economic shocks wealth and welfare the immediate effects of the asian crisis on the well being of indonesians are examined using the indonesia family life survey an on going longitudinal household survey there is tremendous diversity in the effect of the shock for some households it was devastating for others it brought new opportunities a wide array of mechanisms were adopted in response to the crisis households combined to more fully exploit benefits of scale economies in consumption labor supply increased even as real wages collapsed households reduced spending on semi durables while maintaining expenditures on foods rural households used wealth particularly gold to smooth consumption

credit market constraints consumption smoothing and the accumulation of durable production assets in low income countries investments in bullocks in india in this paper we formulate and estimate a finite horizon structural dynamic model of agricultural investment behavior that incorporates the major features of low income agricultural environments income uncertainty constraints on borrowing and rental markets and the use of investment assets to generate income and smooth consumption the model is fit to longitudinal indian household data on farm profits bullock stocks and pump sets the estimated structural parameters are used to assess the effects on the life cycle accumulation of bullocks agricultural profits and welfare associated with complete markets and bullock liquidity and with second best policies that provide assured sources of income to farmers and weather insurance

how resilient are labour markets to natural disasters the case of the 1998 bangladesh flood abstract natural disasters devastate economies as they impede capital accumulation the resilience of labour markets is crucial for the poor who rely on labour to reduce risk we evaluate how the 1998 flood of the century affected wages in bangladesh we find short term declines in agricultural and non agricultural wages agricultural workers who moved towards non agricultural employment to cope benefitted through a lower percentage reduction in short term wages endowed with human capital salaried workers were unable to mitigate income risk extending the eligibility of credit access or relief programmes may preserve local businesses and their employees in the years following a flood

adaptation to climate change a review through a development economics lens abstract this paper looks at adaptation to climate change from the point of view of poor households since the development literature has firmly established the role of weather risk as a source of income volatility for the poor and climate change is expected to increase this risk we review the range of risk coping mechanisms available to poorer households with a focus on possible barriers to adaptation we ask both how government interventions affect the set of options available for adaptation and risk coping and also what these adaptive responses imply for the prospects of sustainable development support for adaptation can involve efforts to make existing locations livelihoods and forms of production more resilient to climate risk in situ adaptation or reductions in vulnerability through the geographical and sectoral mobility of the poor transformational adaptation our review shows how successful adaptation will need to strike a balance between the two forms of adaptation avoiding locking in unsustainable practices in locations that are already marginal from an economic perspective and taking account of broader socio economic trends already taking place in many developing countries such as population growth and urbanisation we also highlight important considerations for policy makers which to date have been relatively neglected in the literature in particular related to the dynamic interaction between adaptation and sustainable development

ex ante and ex post labor supply response to risk in a low income area abstract this paper tests for ex ante and ex post labor supply responses to weather risk for rural indian farm households the analysis uses panel data on 2115 households spanning 13 states in rural india merged with a 22 year series of district level rainfall data ex ante households facing riskier distributions of rainfall are more likely to participate in the labor market ex post unexpectedly bad weather and low rainfall increase labor force participation

rainfall and conflict a cautionary tale abstract there is evidence that in some contexts income shocks cause conflict the literature demonstrating this relationship uses rainfall shocks to instrument for income shocks arguing that in agriculturally dependent regions negative rain shocks lower income which incites violence this identification strategy relies on the assumption that rainfall shocks affect conflict only through their impacts on income this paper evaluates this exclusion restriction in the context of religious conflict in india using data on dam construction i identify districts that are downstream from irrigation dams and show that income in these areas is much less sensitive to rainfall fluctuations however rain shocks remain equally strong predictors of riot incidence in these districts i explore other channels through which rainfall might affect conflict

agricultural productivity and the sectoral reallocation of labor in rural india abstract how do shocks to agricultural productivity affect the allocation of labor across sectors of the economy to answer this i use data from rural india to show that exogenous increases in agricultural productivity caused by abnormally high levels of precipitation lead to an increase in the labor share of the non agricultural sector i further show that the non tradable sector expands significantly when agricultural output increases this evidence is consistent with increasing agricultural output causing increased demand for local non tradables which in turn increases the non agricultural labor share

