stabilizing inflation in the open economy optimal monetary policy in the open economy continues to be of interest to the profession as in benavie and froyen 1 and price level stabilization has been investigated by bradley and jansen 4 marquis and cunningham 13 and fischer 6 among many others price level stabilization has also been investigated in the monetary policy literature by for example black 2 or black and gavin 3 the academic literature has included analysis of price level stabilization in a variety of macroeconomic frameworks ranging from overlapping generations models to equilibrium business cycle models and keynesian contracting models what has been lacking however is a rigorous analysis of price level stabilization in the open economy this apparent omission is interesting because the most famous historical application of price level targeting occurred in the 1930s in sweden a small open economy in this paper we carefully examine the effectiveness of price level or inflation stabilization in the small open economy 2 employing an equilibrium business cycle model with differentially informed agents we find that when shocks to the economy exhibit some persistence inflation stabilization has favorable output stabilization properties relative to alternative monetary policies further these beneficial aspects of inflation stabilization exist whether or not agents contemporaneously observe the money stock the only instance in which inflation stabilization policy is not preferred is when all shocks to the economy are strictly temporary shocks and when uninformed agents can not observe the money stock contemporaneously finally in all instances we find that price level stabilization is preferred from a macroeconomic stabilization perspective to exchange

on the transmission of world agricultural prices two questions are asked about the relationship between domestic prices and world prices of agricultural commodities are variations in world prices transmitted to domestic prices domestic prices are regressed on world prices in various forms taking into account the possible effects of exchange rates and inflation the empirical analysis is based on data from the food and agriculture organization of the united nations for 58 countries from 1968 78 and for the countries of the european community from 1961 85 the results show that most of the variations in world prices are transmitted and that they constitute the dominant component in the variations of domestic prices

a rational expectations model of agricultural supply this work suggests a dynamic linear rational expectations modeling strategy for using time series observations to study the impact of product prices on agricultural production and land allocation the farmer s decision consists of specifying each period the portion of his land to be devoted to the growing of alternative crops the dynamic element in the farmer s problem comes from the technology a quadratic production technology is used the farmer s optimal land allocation decision rules are derived as linear functions of past land allocations expectations of future product prices and other exogenous variables and they can be interpreted as an optimal crop rotation assuming rational expectations and the exogeneity of prices for a small open economy one obtains closed form linear regression equations representing decision rules and stochastic processes these are then estimated and tested using maximum likelihood methods and aggregate data from the egyptian agriculture

whose deletion does not affect your payoff the difference between the shapley value the egalitarian value the solidarity value and the banzhaf value abstract this study provides a unified axiomatic characterization method of one point solutions for cooperative games with transferable utilities any one point solution that satisfies efficiency the balanced cycle contributions property bcc and the axioms related to invariance under a player deletion is characterized as a corollary of our general result bcc is a weaker requirement than the well known balanced contributions property any one point solution that is both symmetric and linear satisfies bcc the invariance axioms necessitate that the deletion of a specific player from games does not affect the other players payoffs and this deletion is different with respect to solutions as corollaries of the above characterization result we are able to characterize the well known one point solutions the shapley egalitarian and solidarity values in a unified manner we also studied characterizations of an inefficient one point solution the banzhaf value that is a well known alternative to the shapley value

drivers and triggers of international food price spikes and volatility the objective of this study is to explore empirical evidence about the quantitative importance of supply demand and market shocks for price changes in international food commodity markets to this end it distinguishes between root conditional and internal drivers of price changes using three empirical models 1 a price spike model in which monthly food price returns spikes are estimated against oil prices supply and demand shocks and excessive speculative activity 2 a volatility model in which annualized monthly variability of food prices is estimated against the same set of variables plus a financial crisis index and 3 a trigger model that estimates extreme values of price spikes and volatility using quantile regressions the results point to increasing linkages between food energy and financial markets this explains much of the observed food price spikes and volatility while financial speculation amplifies short term price spikes oil price volatility intensifies medium term price volatility

how do inputs and weather drive wheat yield volatility the example of germany increases in cereals production risk are commonly related to increases in weather risk we analyze weather induced changes in wheat yield volatility as a systemic weather risk in germany we disentangle however the relative impacts of inputs and weather on regional yield volatility for this purpose we augment a production function with phenologically aggregated weather variables increasing volatility can be traced back to weather changes only in some regions on average inputs explain 49 of the total actual wheat yield volatility while weather explains 43 models with only weather variables deliver biased but reasonable approximations for climate impact research

