the differential regional effects of monetary policy this paper examines whether monetary policy has similar effects across regions in the united states impulse response functions from an estimated structural vector autoregression reveal a core of regions new england mideast plains southeast and the far west that respond to monetary policy changes in ways that closely approximate the u s average response of the three noncore regions one great lakes is noticeably more sensitive to monetary policy changes and two southwest and rocky mountains are found to be much less sensitive a state level version of the model is estimated and used to provide evidence on the channels for monetary policy

information transmission cournot and bertrand equilibria we examine how incentives for two duopolists to honestly share information change depending upon the nature of competition cournot or bertrand and the nature of the information structure while in earlier papers uncertainty is about an unknown common demand intercept in the present paper uncertainty is about unknown private costs the different information structure reverses the incentives to share information while with unknown common demand sharing is a dominant strategy with bertrand competition and concealing is a dominant strategy with cournot competition with unknown private costs sharing is a dominant strategy with cournot competition and concealing is a dominant strategy with bertrand competition

the spatial and temporal diffusion of house prices in the uk abstract this paper provides a method for the analysis of the spatial and temporal diffusion of shocks in a dynamic system we use changes in real house prices within the uk economy at the level of regions to illustrate its use adjustment to shocks involves both a region specific and a spatial effect shocks to a dominant region london are propagated contemporaneously and spatially to other regions they in turn impact on other regions with a delay we allow for lagged effects to echo back to the dominant region london in turn is influenced by international developments through its link to new york and other financial centers it is shown that new york house prices have a direct effect on london house prices we analyse the effect of shocks using generalised spatio temporal impulse responses these highlight the diffusion of shocks both over time as with the conventional impulse responses and over space

monetary policy housing and heterogeneous regional markets we quantify the importance of heterogeneity for monetary policy using a new heterogeneous agent var havar model that integrates national monetary financial markets with regional housing markets via the mortgage rate although the havar model has linear regional vars its aggregate impulse responses exhibit two nonlinearities 1 time variation stemming from aggregation over heterogeneous regions and 2 state dependence on initial economic conditions in regions thus monetary policy has long and variable lags because monetary transmission depends on the extent and nature of regional heterogeneity which both vary over time the model is estimated with data for u s regions from 1986 to 1996 and simulated to show how coastal housing booms might influence the efficacy of monetary policy

cournot and bertrand equilibria compared substitutability complementarity and concavity abstract this paper assesses the view that bertrand equilibrium is intrinsically more competitive than cournot equilibrium we consider an oligopoly model with linear demand and a mixture of substitute and complementary products our results provide support for the conventional wisdom and also indicate its limitations we provide counter examples showing that no clear cut comparison of prices and quantities is possible without strategic complementarity in either of the two games however price competition is indeed more competitive according to the following criteria lower mark up output ratios larger average output and lower average price

the impact of the global food crisis on self assessed food security the paper provides the first large scale survey based evidence on the impact of the global food crisis of 2007 08 using an indicator of self assessed food security from the gallup world poll for the sampled countries as a whole this subjective indicator of food security remained the same or even improved seemingly owing to a combination of strong economic growth and limited food inflation in some of the most populous countries particularly india however these favorable global trends mask divergent trends at the national and regional levels with a number of countries reporting substantial deterioration in food security the impacts of the global crisis therefore appear to be highly context specific

global oil prices and local food prices evidence from east africa it is widely believed that oil prices impact food prices in developing countries yet rigorous evidence on this relationship is scarce using maize and petrol price data from east africa we show that global oil prices do affect food prices but primarily through transport costs rather than through biofuel or production cost channels we find that global oil prices transmit much more rapidly to the pump and then to local maize prices than do global maize prices suggesting that the immediate effects of correlated commodity price shocks on local food prices are driven more by transport costs than by the prices of the grains themselves furthermore we present suggestive evidence that for markets furthest inland changes in world oil prices have larger effects on local maize prices than do changes in world maize prices