an employment guarantee as risk insurance assessing the effects of the nregs on agricultural production decisions uninsured risk constrains households in their production decisions in many developing countries similarly to crop insurance employment guarantees can support farmers in managing agricultural production risks evidence from representative panel data of andhra pradesh india suggests that the national rural employment guarantee scheme nregs reduces households uncertainty about future income streams because it provides employment opportunities in rural areas independently of weather shocks and crop failure because the nregs makes an ex post labor supply response to agricultural shocks more efficient households with access to the nregs can shift their production towards riskier but also more profitable crops the observed shifts in agricultural production do considerably raise the profitability of agricultural production and hence the incomes of smallholder farmers the findings are not driven by changes in the labor or cost intensity of those crops which supports the idea that the causal mechanism underlying the observed changes is indeed an insurance effect

loss aversion and the demand for index insurance abstract this work analyzes if reference dependence and loss aversion can explain the puzzling low adoption rates of rainfall index insurance we present a model that predicts the impact of loss aversion on index insurance demand to vary with different levels of insurance understanding index insurance demand of farmers who are unaware of the loss hedging benefit that insurance provides decreases with loss aversion in contrast insurance demand of farmers who are aware of the loss hedging benefit increases with loss aversion the model further predicts that farmers who are unaware of the loss hedging benefit will not demand an even highly subsidized index insurance using data from a randomized controlled trial involving a sample of indian farmers we provide empirical support for our core conjecture that insurance understanding mitigates the negative impact of loss aversion on index insurance adoption

learning by imitation abstract this paper introduces a learning algorithm that allows for imitation in recursive dynamic games the kiyotaki wright model of money is a well known example of such decision environments in this context learning by experience has been studied before here we introduce imitation as an additional channel for learning in numerical simulations we observe that the presence of imitation either speeds up social convergence to the theoretical markov nash equilibrium or leads every agent of the same type to the same mode of suboptimal behavior we observe an increase in the probability of convergence to equilibrium as the incentives for optimal play become more pronounced

search evolution and money abstract this paper describes a search theoretic model that can be used to determine which objects serve as media of exchange or money existing versions of the model are generalized to allow arbitrary distributions of agents who specialize in different consumption production activities i characterize the way the numbers of consumers and producers of the various goods help determine which goods serve as money the distribution is then endogenized so that agents can choose their type this generates a unique equilibrium outcome ideas from evolutionary dynamics are employed as a way to interpret the model and to compute equilibria

land holdings living standards and labour supply functions evidence from a poor agrarian economy recent empirical studies of labour supply in ldc agriculture show both positive and negative sloping curves contrary to the traditional claims that such functions are backward bending in this study the causes for these differing results are traced empirically to the economic status of workers and the level of development of their villages in sharp contrast to prior assertions that workers in developing nations are limited by low aspirations

food prices wages and welfare in rural india this paper considers the welfare and distributional consequences of higher relative food prices in rural india through the lens of a specific factors general equilibrium trade model applied at the district level the evidence shows that nominal wages for manual labor both within and outside agriculture respond elastically to increases in producer prices that is wages rose faster in rural districts growing more of those crops with large price run ups over 2004 09 accounting for such wage gains the analysis finds that rural households across the income spectrum benefit from higher agricultural commodity prices indeed rural wage adjustment appears to play a much greater role in protecting the welfare of the poor than the public distribution system india s giant food rationing scheme moreover policies like agricultural export bans which insulate producers as well as consumers from international price increases are particularly harmful to the poor of rural india conventional welfare analyses that assume fixed wages and focus on households net sales position lead to radically different conclusions

money as a medium of exchange in an economy with artificially intelligent agents abstract we study the exchange economies of kiyotaki and wright 1989 in which agents must use a commodity or fiat money as a medium of exchange if trade is to occur our agents are artificially intelligent and are modeled as using classifier systems to make decisions in the assignment of credit within the classifier systems we introduce some innovations designed to study sequential decision problems in a multi agent environment for most economies that we have simulated trading and consumption patterns converge to a stationary nash equilibrium even if agents start with random rules in economies with multiple equilibria the only equilibrium that emerges in our simulations is the one in which goods with low storage costs play the role of medium of exchange i e the fundamental equilibrium of kiyotaki and wright

on money as a medium of exchange we analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo nash equilibria in trading strategies are characterized certain goods emerge endogenously as media of exchange or commodity money depending both on their intrinsic properties and on extrinsic beliefs there are also equilibria with genuine fiat currency circulating as the general medium of exchange we find that equilibria are not generally pareto optimal and that introducing fiat currency into a commodity money economy may unambiguously improve welfare velocity acceptability and liquidity are discussed

