can be very significant and in the second case is only negligible for extremely low levels of risk aversion in consequence for a risk averse fish farmer the presence of a salmon futures market as well as managerial flexibility are highly important

hicksian separability does not hold over space implications for the design of household surveys and price questionnaires abstract if relative prices of goods within a commodity group are constant hicksian separability lets the price of a single good represent the group price level this is relied on by price questionnaires used with household surveys in developing countries and when constructing temporal and spatial deflators methods of estimating demand systems from household survey data also rely on hicksian separability yet this restriction remains untested in cross sections we use unique data from vietnam with multiple specifications from within the same food groups to test if within group relative prices are constant over space the data firmly reject these restrictions some guidelines for survey design are discussed in terms of the characteristics of commodity groups that should be disaggregated and those that should have more elementary goods added to their linked price questionnaire

the generalized composite commodity theorem and food demand estimation this article reports tests of aggregation over consumer food products and estimates of aggregate food demand elasticities evidence that food demand variables follow unit root processes leads us to build on and simplify existing tests of the generalized composite commodity theorem we compute food demand elasticities using a method of cointegration that is shown to apply to a convenient but nonlinear functional form estimates are based on consumer reported expenditure data rather than commercial disappearance data appropriately specified models of consumer demand are central to market analysis it has been established that a valid equilibrium for markets characterized by diverse firms or diverse consumer products depends on downward sloping composite demand curves heiner braulke wohlgenant or on valid indirect utility functions chavas and cox given the large number of consumer food products food demand and price analysis must be implemented at some level of product aggregation improper aggregation can lead to biased estimates of welfare loss associated with public policies biased estimates of consumer and derived demand elasticities and misleading tests of market power testing for consistent aggregation over food products and estimating aggregate consumer food demand elasticities are the subjects of this article by far the most common justification for aggregation has been separable preferences one reason for its popularity has been the lack of a viable alternative tests of the composite commodity theorem hicks leontief lewbel are always rejected because it restricts relative prices within a group to remain fixed over time on the other hand aggregation based on weak separability is often rejected diewert and wales eales and unnevehr

china s soaring vehicle population even greater than forecasted abstract china s vehicle population is widely forecasted to grow 6 11 per year into the foreseeable future barring aggressive policy intervention or a collapse of the chinese economy we suggest that those forecasts are conservative we analyze the historical vehicle growth patterns of seven of the largest vehicle producing countries at comparable times in their motorization history we estimate vehicle growth rates for this analogous group of countries to have 13 17 per year roughly twice the rate forecasted for china by others applying these higher growth rates to china results in the total vehicle fleet reaching considerably higher volumes than forecasted by others implying far higher global oil use and carbon emissions than projected by the international energy agency and others

resource rent in individual quota fisheries traditional fisheries management schemes generate incentives for vessels to maximize catch resulting in rent dissipation and overcapacity individual vessel quota management schemes change the incentives to maximize profit and have the potential to generate resource rent and reduce capacity an interesting question is whether it is the changed incentives due to individual quota or the capacity reduction due to transferability of individual quota that is most important in generating rent in this study a cost function approach is used to model and measure rent generated and potential rent in a fishery managed with individual vessel quotas

on the measurement of poverty official statistics in the united states and the united kingdom show a rise in poverty between the 1970 s and the 1980 s but scepticism has been expressed with regard to these findings in particular the methods employed in the measurement of poverty have been the subject of criticism this paper re examines three basic issues in measuring poverty the choice of the poverty line the index of poverty and the relation between poverty and inequality one general theme running through the paper is that there is a diversity of judgments which enter the measurement of poverty and that it is necessary to recognize these explicitly in the procedures adopted there is likely to be disagreement about the choice of poverty line affecting both its level and its structure in this situation we may only be able to make comparisons and not to measure differences and the comparisons may lead only to a partial rather than a complete ordering the first section of the paper discusses the stochastic dominance conditions which allow such comparisons illustrating their application by reference to data for the united states the choice of poverty measure has been the subject of an extensive literature and a variety of measures have been proposed in the second section of the paper a different approach is suggested considering a class of measures satisfying certain general properties and seeking conditions under which all members of the class which includes many of those proposed give the same ranking those sceptical about measures of poverty often assert that poverty and inequality are being confounded the third section of the paper distinguishes four different viewpoints and relates them to theories of justice and views of social welfare

vegetable oil market and biofuel policy an asymmetric cointegration approach abstract the present paper analyses the long run relationship between vegetable oil prices and conventional diesel prices in the eu for the period 2005 2007 we applied recent developments in the threshold cointegration approach to investigate the presence of asymmetric dynamic adjusting processes between the prices of rapeseed oil sunflower oil and soybean oil and the price of a mineral oil diesel the results presented suggest a two regime threshold cointegration model only for the rapeseed oil diesel price pair thus the rapeseed oil price adjusts rapidly to its long run equilibrium determined by fossil diesel prices but this adjustment is asymmetric it differs if the divergence between the two prices is above or below a critical threshold consequently rapeseed oil appears particularly exposed to external shocks deriving from global political scenarios suggesting the reassessment of the high quota 80 of eu biodiesel represented by this vegetable oil

measuring energy poverty focusing on what matters abstract the provision of modern energy services is recognised as a critical foundation for sustainable development and is central to the everyday lives of people effective policies to dramatically expand modern energy access need to be grounded in a robust information base metrics that can be used for comparative purposes and to track progress towards targets therefore represent an essential support tool this paper reviews the relevant literature and discusses the adequacy and applicability of existing instruments to measure energy poverty drawing on those insights it proposes a new composite index to measure energy poverty both the associated methodology and initial results for several african countries are discussed whereas most existing indicators and composite indices focus on assessing the access to energy or the degree of development related to energy our new index the multidimensional energy poverty index mepi focuses on the deprivation of access to modern energy services it captures both the incidence and intensity of energy poverty and provides a new tool to support policy making

reinventing strategies for emerging markets beyond the transnational model with established markets becoming saturated multinational corporations mncs have turned increasingly to emerging markets ems in the developing world such em strategies have been targeted almost exclusively at the wealthy elite at the top of the economic pyramid recently however a number of mncs have launched new initiatives that explore the untapped market potential at the base of the economic pyramid the largest and fastest growing segment of the world s population reaching the four billion people in these markets poses both tremendous opportunities and unique challenges to mncs as conventional wisdom about mnc global capabilities and subsidiary strategy in ems may not be appropriate how mncs can successfully enter these low income markets has not been effectively addressed in the literatures on global and em strategies an exploratory analysis involving interviews with mnc managers original case studies and archival material indicates that the transnational model of national responsiveness global efficiency and worldwide learning may not be sufficient results suggest that the success of initiatives targeting low income markets is enhanced by recognizing that western style patterns of economic development may not occur in these business environments business strategies that rely on leveraging the strengths of the existing market environment outperform those that focus on overcoming weaknesses these strategies include developing relationships with non traditional partners co inventing custom solutions and building local capacity together these successful strategies suggest the importance of mncs developing a global capability in social embeddedness

inequality among world citizens 1820 1992 this paper investigates the distribution of well being among world citizens during the last two centuries the estimates show that inequality of world distribution of income worsened from the beginning of the 19th century to world war ii and after that seems to have stabilized or to have grown more slowly in the early 19th century most inequality was due to differences within countries later it was due to differences between countries inequality in longevity also increased during the 19th century but then was reversed in the second half of the 20th century perhaps mitigating the failure of income inequality to improve in the last decades jel d31 f0 n0 o0