bargaining and value we present and analyze a model of noncooperative bargaining among n participants applied to situations describable as games in coalitional form this leads to a unified solution theory for such games that has as special cases the shapley value in the transferable utility tu case the nash bargaining solution in the pure bargaining case and the recently introduced maschler owen consistent value in the general nontransferable utility ntu case moreover we show that any variation in a certain class of our bargaining procedure which generates the shapley value in the tu setup must yield the consistent value in the general ntu setup

market integration and price transmission in consumer markets of developing countries abstract world prices for agricultural commodities surged in 2006 08 and then again in 2011 12 in many developing countries consumer prices for staple foods such as bread and rice mirrored these movements this paper examines whether prices in urban consumer markets within developing countries are co integrated with prices in world agricultural commodity markets using a single equation error correction model we examine the response of consumer prices for wheat rice maize and sorghum to changes in world market prices and exchange rates in urban centers of the developing world analyzing over 60 country commodity pairings we find that developing countries consumer markets are co integrated with world markets yet we also find that the transmission of changes in both world prices and real exchange rates to domestic consumer prices is not high and that the movement of domestic consumer prices to new equilibrium with world prices after a shock to the latter is relatively slow

on weighted kalai samet solutions for non transferable utility coalitional form games abstract we investigate the implications of the axiom of coalitional concavity for non transferable utility coalitional form games this axiom says that if the feasible set of some coalition is uncertain whereas the feasible sets of other coalitions are known then all players in the coalition with the uncertain feasible set should weakly benefit from reaching a compromise before the uncertainty is resolved by imposing this axiom in addition to other minor axioms we characterize the weighted kalai samet econometrica 53 1985 307 solutions these solutions coincide with the weighted egalitarian solutions on the domain of bargaining problems and with the weighted shapley values on the domain of transferable utility coalitional form games

fixed versus flexible exchange rates in an equilibrium business cycle model abstract this essay re examines the question of which exchange rate regime is preferable using a rational expectations model that explicitly incorporates wealth and emphasizing the information signalling role of prices previous authors have stressed the argument that floating rates provide agents with an additional source of information which improves forecasting accuracy leading to more efficient allocations this paper adds the counterweighing argument that they also have the effect in contrast to fixed rates of introducing an additional source of monetary disturbances in the determination of real variables another issue addressed is the nature of exchange rate adjustments to monetary disturbances

a cointegration analysis of agricultural energy and bio fuel spot and futures prices this article features an analysis of the cointegration relationships among agricultural commodity ethanol and cushing crude oil spot and future prices the use of grains for the creation of bio fuels has sparked fears that these demands are inflating food prices we analyse approximately 10 years of daily spot and futures prices for corn wheat sugar ethanol and oil prices from datastream for the period 19 july 2006 to 2 july 2015 the analysis features engle granger pairwise cointegration and partial cointegration pairs of series that are cointegrated are analysed using markov switching vecm and impulse response analysis which confirms that these markets have significant linkages that vary according to whether they are in low or high volatility regimes

aggregate information and the role of monetary policy in an open economy a model of a small open economy in which agents trade in local goods markets and an economy wide asset market is developed purchasing power parity is assumed to hold at the aggregate level however because of local deviations from purchasing power parity agents possess differential information using this framework it is shown that when the exchange rate is flexible monetary policy can influence the distribution of real output by altering the information content of the exchange rate however when monetary policy is committed to fixing the exchange rate by a feedback rule the distribution of real output is independent of the particular exchange rate rule chosen the stability of real output under the two regimes is compared and it is demonstrated that regardless of the stability of domestic monetary policy a flexible exchange rate regime is superior in this respect possible qualifications and extensions of these results are also discussed

coalition formation and bargaining protocols a review of the literature this paper offers a review of the vast literature regarding bargaining and coalition formation this topic has been generally described as the attempt to provide strategic foundations to cooperative solution concepts it can therefore be seen as the linking ring between the non cooperative and the cooperative game theoretic approach to coalition formation its central role in economic theory and its relatively long history that goes back to the nash program have fostered a large academic production including surveys nonetheless this paper will focus on an aspect that is often neglected in the dedicated surveys the specificities of the bargaining protocols leading to different outcomes although generally downgraded to the rank of details the differences in bargaining protocols even when minor can cause significant changes in fundamental aspects such as the possibility to reach full cooperation the distribution of final pay offs and the time taken to reach an agreement focused on externalities free games therefore on bargaining protocols sustaining solution concepts for cooperative games in characteristic function form the paper aims at providing a brief but exhaustive review of the topic that could result in a very useful tool for any researcher approaching the subject of coalitional bargaining