drought of opportunities contemporaneous and long term impacts of rainfall shocks on human capital higher wages are generally thought to increase human capital production particularly in the developing world we introduce a simple model of human capital production in which investments and time allocation differ by age using data on test scores and schooling from rural india we show that higher wages increase human capital investment in early life in utero to age 2 but decrease human capital from age 5 to 16 children switch out of school into productive work when rainfall is higher the opportunity cost of schooling even for fairly young children is an important factor in determining overall human capital investment

volatility spillovers between food and energy markets a semiparametric approach previous literature on volatility links between food and energy prices is scarce and mainly based on parametric approaches this article examines these links by using a semiparametric garch model recently proposed by long et al 2011 which is essentially a nonparametric correction of the parametric conditional covariance function the analysis focuses on price links between crude oil ethanol and sugar prices in brazil results suggest strong volatility links between the prices studied parametric approximations of the conditional covariance matrix may lead to misleading results that can be improved upon by using nonparametric techniques

inequality as a determinant of malnutrition and unemployment policy this paper explores the policy implications that are obtained once it is recognized that at low nutrition intakes a person s productivity is an increasing function of intake in the context of a fully general equilibrium model it is shown that if aggregate assets in an economy are neither large nor small certain patterns of lorenz improving asset redistributions or nutrition transfers increase aggregate output and reduce the volume of involuntary unemployment and the incidence of undernourishment copyright 1987 by royal economic society

labor markets and poverty in village economies we study how women s choices over labor activities in village economies correlate with poverty and whether enabling the poorest women to take on the activities of their richer counterparts can set them on a sustainable trajectory out of poverty to do this we conduct a large scale randomized control trial covering over 21 000 households in 1 309 villages surveyed four times over a seven year period to evaluate a nationwide program in bangladesh that transfers livestock assets and skills to the poorest women at baseline the poorest women mostly engage in low return and seasonal casual wage labor while wealthier women solely engage in livestock rearing the program enables poor women to start engaging in livestock rearing increasing their aggregate labor supply and earnings this leads to asset accumulation livestock land and business assets and poverty reduction both accelerating after four and seven years these gains do not come at the expense of others non eligibles livestock rearing businesses are not crowded out and wages received for casual jobs increase as the poor reduce their labor supply in such labor activities our results show that i the poor are able to take on the work activities of the non poor but face barriers to doing so and ii one o interventions that remove these barriers lead to sustainable poverty reduction

remember when it rained schooling responses to shocks in india abstract despite long standing international agreements like the millennium development goals 264 million children in developing countries are not enrolled in school and children in rural areas remain twice as likely to be out of school as children in urban areas one potential explanation for this pattern is that children s education in rural areas is vulnerable to weather shocks but there is no consensus about whether rainfall shocks help or harm school enrollment in the existing literature this paper explores whether changes in the relationship between rainfall shocks and schooling outcomes over time can explain the different results in the literature by using household survey data from india across three decades my study finds that adverse rainfall shocks have an increasingly stronger positive impact on school enrollment over time whereas enrollment is increasingly falling after positive rainfall shocks this effect is stronger for girls than for boys more pronounced for older children and is consistent with an increase in the importance of opportunity costs of a child s time in more recent years children may have to drop out of school when employment opportunities are more readily available after a positive rainfall shock but are able to go to school when jobs are scarce these results offer a potential explanation for the different results in the literature where studies on countries with higher economic development tend to find results consistent with an opportunity cost story whereas this is not the case for studies on countries with a lower level of development the results suggest that policymakers need to pay close attention to the obstacles faced by girls and older children to make access to education universal and should develop policy tools that incentivize households to send their children to school even when employment opportunities are readily available

the effects of weather induced migration on sons of the soil riots in india migration is thought to cause sons of the soil conflict particularly if natives tend to be unemployed using data from india the authors investigate the causal effect of domestic migration on riots by instrumenting for migration using weather shocks in migrants places of origin they find a direct effect of migration on riots but do not find that this effect is larger in places with more native unemployment they argue and find evidence that migration is less likely to cause rioting where the host population is politically aligned with the central government politically privileged host populations can appease nativists and reduce migration through means that are less costly than rioting without these political resources hosts resort to violence beyond furthering the sons of the soil literature the authors detail a political mechanism linking natural disasters and possibly climate change and environmental degradation to riots and demonstrate a widely applicable strategy for recovering the causal effect of migration on violence

