central bank constitutions for federal monetary unions abstract in a monetary union the central bank constitution must distribute the power over monetary policy between the members and the administrative center of the union we compare alternative distributions and evaluate their performance dominance of regional interests always leads to inefficient monetary stabilization policies whether or not dominance of regional interests leads to a higher long run rate of inflation depends on the union s political constitution

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

marketing margins and price uncertainty the case of the u s wheat market this paper seeks to determine the effect of changes in output price risk on marketing margins a theoretical model of price determination in a marketing channel with risk averse firms is developed this model shows that if marketing firms are competitive and decreasingly absolute risk averse then an increase in output price risk should result in higher expected marketing margins empirical evidence from the wheat marketing channel supports the theoretical model increased price variability significantly increases wheat marketing margins for both the farm mill margin and the mill retail margin these results suggest a potential benefit from price stabilization programs

modeling the effects of restricting packer owned livestock in the u s swine industry an imperfectly competitive model of processor packer behavior is formulated to estimate welfare effects from restricting alternative marketing arrangements of livestock procured by packers pork was aggregated into a composite good and hog supply was partitioned into negotiated spot contract and packer owned the model was estimated with the dynamic sur method using weekly mandatory price reporting mpr hog and pork data from 2001 to 2005 the model incorporates production uncertainty by modeling expected pork output as expected output in the input demand functions the welfare effects from banning packer owned hogs indicate that independent producers consumers and packers all would lose

monetary policy committees and interest rate setting abstract this paper shows that it is preferable for monetary policy to be conducted by a committee instead of a single policy maker if there is uncertainty about potential output we examine three decision procedures an optimal procedure averaging and voting and find that the latter is the appropriate way to reach decisions if policy makers are not equally skilled finally we demonstrate that efficient decision procedures reduce the persistence of shocks

a century of research on agricultural markets this article provides a perspective on major innovations in research on agricultural markets over the past century we review research on market structure and performance vertical coordination arrangements and institutions for producer collective action contributions to empirical modeling of agricultural price determination and marketing margins are also evaluated as are innovations in research on spatial market relationships and the role of storage finally we discuss contributions to understanding market information systems and the functioning of market based mechanisms for agri

markdown pricing and cattle supply in the beef packing industry we determine the effect of anticipated and unanticipated cattle supply on the departure of fed cattle price from cattle s marginal value product results indicate fed cattle were priced significantly below their marginal value during 31 of the 59 quarters between 1972ii and 1986iv when unanticipated supply shocks are small markdown behavior is consistent with the hypothesis that packers follow an average processing cost apc pricing rule one implication of our results is that reducing industry concentration is not likely to lead to changes in cattle prices predicted by scp based studies of the industry

measuring market power in multi product oligopolies the us meat industry this paper develops and estimates an economic model for measuring market power in a quantity setting oligopoly engaged in the joint production of demand related goods the model which allows for firms conjectures about both same and cross market responses to own output variation is applied to the us meat beef and pork industry he hypothesis that the industry s equilibrium reflects price taking behaviour is rejected the hypothesis of no cross effects cannot be rejected roughly half of the farm to retail price spreads for beef and pork appear to be attributable to market power

imperfect information and dynamic conjectural variations this article analyzes oligopoly interaction in an environment where firms are imperfectly informed about the evolution of the market demand curve the analysis develops a two period cournot framework under the assumptions that demand shifts are positively serially correlated that firms never directly observe the demand curve and that firms never observe the previous quantity decisions of rivals firms do draw inferences about the position of the demand curve from past observations on prices consequently the current output of a firm will influence the current market price which will then influence rivals inferences about future demand the future output decisions of rivals will respond accordingly the theory predicts negative dynamic conjectural variations essentially a firm perceives that an increase in its output will lower the current market clearing price which will cause rival firms to think that the demand curve has shifted down and hence induce them to lower their outputs in the future