dynamic agricultural supply response under economic transformation a case study of henan china during the dramatic economic transformation in the last few decades food demand in china has expanded due to rapid urbanization dietary change and steady population growth at the same time a decline in available land for agriculture has made grain selfsufficiency a major goal of chinese agriculture policy a considerable challenge the governmenthasimplementedcomprehensivepolicies to encourage domestic agricultural production including eliminating agricultural taxes and providing direct subsidies to farmers it remains unclear whether these policies are effective in stimulating food production there isanurgentneedforknowledgeonagricultural supply response to changes in prices policies and rural infrastructure in china which can guide policy formulation in the process of economic transformation if agriculture is highly responsive policy induced changes in farmers behavior can be effective in increasing production and ensuring long term food security in the country

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

war migration and the origins of the thai sex industry this paper analyzes the determinants behind the spatial distribution of the sex industry in thailand we relate the development of the sex industry to an early temporary demand shock i e u s military presence during the vietnam war comparing the surroundings of thai military bases used by the u s army to districts close to unused thai bases we find that there are currently 5 times more commercial sex workers in districts near former u s bases the development of the sex industry is also explained by a high price elasticity of supply due to female migration from regions affected by an agricultural crisis finally we study a consequence induced by the large numbers of sex workers in few red light districts the hiv outbreak in the early 1990s

the effects of commodity price stabilization programs in this paper the authors analyze the effects of commodity programs in which the government attempts to support and stabilize price through open market purchases and sales specifically they as sess the effects of such programs on the u s soybean market using a rational expectations model that allows for private storage expected price responsive production and arbitrary support and release price s a salient feature of the model is that private storage and product ion behavior adjusts to changes in government policy stochastic simu lations of the market model demonstrate that price stabilization prog rams can reduce long run market price and destabilize producer revenu e copyright 1988 by american economic association

bargaining in committees as an extension of nash s bargaining theory abstract this paper addresses the following issue if a set of agents bargain on a set of feasible alternatives in the shadow of a voting rule that is any agreement can be enforced if a winning coalition supports it what general agreements are likely to arise in other words what influence can the voting rule used to settle possibly nonunanimous agreements have on the outcome of consensus we model the situation as an extension of the nash bargaining problem in which an arbitrary voting rule replaces unanimity in this setting a natural extension of nash s solution is characterized

global growing area elasticities of key agricultural crops estimated using dynamic heterogeneous panel methods we estimate the short and long run global response of corn soybeans wheat and rice growing areas to output price changes allowing responses to vary across countries using methods from the panel time series literature our estimates of growing area response are considerably lower than estimates obtained using more traditional models previous findings appear biased due to the assumption of homogeneous response across countries our aggregate estimates of short and long run elasticities of four crop growing areas with respect to average price are 0 024 and 0 143 respectively crop specific results indicate that both corn and soybean growing areas are generally more responsive than wheat and rice for corn and soybeans the long run own price growing area elasticities are 0 274 and 0 793 respectively the long run own price elasticities for wheat and rice are 0 279 and 0 045 respectively the short run own price elasticities for corn and soybeans are 0 133 and 0 199 respectively which are higher than wheat 0 037 and rice 0 00001

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

agricultural supply response a survey abstract this paper surveys the literature on agricultural supply response to prices in developing countries empirical estimates of elasticities depend both on the methodology adopted and on country specific factors relating to technology economic structure and macro constraints the paper seeks to establish some general conclusions on supply responsiveness within these limitations supply response to output prices at the aggregate and at the crop levels is considered first crop specific acreage elasticities range between zero and 0 8 in the short run while long run elasticities tend to be higher between 0 3 and 1 2 yield elasticities are smaller and less stable than acreage elasticities clearly inter crop pricing can be relied upon to effect shifts in the commodity composition of agricultural output evidence also suggests that supply elasticities vary systematically with such factors as price and yield risks multiple cropping the importance of the crop farm incomes farm size tenancy and literacy the most controversial and important aspect of supply response is the effect on aggregate agricultural output of agriculture s terms of trade conventional time series estimates range from 0 1 to 0 3 a major cross country study reports an aggregate elasticity as high as 1 66 it is argued that cross country estimates are apt to exaggerate aggregate responsiveness while time series studies underestimate it somewhat for ldcs a tentative range of 0 4 to 0 5 seems plausible hence the distributive effects of the terms of trade are likely to be more significant than the allocative effects asian evidence shows that only a third of the inter country differences in fertilizer use can be attributed to fertilizer price policies provided new technologies and infrastructure are in place fertilizer subsidies can help in technology diffusion and in over coming credit constraints the choice between price supports and input subsidies will depend on a variety of country or situation specific factors nevertheless a significant general factor favoring price supports is that they can more easily be coupled with price stabilization goals than input subsidies though sparse the available evidence on the response of marketed surplus suggests that price policy is not a reliable instrument for regulating inter sectoral trade