pro poor trade policy in sub saharan africa abstract this paper examines the presence of a pro poor bias in the existing structure of protection of six sub saharan african ssa countries burkina faso cameroon cote d ivoire ethiopia gambia and madagascar we build on a simple agricultural household production model and we propose an extension to include adjustments in labor income our approach which can be implemented without repeated cross sections of household level data suits well the data constraints in ssa it also allows us to capture the heterogeneity in trade protection at the tariff line level the pro poor bias indicators suggest that ssa s trade policies tend to be biased in favor of poor households as these policies redistribute income from rich to poor households this is because protection increases the agricultural prices of goods that are sold by african households and this effect dominates both the impacts of higher consumption prices and the strong stolper samuelson effects that benefit skilled over unskilled workers

monitoring global and national food price crises this paper develops calibrates and runs a new food price crisis monitoring framework the proposed framework has an integrated approach to capture global and national vulnerabilities and offers an alternative to existing food insecurity information systems which suffer from a lack of consensus on the definition of food crisis the framework successfully identifies the recent episodes of food price crises in 2008 2011 and 2012 this paper also recommends ways in which the framework could be refined to increase country coverage and provide better information on country level food inflation

international prices costs and markup differences relative cross border retail prices in a common currency comove closely with the nominal exchange rate using product level prices and wholesale costs from a grocery chain operating in the united states and canada we decompose this variation into relative costs and markup components the high correlation of nominal and real exchange rates is driven mainly by changes in relative costs national borders segment markets retail prices respond to changes in costs in neighboring stores within the same country but not across the border prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries jel f31 l11 l81

international commodity prices growth and the outbreak of civil war in sub saharan africa to learn more about the effect of economic conditions on civil war we examine whether sub saharan civil wars are more likely to start following downturns in the international price of countries main export commodities the data show a robust effect of commodity price downturns on the outbreak of civil wars we also find that sub saharan countries are more likely to see civil wars following economic downturns in their main oecd export destinations

a dynamic model of differentiated oligopoly with capital accumulation abstract we consider a dynamic model of differentiated oligopoly with capital accumulation we prove that the model may converge to either a steady state replicating the optimum of the static problem or a steady state driven by capital accumulation alone in the latter case the same steady state equilibrium is observed under both cournot and bertrand competition as well as social planning journal of economic literature classifications numbers c73 l13

regional heterogeneity and the trans regional interaction of housing prices and inflation evidence from china s 35 major cities this paper proposes a theoretical framework to analyse the regionally heterogeneous responses of housing prices and inflation to the monetary aggregates shock and the trans regional interaction of housing prices and inflation which has seldom been discussed in previous literature using a gvar globe vector autoregression model evidence based on china s 35 major cities for this framework is provided the results show that 1 the housing price shocks have weak positive influence on cpis consumer price index 2 the housing price shocks especially the shocks in first tier cities and eastern cities have strong positive influence on domestic housing price dynamics and housing prices of other cities 3 monetary aggregates shock has strong influence on the housing prices of first tier cities and eastern cities while weak influence on that of central and western cities cpis are barely influenced by monetary aggregates shocks the empirical results are in accordance with the theoretical explanation

price versus quantity rules in dynamic competition the case of nonrenewable natural resources price and quantity competition are compared in the dynamic game framework of a nonrenewable natural resource duopoly it is shown that a price decision rule quantity decision rule strategy dominates in terms of a higher present value of the initial resource stocks if the resources are complements substitutes this result is shown to hold for subgame perfect equilibria it holds although equilibrium price paths resulting from those two types of strategies will cross it is shown however that even though the price trajectories cross initial equilibrium prices resulting from the price rule strategy will be lower than the initial equilibrium prices resulting from the quantity rule strategy copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

spatial equilibrium and price transmission between southern african maize markets connected by informal trade policies regulating the international grain trade in southern africa sa are motivated by uncertainty regarding private sector performance and in turn private sector performance is generally constrained by the policy environment we study spatial price transmission between sa maize markets where trade is dominated by informal product flows this provides an opportunity to study private sector market performance in a largely unregulated market environment contrary to some existing evidence on the performance of sa grain markets connected by formal trade we find that informally trading markets work quite well long run price equilibrium is consistent with competitive trade price transmission is rapid and potential trade constraints have no disruptive impact on long run relationships nevertheless we do find evidence of occasionally high transfer costs that may impede informal trade flows the conclusion is that a policy focus on encouraging informal trade and lowering informal trade costs would lead to improved market performance