risk response in the beef marketing channel a multivariate generalized arch m approach a model of the farm retail price spread for beef is specified under rational expectations in which systematic risk response on the part of marketing intermediaries is allowed the three equation structural model contains potentially time varying risk terms in margin and supply equations which i approximate and estimate using a multivariate garch in mean approach the estimated model is used to infer relative risk premia in beef margins and to simulate short run equilibrium risk effects results indicate that price risk has at times had substantial impacts on farm and retail beef prices and production

trade association disclosure rules incentives to share information and welfare in this article i propose a monopolistic competition framework to analyze the effects of different disclosure rules used by trade associations on the incentives to share information and on the welfare of consumers firms and society this framework is appropriate whenever a single firm cannot influence aggregate market magnitudes and serves as a benchmark for the analysis of information pooling agreements abstracting from strategic considerations i report two main results first a policy of nonexclusionary disclosure destroys the incentives to share information while exclusionary disclosure preserves them second information sharing increases expected total surplus with cournot competition but decreases it with bertrand competition in the context of a quadratic normal model with demand uncertainty

information sharing through sales report this paper studies information sharing through sales reports in cournot and bertrand duopolies with common demand uncertainty without sales reports firms choose quantities or prices strategically to manipulate the rivals perception about the market sales reports eliminate firms incentives to do so and keep them only maximizing the current profits if firms make independent sales report decisions no sales report is the unique subgame perfect equilibrium however in a cournot bertrand industry firms are better off with sales reports when goods are substitutes complements further sales reports decrease increase consumer surplus and social welfare in a cournot bertrand industry the results sharply contrast those from the previous information sharing models where firms exchange signals about the future demand copyright 1994 by blackwell publishing ltd

federal monetary policy what is the optimal institutional structure for a federal central bank the framework developed in this paper is used to analyze under what conditions an individual region will prefer a monetary union to be organized according to regional or common influences and how a combination of both can be rationalized the implications of an enlargement of a monetary union for changes in its institutional setup are also derived

long run industry equilibrium with uncertainty abstract in this paper we consider the effects of uncertainty on industry equilibrium when firms must commit themselves to production before prices are revealed we show that a an increase in demand uncertainty will i not affect the equilibrium number and size of firms if they are risk neutral ii reduce the equilibrium number of firms if they are risk averse but will have an ambiguous effect on their size b in equilibrium firms operate at capacity if they are risk neutral but at excess capacity if they are risk averse

why has poland avoided the price liberalization trap the case of the hog pork sector price liberalization in the agri food economy in the transition economies is likely to slip into a trap food prices rocket up consumption declines but food supply does not catch up and even contracts however during the transition period following the 1989 price liberalization the polish hog pork sector succeeded in avoiding this trap by conducting market structure and econometric analysis this article looks for the reasons for this success in the polish hog pork sector the restructuring of state owned enterprises and the emergence of private firms introduced an effective price transmission mechanism between the processing retailing and farm levels this mechanism allowed farm supply to respond to changed demand and to take advantage of increased retail prices such a relatively efficient marketing system was made possible by a relatively stable macroeconomic environment and limited government intervention

government assisted oligopoly coordination a concrete case in 1993 the danish antitrust authority decided to gather and publish firm specific transactions prices for two grades of ready mixed concrete in three regions of denmark following initial publication average prices of reported grades increased by 15 20 percent within one year we investigate whether this was due to a business upturn and or capacity constraints but argue that these seem to have little explanatory power we conclude that a better explanation is that publication of prices allowed firms to reduce the intensity of oligopoly price competition and hence led to increased prices contrary to the aim of the authority

risk behavior and rational expectations in the u s broiler market this study examines the empirical implications of extending the rational expectations hypothesis reh to include price uncertainty a general estimation framework that incorporates both the restrictions on structural parameters and the variance covariance terms is developed garch time series processes are used to generate time varying expectations of both the means and the variances of exogenous variables the empirical application is with a quarterly model of the u s broiler industry the results indicate that the rational expectation of price variance is an important determinant of broiler supply a formal test indicates that the restrictions implied by the reh cannot be rejected