risk and insurance in village india comment the protection of poor households in high risk agrarian economies from shocks to their incomes has often been seen as a compelling motive for various forms of policy intervention including transfers of cash or food credit subsidies and public employment schemes for a survey see lipton and ravallion 1995 the desirability of such safety net policies clearly depends on how well pre existing risk sharing arrangements work while it is commonly thought that without effective policy intervention rural households are vulnerable to village wide shocks such as adverse prices or poor rains it is less clear to what extent risk sharing institutions within the village mitigate the effects of idiosyncratic income risk stemming for instance from ill health or localized crop damage 2 several recent papers have used household level data to implement tests of risk sharing that might inform such concerns 3 these tests are based on the proposition that with perfect risk sharing consumption at the household level should be insured against idiosyncratic risks and thus depend solely on the realization of the aggregate risk wilson 1968 diamond 1967 townsend 1994 tests this implication of perfect intra village risk sharing using longitudinal household data on consumptions and incomes for three villages in india he reports that the full insurance hypothesis provides a surprisingly good benchmark in that household consumptions co move and do not appear to be much influenced by contemporaneous own income our aim here is to examine the robustness of this potentially important finding we have two main concerns the first is that the specification townsend adopts potentially biases his test towards the null hypothesis of full insurance because it yields inconsistent estimates of the key test parameter under a plausible alternative we therefore estimate a different specification that generates consistent estimates under both the null and the alternative our second concern is that a particular form of measurement error in the consumption data townsend uses may have further biased his results toward the null hypothesis of full insurance to address this concern we use an instrumental variables procedure when we implement the test of consumption insurance with townsend s consumption data we also re estimate the test equations with a measure of consumption derived from the same underlying primary data by an alternate method finally townsend reports 1discussions with robert townsend stimulated our interest in this investigation the staff of the

seeing is believing evidence from an extension network experiment extension is designed to enable lab to farm technology diffusion decentralized models assume that information flows from researchers to extension workers and from extension agents to contact farmers cfs cfs should then train other farmers in their communities such a modality may fail to address informational inefficiencies and accountability issues the authors run a field experiment to measure the impact of augmenting the cf model with a direct cf training on the diffusion of a new technology all villages have cfs and access the same extension network in treatment villages cfs additionally receive a three day central training on the new technology they track information transmission through two nodes of the extension network from extension agents to cfs and from cfs to other farmers directly training cfs leads to a large statistically significant increase in adoption among cfs however higher levels of cf adoption have limited impact on the behavior of other farmers

consumption smoothing in island economies can public insurance reduce welfare abstract in this paper we study the effects of certain types of public compulsory insurance arrangements for aggregate shocks on private allocations in environments with limited commitment we show that this type of insurance can improve the wellbeing of private situations but it can also deteriorate it we also describe how different characteristics of the environment affect the role of public insurance using data on the mexican progresa program we document the impact that some government programs have in crowding out private transfers

learning to speculate experiments with artificial and real agents abstract this paper employs an artificial agent based computational approach to understanding and designing laboratory environments in which to test kiyotaki and wright s search model of money the behavioral rules of the artificial agents are modeled on the basis of prior evidence from human subject experiments simulations of the artificial agent based model are conducted in two new versions of the kiyotaki wright environment and yield some testable predictions these predictions are examined using data from new human subject experiments the results are encouraging and suggest that artificial agent based modeling may be a useful device for both understanding and designing human subject experiments

smoothing consumption by smoothing income hours of work responses to idiosyncratic agricultural shocks in rural india while research has demonstrated that farm households in developing economies are able to protect consumption from idiosyncratic crop shocks little evidence shows how this is achieved this paper examines the extent to which labor markets allow households to shift labor from farm to off farm employment and the extent to which such a shift explains the observed lack of correlation between consumption and idiosyncratic crop shocks the empirical analysis uses a novel measure of the idiosyncratic crop income shock which utilizes information on start of season cropping choices to more accurately estimate household expectations of weather

macroeconomic fluctuations in developing countries some stylized facts this paper documents the main stylized features of macroeconomic fluctuations and business cycle regularities for a group of 12 developing countries cross correlations between domestic industrial output and a large group of macroeconomic time series including government revenue and expenditure wages inflation money velocity private sector credit international trade and exchange rates are presented the effects of industrial country economic conditions on output fluctuations in these countries are also analyzed the robustness of the results is examined using three detrending procedures a modified hodrick prescott filter the baxter king band pass filter and a nonparametric technique overall the results show some similarities between macroeconomic fluctuations in developing and industrial countries e g procyclical real wages and counter cyclical variation in government expenditure but also some important differences in business cycle characteristics e g countercyclical variation in the velocity of monetary aggregates