spatial integration transport costs and the response of local prices to policy changes in ghana abstract this paper investigates the respective roles of spatial integration and transport costs in explaining price changes in ghana we introduce a model of price formation and market integration that incorporates the price transmission process between local and central markets and also captures the implications for volatility of local prices we explore the implications of the model for the time path of price adjustments as determined directly and indirectly through the marketing sector we show that the price adjustment process in a local market is determined by the degree of interdependence between that market and the central market in which a price shock originates and estimate the intertemporal and interspatial dynamics of the price adjustment process using data from wholesale maize markets in ghana we find that reductions in local prices and local price variance following the introduction of economic reforms in 1983 can be traced to both local and central market forces but that differences in the degree of market integration have important implications for long run changes in transport costs and the evolution of prices in outlying markets

on the microeconomic foundations of linear demand for differentiated products abstract this paper provides a thorough exploration of the microeconomic foundations for the multi variate linear demand function for differentiated products which is widely used in industrial organization the setting is the standard representative consumer with a quasi linear utility function a key finding is that strict concavity of the quadratic utility function is critical for the demand system to be well defined otherwise the true demand function may be quite complex multi valued non linear and income dependent we uncover failures of duality relationships between substitute products and complementary products as well as the incompatibility between high levels of complementarity and concavity the two good case emerges as a special case with strong but non robust properties a key implication is that all conclusions derived in applied economic models via the use of linear demand that does not satisfy the law of demand ought to be regarded with some suspicion

negotiations and exclusivity contracts for advertising exclusive advertising on a given media outlet is usually profitable for an advertiser because consumers are less aware of competing products however for such arrangements to exist media must benefit as well we examine conditions under which such exclusive advertising contracts benefit both advertisers and media outlets referred to as stations by illustrating that exclusive equilibria arise in a theoretical model of the media advertisers and consumers who participate in both the product and media markets in the model stations sell advertising space to advertisers and broadcast advertising messages to consumers conditions leading to higher equilibrium levels of advertising can be unprofitable for advertisers because high levels of advertising make consumers better informed and thus lead to fiercer product price competition as a result media stations may be less profitable as well because their payoff is determined as a fraction of the advertiser surplus generated in the product market stations mitigate this effect by offering advertisers exclusive advertising contracts with such contracts consumers are less informed about competing products yielding higher producer surplus it is profitable for stations to offer exclusivity when commercial advertising is an important means for advertisers to inform consumers about their products

the provision of information in a bertrand oligopoly a two stage model of a homogeneous good oligopoly is constructed that is composed of a first stage determining costless information provision to consumers and then a second stage of price setting a perfect equilibrium is found that is characterized by les s than full information and by positive expected profits an alternati ve interpretation of the model is of firms deciding the proportion of contracts to tender for and then the prices at which the tenders wil l be made copyright 1993 by blackwell publishing ltd

a variance components approach to food grain market integration in northern nigeria a variance components methodology is developed for joint tests on a sample of time series of prices for seasonal differences in the price integration of markets the approach requires a statistically adequate number of observations for each market within seasons characterized by constancy of transactions costs among markets the model is applied to eighteen months of weekly grain prices for twenty two villages in northern nigeria results suggest that markets are not well integrated in the six months covering the harvest period implications are drawn for research on market performance in the region

outsourcing vertical integration and price vs quantity competition abstract we show that standard conclusions about duopoly competition can be reversed when the production of key inputs is outsourced to a vertically integrated retail competitor with upstream market power under such outsourcing bertrand competition can produce higher prices higher industry profit lower consumer surplus and lower total surplus than cournot competition in addition to limiting the intensity of retail competition bertrand competition can limit the extent of wholesale competition by reducing the incentive of retail providers to produce key inputs themselves