measuring oligopsony power with shadow prices u s markets for pulpwood and sawlogs empirical estimation of input market power hindered by problems in measuring an input s value of marginal product vmp by estimating a variable profit function system however one can infer a factor s vmp through its shadow price this technique is used here to specify a structural equation system which is estimated using time series data for the u s sawmilling and paper industries to empirically measure the degree of oligopsony power for sawlog and pulpwood inputs respectively results evaluated at sample means indicate that pulpwood markets are more oligopsonistic than sawlog markets though both perform closer to perfect competition than monopsony time trends for market power differ for each product and perfect competition cannot be rejected for sawlogs in later years copyright 1995 by mit press

optimal cartel trigger price strategies abstract a dynamical model of industry equilibrium is described in which a cartel deters deviations from collusive output levels by threatening to produce at cournot quantities for a period of fixed duration whenever the market price falls below some trigger price in this model firms can observe only their own production level and a common market price the market demand curve is assumed to have a stochastic component so that an unexpectedly low price may signal either deviations from collusive output levels or a downward demand shock

price behavior in a dynamic oligopsony washington processing potatoes punishment strategies are necessary to sustain a collusive oligopsony in a repeated game context when demand is uncertain and only market variables are observable this article proposes a test for tacit collusion among potato processors in washington state using a dynamic regime switching model estimated with a finite mixture method the results support the existence of punishment and collusive regimes and show the welfare losses due to anti competitive behavior on the part of processors to be significant processors oligopsony power is enhanced by higher domestic production imports and existing stocks but it is ameliorated by high capacity utilization rates and exports copyright 2001 oxford university press

the effect of farm supply shifts on concentration and market power in the food processing sector in this paper we examine the marginal impact of changing farm supply on the market structure of the downstream food processing sector we develop a theoretical model that allows for cost differences among processors and endogenizes downstream entry and exit comparative statics results are consistent with several well established trends in the food processing sector in particular the analysis demonstrates that increasing concentration in the food processing sector is consistent with decreasing market power indeed we find that when the farm supply curve shifts outward an increase in concentration can only occur when there is a decrease in market power

effects of forward sales on spot markets pre commitment sales and prices for fresh strawberries increasingly agricultural markets are vertically coordinated often a thinning spot market coexists with coordinated transactions raising the question of how private coordination affects the market as a whole one of the greatest challenges when analyzing such market level effects is obtaining information on private transactions we utilize publicly available data to evaluate how informal contracts in the fresh strawberry market affect spot market prices using a generalized autoregressive conditional heteroskedastic in mean garch m model we find that these informal contracts increased spot prices as argued by some industry members while the effect on spot price volatility varied by production region

market transparency and market structure the livestock mandatory reporting act of 1999 the premise of the livestock mandatory reporting act of 1999 is that enhanced transparency promotes competition this article provides a theoretical study of the consequences of such transparency for the structure conduct and performance of the livestock industry i conclude that the usefulness of the act to the livestock industry may not be in the value of reported information to feeders as the supporters of the act claim rather by forcing packers to pool information at negligible marginal cost the act may foster more competitive conduct in the procurement of livestock copyright 2003 oxford university press

european monetary policy and the ecb rotation model voting power of the core versus the periphery this paper analyses the voting power of individual members of the ecb governing council and in particular that of the executive board in the light of recent information published by the ecb using the randomization scheme based on the multilinear extension of games we modify the standard analysis in three ways first we include heterogeneous preferences of the governing council members second we address the agenda setting power of the ecb president third we take into account the dynamic decision setting we show that the rotation model is able to stabilize the position of the core countries of the euro area