towards a better estimation of agricultural supply elasticity the case of soya beans in brazil brazil is a major exporter of several agricultural commodities and has shown strong interest in agricultural trade negotiations for several commodities trade liberalization is expected to be followed by farmgate prices increase and to boost domestic production however in a country as big as brazil possible supply responses to price increase will probably strongly differ from one region to another this article focuses on soya beans for which brazil became a top exporter the panel data technique is used to estimate the soy bean supply response at national and regional level soya bean supply is shown to be very price elastic moreover soya bean supply own price elasticity is much higher in the center north regions than in the south of the country substitution between livestock and soya bean is also very significant in the center north region world agricultural trade models should take account for such regional variability of soya bean supply elasticity the results also allow us to discuss the iss

when do market games have transferable utility a pure exchange economy generates a market game in which the allocations achievable by any coalition are determined by the initial endowments of its members subject to certain regularity conditions it is shown that for a market game it is possible to find utility representations for each consumer so that the game can be treated as a game with transferable utility if and only if indirect utility of all consumers can be represented in the gorman polar form this is the class for which aggregate demand behaves as if it were the demand of a single consumer journal of economic literature classification numbers 021 022 cc 1985 academic press inc

worldwide acreage and yield response to international price change and volatility a dynamic panel data analysis for wheat rice corn and soybeans this study estimates a worldwide aggregate supply response for key agricultural commodities namely wheat rice corn and soybeans by employing a newly developed multi country crop and calendar specific seasonally disaggregated model with price changes and price volatility applied accordingly the findings reveal that although higher output prices serve as incentives to improve global crop supply as expected output price volatility acts as a disincentive depending on the crop the results show that own price supply elasticities range from about 0 05 to 0 40 output price volatility however has negative correlations with crop supply implying that farmers shift land other inputs and yield improving investments to crops with less volatile prices simulating the impact of price dynamics since 2006 we find that price risk has reduced the production response of wheat in particular and to a lesser extent rice thus dampening price incentive effects the simulation analysis shows that the increase in own crop price volatility during the 2006 2010 period has dampened yield by about 1 2 for the crops considered

estimating the supply response of cotton and cereal crops in smallholder production systems recent evidence from mali cotton is one of the most important crops in west africa and is a major catalyst of economic development in rural areas but the sector has suffered from a decline in the world cotton price after 1999 this article exploits an unusual data set following 82 farmers over 14 years from 1994 through 2007 to estimate a nerlovian supply response model for cotton maize sorghum and millet in long term rotation the resulting system of equations is estimated with two stage least squares 2sls showing that this sample of malian cotton producers have responded to prices in a relatively inelastic manner with supply elasticities only about one half of those estimated for producers in developed countries policy reforms could help producers respond more easily to prices changes as well as to raise average productivity levels

harsanyi values of large economies nonequivalence to competitive equilibria abstract we consider economies with many agents and compare the competitive equilibria and the value allocations of the resulting coalitional games in particular we provide a smooth and robust example where the value principle does not hold for the harsanyi ntu value there is a unique competitive equilibrium which however does not belong to the nonempty set of harsanyi value allocations journal of economic literature classification numbers c71 d51

perturbed adaptive dynamics in coalition form games abstract players adaptively learn how to bargain a characteristic function describes the available surplus the underlying bargaining game extends the nash demand game by allowing subcoalitions to reach an agreement players demands must be multiples of a money unit we show that stochastically stable allocations ssa i e allocations that are most stable to unlikely errors are a subset of the core uniqueness does not obtain even when the money unit becomes arbitrarily small nonetheless every ssa is related to the allocation that maximizes the product of players utilities over the core i e constrained egalitarian solution for tu games journal of economic literature classification numbers c71 c72 c78