perverse consequences of well intentioned regulation evidence from india s child labor ban although bans against child labor are a ubiquitous policy tool there is very little empirical evidence on their effectiveness in this paper we examine the consequences of india s landmark legislation against child labor the child labor prohibition and regulation act of 1986 using data from employment surveys conducted before and after the ban and using age restrictions that determined whom the ban applied to we show that the relative probability of child employment increases and child wages relative to adult wages decrease after the ban our main specification relies on comparing changes in work probabilities over time for children of the same age but with siblings who are rendered either eligible or ineligible for legal work when the ban is implemented the increases in the probability of economic activity are largest for children i in areas where the industries targeted by the ban play a larger role in local labor markets ii in areas where the probability of employer inspections is higher and iii in families that are poorer these results are consistent with a theoretical model building on the seminal work of basu and van 1998 and basu 2005 where families use child labor to reach subsistence constraints and where child wages decrease in response to bans leading poor families to utilize more child labor we also find decreases in child participation in schooling for younger children only and no economically meaningful change in household outcomes like assets or calorie intake

emergence of money as a medium of exchange an experimental study findings are reported from an experiment that implements a search theoretic model of money as a medium of exchange the question is whether subjects learn to adopt the same commodities as media of exchange that the model predicts will be used in equilibrium it is reported that subjects have a strong tendency to play fundamental rather than speculative strategies even in environments where speculative strategies yield higher payoffs some possible motivations for subjects behavior are examined and it is concluded that subjects are mainly motivated by past payoff experience as opposed to the marketability considerations that the theory emphasizes

risk financial markets and human capital in a developing country this paper explores the link between financial market incompleteness and human capital accumulation we examine how child school attendance responds to seasonal fluctuations in the income of agrarian households using panel data from rural india to pinpoint market imperfections we study responses to aggregate and idiosyncratic as well as to anticipated and unanticipated income shocks our main finding is that seasonal fluctuations in school attendance are a form of self insurance but one which does not result in a substantial loss of human capital on average

agricultural productivity growth rural economic diversity and economic reforms india 1970 2000 a salient theme in d gale johnson s work is the importance of agricultural development for general prosperity and for economic diversification e g johnson 2000 johnson has also noted that most of the world s poor are engaged in farming so that a key focus of development policy is to raise the incomes of farmers from a global perspective increasing the productivity of agriculture given the fixity of land is necessary for both poverty reduction and the development of the nonagricultural sector at the level of the world agricultural productivity gains poverty reduction and the growth of the nonfarm sector are complements however the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity in this article we use the experience of india over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open economy country in which there are cross area trade and capital flows we focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest we exploit the fact that india has maintained a policy of openness with respect to agricultural technology over this period permitting and actively supporting agricultural development and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s evidence on the relationship between agricultural growth and nonfarm

playing with money abstract experimental work in monetary economics is usually based on theory that incorporates an infinite horizon yet hard constraints on laboratory sessions lead to finite times when the game must with probability 1 end and then simple backward induction implies monetary equilibria cannot exist hence these experiments cannot evaluate subjects ability to settle on the use of money as a medium of exchange that ameliorates trading frictions as an equilibrium outcome to address this we present some finite horizon games where monetary exchange is an equilibrium outcome and report some experimental results using these games

experimental evidence on money as a medium of exchange abstract this paper presents an experimental examination of kiyotaki and wright s 1989 model of how money can arise as a medium of exchange while the results generally support the hypothesis that individuals are willing to utilize a good as a medium of exchange the trading patterns of a portion of the individuals deviated from the predicted patterns simulation studies suggest that while these deviations may have initially been a rational response by these subjects they persisted after they became less than optimal

selling labor low wage responses to productivity shocks in developing countries productivity risk is pervasive in underdeveloped countries this paper highlights a way in which underdevelopment exacerbates productivity risk productivity shocks cause larger changes in the wage when workers are poorer less able to migrate and more credit constrained because of such workers inelastic labor supply this equilibrium wage effect hurts workers in contrast it acts as insurance for landowners agricultural wage data for 257 districts in india for 1956 87 are used to test the predictions with rainfall as an instrument for agricultural productivity in districts with fewer banks or higher migration costs the wage is much more responsive to fluctuations in productivity