an aggregate private expenditure function for the bangladesh economy abstract this paper specifies and estimates an aggregate private expenditure function for bangladesh for the period 1974 1 1985 4 it is specified on the basis of a monetary approach where the level of private expenditure depends not only on the level of real permanent disposable income but also on a variable which measures the extent of disequilibrium in the real money market the regression results suggest that the long run income elasticity of private expenditure is around 0 765 which is lower than unity a fact which induces a decline in the ratio of private expenditure to income as income increases the adjustment coefficient to monetary disequilibrium indicates that in the long run around 32 of excess money supply is reflected in an increase in private expenditure while the rest is mainly used for accumulation of assets

demand shifts and market structure in free entry oligopoly equilibria abstract this papers examines the structural implications of demand shifts in free entry oligopoly equilibria the model generalizes the conjectural variations framework to consider asymmetric firm conjectures allows for the possibility of cost differences across firms and endogenizes conditions of entry and exit in the industry in non competitive environments changes in incumbent output and industry profitability are inversely related to changes in the equilibrium price following a demand shift in response to rotations of demand through the equilibrium point changes in profitability are positively related to changes in industry concentration and when marginal costs are non decreasing inversely related to changes in market power

duopoly information equilibrium cournot and bertrand abstract in a duopoly model where firms have private information about an uncertain linear demand it is shown that if the goods are substitutes not to share information is a dominant strategy for each firm in bertrand cournot competition if the goods are complements the result is reversed furthermore the following welfare results are obtained 1 i with substitutes in cournot competition the market outcome is never optimal with respect to information sharing but it may be optimal in bertrand competition if the products are good substitutes with complements the market outcome is always optimal 2 ii bertrand competition is more efficient than cournot competition 3 iii the private value of information to the firms is always positive but the social value of information is positive in cournot and negative in bertrand competition

analysis of a supply control program under uncertainty and imperfect competition chinese cabbage in taiwan researchers have often attributed the farm wholesale price spread after adjusting for marketing costs as compensation for marketing firms risk bearing however price spreads in excess of marketing costs can also be due to marketing firms exercise of market power in settings where both imperfect competition and marketer risk aversion are plausible a modeling framework must be sufficiently general to accommodate both types of behavior this article develops and estimates such a model in the context of fresh produce marketing and develops the implications for analysis of supply control programs the model is applied to the production and marketing of chinese cabbage in taiwan and specifically to the analysis of supply control programs implemented in this industry by the taiwanese government the empirical results provide little support for the hypothesis that marketing firms exhibit risk averse behavior but they do show that marketing firms exercise oligopsony power in procurement of the product from farmers and that this power is positively related to the quantity supplied in each market period this provides a heretofore unexplored impetus for supply controls intended to raise producer incomes however such controls are also rendered less effective by imperfect competition because marketing firms capture part of the benefits from supply reduction

behind closed doors revealing the ecb s decision rule abstract this paper aims at discovering the decision rule the governing council of the ecb uses to set interest rates we construct a taylor rule for each member of the council and for the euro area as a whole and aggregate the interest rates they produce using several classes of decision making mechanisms chairman dominance bargaining consensus voting and voting with a chairman we test alternative scenarios in which individual members of the council pursue either a national or a federal objective we then compare the interest rate path predicted by each scenario with the observed euro area s interest rate we find that scenarios in which all members of the governing council are assumed to pursue euro area wide objectives are dominated by scenarios in which decisions are made collectively by a council consisting of members pursuing national objectives the best performing scenario is the one in which individual members of the governing council follow national objectives bargain over the interest rate and their weights are based on their country s share of the zone s gdp