output variability under monetary policy and exchange rate rules this paper examines the controversy concerning the relative desirability of fixed versus flexible exchange rates by examining whether a country can achieve a smaller variance of domestic output around its full employment path operating under an exchange rate rule or under a money supply rule the paper finds that neither policy will always dominate the other however it does find that if shocks in one market of the economy are large relative to shocks to other markets then one type of rule can be shown to dominate the other

crop supply dynamics and the illusion of partial adjustment we use field level data to estimate the response of corn and soybean acreage to price shocks our sample contains more than 8 million observations derived from satellite imagery and includes every cultivated field in iowa illinois and indiana we estimate that aggregate crop acreage responds more to price shocks in the short run than in the long run and we show theoretically how the benefits of crop rotation generate this response pattern in essence farmers who change crops due to a price shock have an incentive to switch back to the previous crop to capture the benefits of crop rotation our result contradicts the long held belief that agricultural supply responds gradually to price shocks through partial adjustment we would not have obtained this result had we used county level panel data standard econometric methods applied to county level data produce estimates consistent with partial adjustment we show that this apparent partial adjustment is illusory and we demonstrate how it arises from the fact that fields in the same county are more similar to each other than to fields in other counties this result underscores the importance of using models with appropriate micro foundations and cautions against inferring micro level rigidities from inertia in aggregate panel data our preferred estimate of the own price long run elasticity of corn acreage is 0 29 and the cross price elasticity is 0 22 the corresponding elasticities for soybean acreage are 0 26 and 0 33 our estimated short run elasticities are 37 larger than their long run counterparts

multilateral bargaining problems abstract in many situations in economics and political science there are gains from forming coalitions but conflict over which coalition to form and how to distribute the gains this paper presents an approach to such multilateral bargaining problems a solution to a multilateral bargaining problem specifies an agreement for each coalition that is consistent with the bargaining process in every coalition we establish the existence of such solutions show that they are determined by reservation prices and characterize these reservation prices as the payoffs of subgame perfect equilibrium outcomes of a non cooperative bargaining model journal of economic literature classification numbers c71 c72 c78

monotonicity of social welfare optima abstract this paper considers the problem of maximizing social welfare subject to participation constraints it is shown that for an income allocation method that maximizes a social welfare function there is a monotonic relationship between the incomes allocated to individual agents in a given coalition with at least three members and its participation constraint if and only if the aggregate income to that coalition is always maximized an impossibility result demonstrates that there is no welfare maximizing allocation method in which agents individual incomes monotonically increase in society s income thus for any such allocation method there are situations where some agents have incentives to prevent society in becoming richer

information aggregation and policy the function of monetary policy to alter the informational content of money price signals is examined in a model where traders can observe an economy wide financial signal and a local commodity price under a passive policy money demand disturbances which are not directly observable are shown to be confused with real productivity shocks and thereby preclude prices from fully reflecting all information even when the policy authority has no informational advantage prospective money growth feedback rules can improve the structure of available information applications of the rational expectations hypothesis to monetary theory have focused on the informational aspects of money price signals a key element of the models of lucas 1972 1975 barro 1976 and sargent and wallace 1975 is that agents have limited powers of information acquisition and use prices as imperfect summaries from the rest of the world those works have suggested that monetary policy can affect the informational content of observed price signals and thereby affect real variables in weiss 1980a it was shown systematic money growth feedback rules can contribute to economic efficiency when the money demands of one group are based on factors not directly observed by all in this context monetary policy can alter the information content transmitted from the informed to the uninformed through observation of nominal price signals a limitation of these analyses is the omission of economy wide financial signals clearly stock and bond prices are observed accurately and costlessly empirically there are strong comovements between financial signals and economic activity traditional keynesian theory argues that financial signals exert an important influence on output by affecting the demand for new capital goods understanding the informational role of such signals is crucial to any theory which explains fluctuations as arising from incomplete information the present analysis investigates the structure of available information with its implications for real variables in a model where agents trade on both an economy wide capital market and a local commodity market the model has positive implications for the comovements of money demand disturbances aggregate investment expected and realized returns as well as normative implications for the conduct of policy the structure of exogenous information in the model differs from that of my earlier paper rather than assuming two types of traders informed and uninformed the model considers traders to have symmetric although noisy exogenous private information in this framework the economy wide market both aggregates and transmits individuals information about an aggregate structural variable this modification is both analytically convenient and illustrates how noise in the price system alters the importance of public relative to private sources of information the idea that prices aggregate individual information was first formalized in grossman 1976 in that paper a non monetary model of a speculative market was developed in which the price system conveyed all relevant information so as to yield an efficient allocation however this feature was also shown to break down if prices are influenced by