learning about learning in games through experimental control of strategic interdependence we report experiments in which humans repeatedly play one of two games against a computer program that follows either a reinforcement learning or an experience weighted attraction algorithm our experiments show these learning algorithms detect exploitable opportunities more sensitively than humans also learning algorithms respond to detected payo increasing opportunities systematically however the responses are too weak to improve the algorithms payos human play against various decision maker types doesn t vary signicantly these factors lead to a strong linear relationship between the humans and algorithms action choice proportions that is suggestive of the algorithm s best response correspondence these properties are revealed only by our human versus computer experiments and not by our standard human versus human experiments nor our model simulations jel classication c72 c92 c81

natural disasters and labor markets abstract while it is clear that natural disasters have serious welfare consequences for affected populations less is known about how local labor markets in low income countries adjust to such large shocks combining data from the indonesia family life survey the desinventar database the u s geological survey and district level employment indicators this paper explores how a large earthquake in indonesia affected labor market outcomes in particular the evolution of wages across sectors i find that the earthquake had a positive effect on wage growth for workers who were employed in the agricultural sector at baseline i propose two mechanisms for this result a higher growth rate of the price of rice and a downward shift in the supply of workers in the agricultural sector i show that evidence mainly supports the latter labor shifted out of the agricultural sector into the construction sector raising the marginal product of labor in agriculture

labor regulations and contract labor use evidence from indian firms abstract labor regulations in india differ by states and apply differently across types of laborers the most restrictive laws make it harder to fire permanent workers for firms however these laws do not apply to workers hired through contractors contract workers using firm level data from india i find that compared to firms in flexible labor regulations those in more restrictive labor regimes hire more contract workers as a response to transitory local demand shocks i find no differential response in hiring of permanent workers by firms faced with these shocks this suggests that firms circumvent labor laws by hiring workers indirectly through contractors in the face of economic fluctuations

economic shocks and labor market flexibility we test how labor markets adjust to large but temporary economic shocks in a context in which such shocks are common using an individual level panel from 1 140 philippine municipalities over 26 quarters we find that workers in areas affected by strong typhoons experience reductions in hours worked and hourly wages without evidence of layoffs the results are strongest for formal wage paying jobs we argue that those results are best explained by implicit contracts where workers and firms share risks we provide extensive qualitative data suggesting that employment contracts in the philippines allow for such flexibility abstract from author

liquidity a new monetarist perspective this essay surveys the new monetarist approach to liquidity work in this literature strives for empirical and policy relevance plus rigorous foundations questions include what is liquidity is money essential in achieving desirable outcomes which objects can or should serve in this capacity when can asset prices differ from fundamentals what are the functions of commitment and collateral in credit markets how does money interact with credit and intermediation what can and should monetary policy do the research summarized emphasizes the micro structure of frictional transactions and studies how institutions like monetary exchange credit arrangements or intermediation facilitate the exchange process

the labor market effects of credit market information we exploit a natural experiment to provide one of the first measurements of the causal effect of negative credit information on employment and earnings we estimate that one additional year of negative credit information reduces employment by 3 percentage points and wage earnings by 1 000 in comparison the decrease in credit is only one fourth as large negative credit information also causes an increase in self employment and a decrease in mobility further evidence suggests this cost of default is inefficiently borne by those most creditworthy among previous defaulters received april 5 2017 editorial decision september 2 2017 by editor andrew karolyi authors have furnished an internet appendix which is available on the oxford university press web site next to the link to the final published paper online

introduction to the special issue on agent based computational economics abstract a brief overview of agent based computational economics ace is given followed by a synopsis of the articles included in this special issue on ace and in a companion special issue on ace scheduled to appear in computational economics

effects of transitory shocks to aggregate output on consumption in poor countries this paper provides instrumental variables estimates of the response of aggregate private consumption to transitory output shocks in poor countries to identify exogenous unanticipated idiosyncratic and transitory variations in national output we use year to year variations in rainfall as an instrumental variable in a panel of 39 sub saharan african countries during the period 1980 2009 our estimates yield a marginal propensity to consume out of transitory output of around 0 2 to explain this result we show using instrumental variables techniques that there is a significant negative effect of transitory output shocks on net current transfers and a significant positive and quantitatively large effect on the trade balance an important implication is that frictions to private financial flows do not necessarily imply large effects of transitory shocks to aggregate output on private consumption in poor countries