the seed and agricultural biotechnology industries in india an analysis of industry structure competition and policy options since the late 1980s technological advances and policy reforms have created new opportunities for private sector investment in india s seed and agricultural biotechnology industries these changes have had a significant impact on cotton yields and output in india but less so for rice and wheat the country s main cereal staples for which yield growth rates are tending toward stagnation this analysis examines the structures of these industries their potential effects on competition and innovation and the policies that may improve both industry performance and the delivery of new productivity enhancing technologies to india s cereal production systems our findings suggest that more substantive policy reforms are needed to encourage further innovation reduce regulatory uncertainty and encourage firm and industry level growth while continued public spending on agricultural research is needed to support technological change

measuring market power and cost efficiency effects of industrial concentration in this paper i show how appelbaum s framework for testing price taking behavior in a single industry can be formally extended to consider concentration explicitly in so doing i separate the market power effect of concentration from its cost efficiency effect data from the us beef packing industry are used to illustrate an empirical application of the model the findings support oligopsonistic market power and slaughter cost efficiency in the industry however the cost efficiency effect outweighs the market power effect

market and welfare effects of the u s livestock mandatory reporting act author affiliation kenneth njoroge department of accounting the fuqua school of business duke university box 90120 durham nc 27708 0120 usa kn14 duke eduamalia yiannaka department of agricultural economics 314d filley hall university of nebraska lincoln lincoln ne 68583 0922 usa yiannaka unl edukonstantinos giannakas department of agricultural economics 216 filley hall university of nebraska lincoln lincoln ne 68583 0922 usa kgiannakas unl eduazzeddine m azzam department of agricultural economics 103b filley hall university of nebraska lincoln lincoln ne 68583 0922 usa aazzam1 unl edu corresponding author acknowledgment senior authorship is shared authors names appear in reverse seniority order 1 introductionthe livestock mandatory reporting act the act was enacted in 2001 to provide market participants with information on all cash and noncash transactions reported by packers to the agricultural marketing service ams on a daily basis the information is aggregated under specific confidentiality guidelines1 to preserve the anonymity of the source2 and published in the mandatory livestock and meat market news reports reports 3 ams is responsible for setting the confidentiality guidelines as well as for enforcing the act as stated in the act federal register 2000 the reports intend to provide information that can be readily understood by producers packers and other market participants improve the price and supply reporting services of the department of agriculture and encourage competition in the marketplace for livestock and livestock products the rationale is that as more animals have been purchased under marketing arrangements neither the arrangements nor the final purchase prices are publicly disclosed 4about two years after the act went into effect schroeder grunwald and ward 2002 reviewed the early literature on livestock mandatory reporting lmr a consensus appeared to be forming that while lmr could be beneficial by reducing uncertainty and increasing competition in cattle markets revealing too much information about rival pricing could facilitate collusion and reduce competition among packers schroeder grunwald and ward 2002 p 11 the uncertainty reducing effect of lmr was deduced from two experimental studies by anderson et al 1998 and bastian koontz and menkhaus 2001 in the first experiment price and quantity information in the fed cattle market simulated through the fed cattle market simulator fcms 5 was varied and market outcomes were observed uncertainty measured by price dispersion was found to increase with the amount and type of information withheld in the second experiment also using the fcms market participants were provided with price and quantity information on cattle sold through the spot markets as well as through forward contracts the authors observed a substantial reduction in the variance of forward contract prices the effect of the forward market information on the variance of spot prices was negative but not statistically significant maintaining the hypothesis that mandatory reporting reduces uncertainty through the provision of more information azzam 2003 studied the effects of the reduction in uncertainty on the structure conduct and performance of livestock markets azzam s theoretical findings suggest that in a setting where cattle feeders and packers are risk averse and packers hold consistent conjectures increased transparency due to mandatory reporting promotes competition and results in higher livestock prices however since increased transparency can make it easier for packers to collude wachenheim and devuyst 2001 azzam s assumption of consistent conjectures is restrictive because it rules out the possibility of collusion njoroge 2003 provides a formal model of collusion that is in line with the arguments in wachenheim and devuyst 2001