wheat export restrictions and domestic market effects in russia and ukraine during the food crisis abstract studies investigating the effects of wheat export controls on the domestic market in the exporting country itself are scarce this paper analyses the domestic market impact of wheat export controls in russia and ukraine during the 2007 2008 global food crisis within a spatial price transmission approach using a markov switching vector error correction model we contrast our estimation for russia and ukraine with germany and the usa two countries that did not intervene in their wheat export markets an explicit crisis regime during times of export controls is exclusively identified for russia and ukraine we find that export restrictions temporarily reduced the degree of integration of russian and ukrainian domestic markets in world wheat markets which pushed the growers prices below their long run equilibrium level further domestic markets were disconnected from their equilibrium and market instability increased these effects were even more pronounced and long lasting in ukraine export quota than in russia export tax the negative market effects discouraged private investors thereby preventing russia and ukraine from maximizing their grain potential and contributing to global food security

regional housing price cycles a spatio temporal analysis using us state level data kuethe t h and pede v o regional housing price cycles a spatio temporal analysis using us state level data regional studies a study is presented of the effects of macroeconomic shocks on housing prices in the western united states using quarterly state level data from 1988 1 to 2007 4 the study contributes to the existing literature by explicitly incorporating locational spillovers through a spatial econometric adaptation of vector autoregression spvar the results suggest these spillovers may granger cause housing price movements in a large number of cases spvar provides additional insights through impulse response functions that demonstrate the effects of macroeconomic events in different neighbouring locations in addition it is demonstrated that including spatial information leads to significantly lower mean square forecast errors kuethe t h et pede v o la variation cyclique regionale du prix du logement une analyse geographico temporelle des donnees sur les etats aux e u regional s

the monetary transmission mechanism an empirical framework this paper provides an overview of the monetary transmission mechanism describing the impact of changes in monetary policy on real gdp changes in financial market prices including long term interest rates and exchange rates are the main vehicle for the transmission of policy the framework incorporates rational expectations and policy rules it is empirical and appears to fit the facts well

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

the effects of price deregulation on maize marketing margins in south africa abstract there has been continuous controversy over the impact of food market reforms on food security in africa in south africa the government and media have often questioned the effects of price deregulation of maize meal the major staple food on consumers this article determines the effect of retail price deregulation on the size of maize milling retail margins in south africa regression models of monthly milling retail margins are run from the period may 1976 to december 2004 to assess the robustness of our findings we estimate several different models of structural change vary the sample period to examine the sensitivity of findings to unusual weather and market conditions in the region during episodes between 2001 and 2004 and run the models using different estimation techniques ols with newey west robust estimators and feasible general least squares in virtually all models the results indicate that real maize milling retailing margins in south africa have increased by at least 20 since the deregulation of retail prices in 1991 moreover there is evidence of trend growth in the size of the milling margin over time simulations indicate that the deregulation of maize meal prices has entailed a transfer of at least us 179 million year from consumers to agents in the marketing system further study is needed to understand why this outcome in south africa differs from findings in other countries in the region concerning the effects of reform on food marketing margins

can openness mitigate the effects of weather shocks evidence from india s famine era transformation of countries throughout history rural citizens in developing countries today however remain highly exposed to fluctua tions in the weather this exposure affects the incomes these citizens earn and the prices of the foods they eat recent work has documented the significant mortality stress that rural house holds face in times of adverse weather robin burgess olivier deschenes dave donaldson and michael greenstone 2009 masayuki kudamatsu torsten persson and david stromberg 2009 famines times of acutely low nominal agricultural income and acutely high food prices are an extreme manifestation of this mapping from weather to death lilian c a knowles 1924 describes these events as agricultural lockouts where both food sup plies and agricultural employment on which the bulk of the rural population depends plummet the result is catastrophic with widespread hun ger and loss of life though now confined to the world s poor est countries food shortages and famines were features of most preindustrial societies over time there has been intense debate over what role openness to trade in food might play in

strategic underinvestment in informative advertising the cases of substitutes and complements the authors analyze the strategic pricing and informative advertising decisions made by firms in duopolistic contexts they show that whether the products are substitutes or complements there exist strategic settings in which firms keep potential consumers uninformed about their products even if the advertising cost is zero