a note on the nerlove model of agricultural supply response judged by the number of studies which follow a particular approach more or less closely nerlove s famous formulation of agricultural supply response is certainly one of the most successful econometric models introduced into the literature the surveys of askari and cummings 1976 1977 provide clear evidence even though they are restricted to the english literature they contain the results of well over one hundred empirical studies in the nerlovian tradition in examining askari and cummings very helpful summary tables one is unavoidably struck by some extreme discrepancies in long run supply elasticities found by different researchers for the same crops and regions and almost identical observation periods while such discrepancies may be due to different definitions of the key variables or to certain modifications of the basic model and thus to aspects which are extensively discussed by askari and cummings they might alternatively reflect a serious collinearity problem that appears to be built into the nerlove model and which may not be resolvable it is the purpose of this note to draw attention to this apparently largely overlooked problem briefly discuss its consequences and provide another empirical example in which the suggested collinearity may be responsible for obviously unreliable supply elasticity estimates

the choquet bargaining solutions abstract we axiomatically investigate the problem of rationalizing bargaining solutions by social welfare functions that are linear in every rank ordered subset of r n such functions the so called choquet integrals have been widely used in the theories of collective and individual choice we refer to bargaining solutions that can be rationalized by choquet integrals as choquet bargaining solutions our main result is a complete characterization of choquet bargaining solutions as a corollary of our main result we also obtain a characterization of the generalized gini bargaining solutions introduced by blackorby et al 1994 econometrica 62 1161 1178 journal of economic literature classification numbers d71 c78

household specific food price differentials and high value crop production in rural ghana using panel data from ghana we have examined the relationship between household specific producer consumer price differentials and rural household cropland allocation between food and high value crops we test the hypothesis that cereal price bands induce a shift of resources away from high value crop production making smallholders appear unresponsive to price incentives our results lend support to this hypothesis implying that a policy aiming at increasing farmers income through high value crop production may fail if hard and soft infrastructure does not improve in rural areas and if staple crop productivity does not increase significantly

risk aversion and yield uncertainty in duality models of production a mean variance approach a duality model of production is developed that endogenizes stochastic output decisions under risk aversion the model incorporates both yield and price uncertainty and nonlinear mean variance risk preferences this permits modeling of the firm s expected output supply and input demand decisions under risk and also in principle the firm s output variance decisions the duality model is tractable for empirical research

biofuels and land use change sugarcane and soybean acreage response in brazil scientists and economists are increasingly worried that biofuels production is leading to land use changes in the form of competition with food crops or loss of natural ecosystems i estimate acreage conversion in response to shocks in sugarcane a biofuels feedstock and soybean thought to be affected by united states corn ethanol production prices in brazil at a national and regional level using county level data from 1973 to 2005 i consider a dynamic panel data model of input demand for agricultural land conditioning on price changes of other commodities the short run crop price elasticity of sugarcane acreage in brazil is estimated to be approximately zero whereas the elasticity of soybean acreage is 0 9 when both spot and futures prices change the regional estimates for soybeans show considerable variation and are highest in areas of ecological importance such as the cerrado sugarcane estimates are more homogeneous these results should be taken into account in impact assessments of biofuels

futures prices in supply analysis are instrumental variables necessary citation nathan p hendricks joseph p janzen aaron smith futures prices in supply analysis are instrumental variables necessary american journal of agricultural economics volume 97 issue 1 1 january 2015 pages 22 39 https doi org 10 1093 ajae aau062

inter and intra seasonal crop acreage response to international food prices and implications of volatility understanding how producers make decisions to allot acreage among crops and how decisions about land use are affected by changes in prices and their volatility is fundamental for predicting the supply of staple crops and hence assessing the global food supply situation this study makes estimations of monthly i e seasonal versus annual global acreage response models for the world s principal staple food crops wheat corn soybeans and rice primary emphasis is given to the magnitude and speed of the allocation process estimation of intra annual acreage elasticity is crucial for expected food supply and for input demand especially in the light of the recent short term volatility in food prices the econometric results indicate that global crop acreage responds to crop prices and price risks input costs as well as a time trend depending on respective crop short run elasticities are about 0 05 to 0 40 price volatility tends to reduce acreage for some of the crops comparison of the annual and the monthly acreage response elasticities suggests that acreage adjusts seasonally around the globe to new information and expectations given the seasonality of agriculture time is of an essence for acreage response the analysis indicates that acreage allocation is more sensitive to prices in the northern hemisphere spring than in winter and the response varies across months