changes in beef packers market power after the livestock mandatory price reporting act an agent based auction controversy remains about the effectiveness of the 1999 livestock mandatory price reporting act mpra we determine the likely changes in beef packers market power after the mpra by using an agent based first price common value auction past research has employed cournot models but we use an auction model which more closely resembles the actual cattle procurement process we find that feeders benefit from the mpra regardless of whether price uncertainty decreases for packers and or feeders if the packers price uncertainty is reduced the feeder benefits from an increase in competition between the packers if the feeder s price uncertainty is reduced the feeder benefits from imposing more accurate reserve prices copyright 2013 oxford university press

federalism and central bank independence the politics of german monetary policy 1957 92 two channels of political control allow elected politicians to influence monetary policy first political threats to the status structure or very existence of the central bank may force central bankers to comply with politically motivated demands on monetary policy second politicians may use their powers of appointment to ensure that central bank appointees share their electoral and party political goals this paper derives the monetary policy outcomes obtained as a function of the degree of central bank independence zero partial or full and central bankers types partisans or technocrats based on a case study of the 1957 and 1992 institutional changes to the german central banking system and a regression analysis covering the period in between i argue that the formal independence of the system is protected by its embeddedness in the institutions of german federalism and by the federalist components of its decentralized organizational structure the behavioral independence of the german central bank fluctuates over time with the party control of federalist veto points the bundesbank is staffed with nonpartisan technocrats who are partially insulated from political pressures

liberalization and food price distributions arch m evidence from madagascar abstract there is no well articulated theory of how stochastic food prices respond to economic liberalization measures a surprising oversight in the vast literature on market oriented reforms this paper presents reduced form estimates of the effects of liberalization measures on food commodity prices in madagascar using autoregressive conditional heteroskedastic in mean arch m methods the data indicate that the short term effects of liberalization on the mean and variance of food prices vary substantially by commodity region and season in the long term liberalization increases both the mean and the variance of food prices the abandonment of a quantity rationed state marketing system with administrative pricing also leads to smaller inter regional and interseasonal differences in mean food prices and a sharp increase in price autocorrelation real exchange rates have pronounced positive effects on mean food prices but these effects emerge indirectly rather than directly through induced changes to border parity prices

inventories and public information in private negotiation a laboratory market study using laboratory markets this research investigates the impacts of reporting different kinds of aggregated trade information to buyers and sellers who conduct transactions through bilateral private negotiation there are a limited number of bargaining rounds or matches between buyer and seller pairs sellers hold a perishable inventory before negotiations begin we find that knowledge of trades along with price improves the coordination and bargaining position of buyers trade prices are lower and buyer earnings are higher relative to the no information treatment or when just past quantities or just past prices are reported market efficiency declines as public information is reported copyright 2007 oxford university press

the savings growth nexus for the malaysian economy a view through rolling sub samples the purpose of this study is to re investigate the savings growth nexus for the malaysian economy using bounds testing approach to cointegration and toda and yamamoto 1995 and dolado and lutkepohl 1996 tydl granger causality test this study covered the sample period from 1971 q1 to 2008 q4 the cointegration results suggest that the variables are moving together in the long run and the tydl granger causality results indicate that the relationship between savings and economic growth is bilateral in addition the rolling sub samples tydl granger causality test exhibited a relatively stable causal relationship running from savings to economic growth in malaysia particularly before the onset of asian financial crisis in 1997 1998

risk averse duopolists and voluntary information transmission this paper considers the incentives for risk averse firms to share their private information they show that the introduction of risk aversion in some cases reverses the result in the literature that no such incentives exist further they show that the output level of risk averse cournot duopolists is increasing in the quality of their private information and decreasing in their perception of risk copyright 1989 by blackwell publishing ltd