technical note a comparison of bertrand and cournot profits in oligopolies with differentiated products we compare equilibrium profits of bertrand price and cournot quantity competition in oligopolies with an arbitrary number of nonsymmetric firms offering differentiated substitutable products under an affine demand function we provide a precise characterization of the profit relationship in terms of 1 the number of firms 2 their relative quality and cost differences and 3 the competition intensity defined as the maxiumum absolute value of total change in competitors demand over change in own demand due to a unit change in own price we first examine the case where firms have the same demand sensitivity to own price and the same demand sensitivity to competitor prices but different cost and quality parameters for this case we prove that the total profit of the industry under cournot competition is at least as high as the total profit under bertrand competition if the number of firms is less than 28 or if the competition intensity is less than 0 909 or if the differences in quality and cost competitiveness between firms are small we also prove that for each firm the profit achieved under cournot competition is at least as high as the profit achieved under bertrand competition if the number of firms is less than eight or if the competition intensity is less than 0 739 we then provide numerical and analytical results that qualitatively support the same conclusions for general affine demand functions with variable demand sensitivities to prices

market analysis methods are our enriched toolkits well suited to enlivened markets the past fifteen years have brought historic reduction of government intervention in agricultural markets in the developing world most economists and policy makers believe these reforms enliven markets previously fettered by excessive government authority nonetheless the impact of market oriented reforms on the spatial and intertemporal extent and the competitiveness of markets remains an inherently empirical question meanwhile there also have been major innovations in methods used to analyze markets and prices due largely to the rapidly emerging time series econometric literature agricultural economists toolkits have changed nearly as rapidly and dramatically as have developing economy markets but can these enriched toolkits answer the

comparing bertrand and cournot in mixed markets abstract we revisit the classic comparison between bertrand and cournot outcomes in a mixed market with private and public firms the results are often strikingly different and opposite to the ones obtained from a similar comparison in the standard setting with all profit maximizing firms

equilibrium prices in the bertrand and cournot oligopolies abstract the equilibrium prices for the bertrand and cournot oligopolies with product differentiation are compared if all firms have linear demand and cost functions and if in addition the jacobian matrix of the demand functions has a dominant negative diagonal the cournot equilibrium prices are not lower than the bertrand ones the general condition for the comparison of the bertrand and cournot equilibrium prices can be derived even if the nonlinearity is involved in the cost and or demand functions

price vs quantity competition in oligopoly supergames abstract in a repeated oligopoly with differentiated products and firms following trigger strategies quantity competition leads to a less efficient outcome than price competition this result contrasts with the repeated duopoly result where price competition is less efficient under certain conditions

is there long run convergence among regional house prices in the uk this paper investigates the long run convergence of regional house prices in the uk existing studies have failed to reach a consensus on whether or not regional house prices exhibit long run convergence with each other the application is proposed of a new test involving unit root testing of the first principal component based on regional national house price differentials using mix adjusted quarterly data for 1973 2006 it is found that the first principal component is stationary this suggests that all uk regional house prices are driven by a single common stochastic trend further analysis suggests that those regions that are more distant from london exhibit the highest degrees of persistence with respect to deviations in house price differentials

on the efficiency of bertrand and cournot equilibria with product differentation in a differentiated products setting with n varieties it is shown under certain regularity conditions that if the demand structure is symmetric and bertrand and cournot equilibria are unique then prices and profits are larger and quantities smaller in cournot than in bertrand competition and as n grows both equilibria converge to the efficient outcome at a rate of at least 1n if bertrand reaction functions slope upwards and are continuous then even with an asymmetric demand structure given any cournot equilibrium price vector one can find a bertrand equilibrium with lower prices in particular if the bertrand equilibrium is unique then it has lower prices than any cournot equilibrium