bargaining with uncertain disagreement points much of the uncertainty concerning the likely outcome of a typical management labor conflict pertains to the cost of possible conflict to the two sides in this paper we consider situations of this kind where the cost of conflict is not known with certainty however we will assume the benefits from cooperation to be known we place our analysis in the abstract framework formulated by nash 1950 nash described a bargaining problem as a pair consisting of a feasible set the amount to be divided among management and labor and a disagreement point giving the payoffs to both sides when they fail to reach agreement on a division that is the strike nash investigated the existence of solutions to such problems that would satisfy a certain list of appealing properties in his analysis both feasible set and disagreement point were assumed to be known here we assume only the feasible set to be known several studies have appeared of bargaining situations where the feasible set is unknown but the disagreement point is known while we are of course not denying the relevance of such studies we believe that an analysis of situations where it is the consequences of conflict that are unknown might be equally and perhaps even more relevant to industrial experience indeed consider a management labor conflict over wages and benefits in many industries the future profitability of the enterprise can be predicted with reasonable accuracy on the basis of its performance in the previous years whereas the impact of a strike might depend on a number of factors that are significantly harder to evaluate this is because strikes are infrequent and conjectures about these factors are often not put to the test a strike is a threat that is often not carried out and because they involve a number of parameters that are difficult to quantify such as the psychological readiness of the strikers the support they might receive from the population and the media and the likely response of competing and related industries we impose on solutions a new condition of disagreement point concavity guaranteeing that agents will agree on a compromise before the uncertainty concerning the disagreement point is resolved to illustrate this requirement somewhat more concretely suppose that bargaining takes place today without the precise location of the disagreement point being known this uncertainty being resolved tomorrow the bargainers have two options the first option is simply to wait until tomorrow and solve then whatever problem has come up unfortunately the resulting pair of contingent compromises evaluated today is in general strictly pareto dominated the other possibility is to solve today the problem obtained by replacing the uncertain disagreement point by its expected value this represents the cost of conflict evaluated today and to solve the resulting problem today this second option has the advantage of yielding paretoundominated compromises provided of course that agents would in the case of no uncertainty select such compromises but unfortunately it may make one of the agents worse off than under the first option in order to ensure that all agents agree to reaching a compromise today we require that the second option always pareto dominate the first one we show that disagreement point concavity when used in conjunction with three standard properties that are satisfied by virtually all of the solutions commonly discussed

world supply and demand of food commodity calories between the summers of 2006 and 2008 corn prices more than tripled from roughly 2 50 bushel to nearly 8 00 bushel prices for rice soybeans and wheat rose by similar or greater amounts the exceptionally large and unanticipated rise in prices was attributed to many factors including 1 ethanol subsidies 2 commensurately rising oil prices 3 unexpectedly large demand growth from china and india and 4 weatherrelated factors such as drought in australia while some have argued that the commodity price boom much like earlier housing and stock market booms were due to a

monetary policy and the information content of prices rational expectations and cleared markets lead to the proposition that feedback monetary policy is irrelevant to real activity as in the analyses of sargent and wallace however if agents are differentially informed and have access to a common price then prospective monetary policy actions future feedback to imperfectly known current circumstances can alter real activity by changing the information content of prices

estimating supply response in the presence of farm programs previous empirical research on crop supply response has given insufficient attention to the fundamentally different nature of supply response under farm programs versus competitive markets a simple theoretical model is presented which highlights the program participation option in the farmer s acreage allocation decision the model also provides the basis for different expected supply elasticities under free market and farm program regimes for corn and soybeans econometric supply estimation for corn belt states for 1948 80 using a temporally disaggregated approach confirms a greater supply elasticity for corn and a lower supply elasticity for soybeans under acreage restricting feed grain programs