capacity and competition empirical evidence on uk panel data following d kreps and j scheinkman 1983 it is common to view the difference between cournot and bertrand competition as depending on production capacity bertrand undercutting is only feasible if firms have capacity to serve the market gained if firms are capacity constrained the cournot model is more appropriate this paper tests the capacity and competition idea by looking at the relationship between profits and capacity constraints if capacity constrained firms become more cournot like it should be positive using survey data on capacity constraints merged into a panel industry data set for the united kingdom the authors find a robust positive relationship copyright 1994 by blackwell publishing ltd

estimating the degree of market power in the beef packing industry a technique for assessing the degree of monopoly power developed by appelbaum 1979 1982 is extended here to permit measurement of monopsony power as well data from the u s beef packing industry are examined the results reveal small but statistically significant monopoly monopsony price distortions in slaughter cattle and wholesale beef markets but in spite of a recent trend toward heightened concentration in the industry give no indication that performance has become appreciably less competitive of late this abstract was borrowed from another version of this item

efficiency of the multiplant multiproduct firm a general framework is provided for assessing the technology cost and efficient scale of a multiplant multiproduct firm we show sufficient conditions for the existence of a plant cost function and necessary and sufficient conditions for using plant level data to draw exact firm level cost inferences we also distinguish between plant and input nonjointness and show the optimal relation between plant level and firm level cost elasticity in a multiproduct setting the framework is applied to a vegetable processing cooperative which is found to operate below its efficient scale

checks and balances and the supply of central bank independence abstract the paper analyzes the institutional conditions under which policymakers can credibly commit to an independent central bank and thereby mitigate the well known time consistency problem in monetary policy it is shown theoretically that granting independence via a statute is only credible for legislative systems with at least two heterogeneous decision making bodies which both have veto rights for example bicameral systems this thesis is supported by empirical evidence the legal independence of central banks is significantly higher in those oecd countries whose legislative processes are characterized by extensive checks and balances furthermore the negative relation between legal independence and inflation is larger in countries with checks and balances than in countries without checks and balances

tax policy regulated interest rates and saving abstract the paper evaluates tax policy options designed to reduce distortions to savings behavior that occur when administered interest rates are set beneath market equilibrium levels while the removal of controls on interest rates might be the best option political legal or institutional circumstances might well preclude this solution it suggests that consumption or sales taxes can be designed so that in the short term the rate of return to saving can be changed to approximate the market determined interest rate the main advantage of the measure is that it can provide a time to develop appropriate legal and institutional structures for financial deregulation and b an additional policy instrument that allows the burden of adjustment in a stabilization policy setting to be distributed over more than one instrument

does anticipated monetary policy matter an econometric investigation a heated debate has arisen over the policy ineffectiveness proposition associate with the work of lucas sargent and wallace it postulates that anticipated aggregate demand policy will have no effect on business cycle fluctuations so that one deterministic feedback policy rule is as good as any other from the point of view of stabilizing the economy this paper develops a methodology for empirically analyzing rational expectations models displaying this neutrality result and then applies it to the important question of whether anticipated monetary policy matters to the business cycle

an empirical analysis of the effect of monetary disequilibria in open economies abstract a dynamic disequilibrium simultaneous equation econometric model for france and west germany is set up estimated and simulated to consider the ways in which disequilibrium in the money markets is eliminated the results provide suggestive evidence to support the monetary approach to the balance of payments

prices output and the trade balance in iran abstract this paper analyses the impact of the rise in oil prices on domestic inflation the trade balance and output growth in iran for the period 1960 1977 a macro framework is developed in which the domestic spending of oil revenues results in higher output inflation and imports our results indicate that although the overall growth remained high the rapid increase in oil revenues in 1973 1974 was mainly reflected in higher inflation and higher imports in the absence of any exchange rate adjustment there was a sharp deterioration in the competitive position of the non oil traded sector

imperfect competition in multiproduct food industries with application to pear processing agricultural product markets often involve relatively few firms processing a farm product into multiple processed products this market structure prompts concern that processing firms may exercise both oligopsony and oligopoly power the present paper develops and applies a methodology to test simultaneously for market power in both the raw input market and multiple processed output markets application of the methodology to california pear processing indicates the industry has exerted power in both its farm input market and the markets for canned pears and fruit cocktail

marketing margins market power and price uncertainty this paper provides a conceptual and empirical framework for analyzing marketing margins in a noncompetitive food processing industry facing output price uncertainty the framework allows the decomposition of observed margins into components reflecting the marginal cost of the processing industry oligopoly oligopsony price distortions and an output price risk component the empirical procedure is applied to a time series of spreads between wholesale pork prices and farm prices of market hogs the principal finding is that while farm wholesale margins are more consistent with competitive performance now than they were fifteen years ago the output price risk component persisted throughout the sample period

competition in the us meatpacking industry is it history the us meatpacking industry has become concentrated to a degree not experienced since the days of the beef trust a century ago a number of mainstream studies have investigated if such concentration has been detrimental to competition just as earlier studies may have helped shape competition policy towards meatpacking a century ago contemporary studies have made their way into current discussions and may shape competition policy at the turn of this century this paper asks whether or not contemporary studies are useful in informing competition policy after comparing how competition looks from the econometric vantage point with how it looks from the vantage point of the industry s 300 yr history this article concludes that mainstream studies are more useful for a competition policy targeting conduct rather than structure

the effect of barge and ocean freight price volatility in international grain markets this paper looks at the potential role of time varying volatility of mississippi river barge and ocean freight prices on commodity prices in illinois at the us gulf and in rotterdam using a vector error correction garch in mean model the model is used to infer the extent to which transportation price risk affects price dynamics in international grain markets results from a simulation exercise indicate that both barge and ocean price volatility influence grain prices but barge price volatility tends to have a greater impact on grain prices and marketing margins than that arising from ocean price volatility consistent with most studies that evaluate the role of risk in marketing channels results here suggest that a reduction in barge rate risk would reduce marketing margins between illinois and the us gulf and between the us gulf and rotterdam the existence of an ocean freight futures contract coupled with the lack of a futures contract for barge rates may be partially responsible for the finding that barge rates have a significant influence on grain prices and contribute most to wide marketing margins found throughout the international grain marketing system

asymmetric farm retail price transmission and market power a new test a finite mixture model is used to estimate farm retail price transmission in the us fresh strawberry market results suggest two distinct pricing regimes associated with off and peak harvesting seasons the market power parameter is significant in the peak harvest regime but not in the off peak regime moreover price changes are transmitted completely throughout the marketing channel in the off peak regime when the market power parameter is zero but not in the peak harvest regime when the market power parameter is positive this suggests that produce buyers are more apt to exercise market power when farm supplies are abundant than when they are scarce and that the exercise of such power causes the farm retail price linkage to become asymmetric

supply analysis in an oligopsony model primary agricultural markets are often characterized by oligopsony this paper investigates the effect of an agricultural product supply shift on the equilibrium prices and quantities of farm products purchased by food processors and on profits of food processors the principal comparative static result indicates that under oligopsony qualitative implications of a disturbance in the supply of raw input differ from that under perfect competition and monopsony effects of other disturbances are identical in sign to the perfectly competitive case although magnitudes may differ implications for supply estimation and agricultural policy analysis are briefly discussed

a critical assessment of supply demand models of agricultural trade we offer a critical assessment of static deterministic reduced form supply demand sd models of agricultural trade a commonly used and well documented model has significant limitations no explicit treatment of factor mobility between farm and nonfarm sectors nonzero profits in some sectors no substitutability among feedstuffs in livestock sectors violation of the law of one price small marketing margins for some commodities and incomplete coverage of the agricultural sector such limitations have significant impacts on the magnitude and direction of projected world price and welfare changes we believe agricultural policy analysis should first focus on the remediation of these limitations before proceeding to more complex issues like dynamics and uncertainty