quasi rational and ex ante price expectations in commodity supply models an empirical analysis of the us broiler market a statistically optimal inference about agents ex ante price expectations within the us broiler market is derived using futures prices of related commodities along with a quasi rational forecasting regression equation the modelling approach which builds on a hamilton type framework includes endogenous production and allows expected cash price to be decomposed into anticipated and unanticipated components we therefore infer the relative importance of various informational sources in expectation formation results show that in addition to the quasi rational forecast the true supply shock future prices and ex post commodity price forecast errors have at times been influential in broiler producers price expectations copyright 2003 john wiley sons ltd

egalitarian solutions and uncertain disagreement points abstract we consider bargaining problems with uncertain disagreement points we search for solutions providing agents the incentive to reach agreements before the uncertainty is resolved we identify the weighted egalitarian solutions as being the only ones in the family of directional solutions characterized in an earlier paper chun and thomson 1987 to satisfy three alternative lists of complementary conditions we also show that on the class of coalitional form games the kalai samet 1985 extension of the egalitarian solutions does not provide this incentive for early agreement

axiomatic bargaining theory on economic environments abstract axiomatic bargaining theory is reexamined by focusing upon the economic exhange environment instead of the traditional utility possibility set it is argued that the axioms of the traditional theory impose stronger restrictions than can be supported by their motivating economic intuitions weaker alternative axioms making explicit use of economic information are used to characterize the standard bargaining solutions a key idea is to impose consistency of the solution with respect to changes in the dimension of the commodity space even these weaker economic axioms however may be unrealistic restrictions to impose on the bargaining solution in the context of many economic bargaining problems

monotonic solutions to general cooperative games etude de jeux cooperatifs qui sont des jeux a plusieurs joueurs mis sous la forme de coalition dans lesquels l utilite n est pas supposee etre transferable

on information and market dynamics the case of the u s beef market abstract the paper investigates the nature of dynamic prices and expectations in a competitive market the approach is applied to the u s beef market which exhibits cyclical patterns and significant biological lags in the production process beef price equations are estimated under different expectation regimes the empirical results indicate the presence of heterogeneous price expectations with a significant number of market participants neglecting information about the existence of a beef cycle

long term crop productivity response and its interaction with cereal markets and energy prices abstract crop yields are endogenous as long as economic agents adjust to permanent changes in expected prices the literature however does not offer a definitive value of how much yield would change in response to sustained price changes to fill the gap we use available scientific findings and data to estimate yield elasticities that enable agricultural commodity and food policy analysis using a world market model with short to long run yield response we show the impacts of sustained energy price shocks on global cereal supply and demand the results highlight substantial differences in quantity and price effects depending on the yield elasticities these results demonstrate the need to recognize yield response when assessing impacts of energy prices or biofuel production on food uses or more generally on food security in the face of income and population growth evolving dietary patterns climate change implications or other long run pressures

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

monetary instruments and policy rules in a rational expectations environment abstract this paper explores the implications of rational expectations and the aggregate supply theory advanced by lucas 1973 and barro 1976 for analysis of optimal monetary policy under uncertainty along the lines of poole 1970 returning to a topic initially treated by sargent and wallace 1975 not surprisingly these two classical concepts alter both the menu of feasible policy choice and the desirability of certain policy actions in our setup unlike that of sargent and wallace 1975 the systematic component of monetary policy is a relevant determinant of the magnitude of business fluctuations that arise from shocks to the system central bank behavior both the selection of monetary instruments and the framing of overall policy response to economic conditions can work to diminish or increase the magnitude of business fluctuations however the activist policies stressed by the present discussion bear little if any relationship to the policy options rationalized by the conventional analysis of monetary policy under uncertainty in particular in contrast to poole s analysis money supply responses to the nominal interest rate are not important determinants of real economic activity rather the central bank should focus on policies that make movements in the general price level readily identifiable by economic agents

constrained egalitarian allocations abstract this paper proposes a constrained egalitarian solution concept for tu games which combines commitment for egalitarianism and promotion of individual interests in a consistent manner the paper shows that the set of constrained egalitarian allocations is nonempty for weakly super additive games the solution is almost unique if the desirability relation between players is complete

identifying supply and demand elasticities of agricultural commodities implications for the us ethanol mandate we present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters in the agricultural context past yield shocks change inventory levels and futures prices of agricultural commodities we use our estimated elasticities to evaluate the impact of the 2009 renewable fuel standard on commodity prices quantities and food consumers surplus for the four basic staples corn rice soybeans and wheat prices increase 20 per cent if one third of commodities used to produce ethanol are recycled as feedstock with a positively skewed 95 percent confidence interval that ranges from 14 to 35 per cent jel q11 q16 q42 q48