choice set heterogeneity and the role of advertising an analysis with micro and macro data abstract the authors show how to use microlevel survey data from a tracking study on brand awareness in conjunction with data on sales and advertising expenditures to improve the specification estimation and interpretation of aggregate discrete choice models of demand in a departure from the commonly made full information assumption they incorporate limited information in the form of choice sets to reflect that consumers may not be aware of all available brands at purchase time they find that both the estimated brand constants and the price coefficient are biased downward when consumer heterogeneity in choice sets is ignored these biased estimates can lead firms to make costly price setting mistakes in addition the tracking data enable the authors to identify separately two processes by which advertising influences market shares they find that advertising has a direct effect on brand awareness inclusion in choice set in addition to its effect on consumer preferences increase in utility this

informative price advertising in a sequential search model the purpose of this paper is to study the role and implications of price advertising when shopping trips are costly to consumers to do so we introduce advertising into an optimal sequential search model information about prices is both gathered by consumers and disseminated by firms consumers search sequentially and stores advertise with various intensity when it is in their interest to do so our model has a unique equilibrium exhibiting priee dispersion the model generates predictions about the shape of the price distribution and firms advertising behavior we explore the effects of entry and find that when initial advertising costs at zero level of effort are precisely zero entry drives the equilibrium to the perfectly competitive outcome however when initial marginal advertising costs are positive entry drives prices higher and while the informed consumers almost surely locate competitive prices welfare does not necessarily increase finally we compare the effectiveness of the two informational channels when advertising costs shrink prices become competitive however when search costs shrink prices remain bounded above marginal production costs

modelling trends in food market integration method and an application to tanzanian maize markets abstract pushed by increasing availability of price data and extensive market liberalisation efforts in many developing countries research on food market integration has evolved rapidly over the last two decades empirical methods to measure market integration diverged in two directions on the one hand there is the parity bounds model pbm using a switching regressions technique while on the other hand the use of threshold autoregressive tar models has been proposed this article provides a discussion on the two methods and argues that tar models are better able to capture the dynamics of the arbitrage process underlying interconnected markets furthermore we extend the standard tar model to include a time trend in both the threshold and the adjustment parameter using weekly maize price data on seven selected markets in tanzania we illustrate how both transaction cost and the speed of adjustment have changed during the nineties

food price seasonality in africa measurement and extent everyone knows about seasonality but what exactly do we know this study systematically measures seasonal price gaps at 193 markets for 13 food commodities in seven african countries it shows that the commonly used dummy variable or moving average deviation methods to estimate the seasonal gap can yield substantial upward bias this can be partially circumvented using trigonometric and sawtooth models which are more parsimonious among staple crops seasonality is highest for maize 33 percent on average and lowest for rice 16 percent this is two and a half to three times larger than in the international reference markets seasonality varies substantially across market places but maize is the only crop in which there are important systematic country effects malawi where maize is the main staple emerges as exhibiting the most acute seasonal differences reaching the sustainable development goal of zero hunger requires renewed policy attention to seasonality in food prices and consumption

exploring the logic behind southern africa s food crises summary government action during food crises in southern africa frequently exacerbates the problems driving food staple prices well beyond import parity we argue that an inability to make credible commitments due largely to a lack of trust between public and private sectors contributes to this dynamic empirical policy analysis can facilitate resolution only within a consultative process involving a broad range of stakeholders the policies emerging from such a process are not likely to approximate first best recommendations yet the precise policies may be less important than the fact that they exist and that main stakeholders find them credible

prisoners dilemma in duopoly super games abstract the choice between quantity and price in order to stabilize collusion is modeled here it is shown that this relocates the prisoners dilemma backward from the market stage to the stage where the market variable is chosen in order to sustain collusion and where discount rates appear as the payoffs likewise a prisoners dilemma arises also when both the market variable and the type of behavior cooperative or non cooperative are simultaneously chosen journal of economic literature classification numbers c72 d43 l13

anything goes with heterogeneous but not always with homogeneous oligopoly abstract corchon and mas colell 1996 on the stability of best reply and gradient systems with applications to imperfectly competitive models economics letters 51 59 65 showed that in heterogeneous oligopoly almost everything is possible in order to obtain a similar result for homogeneous oligopoly either one needs an externality in the cost function or the reaction correspondences should fulfill a special condition

price competition and advertising in oligopoly abstract this paper studies price advertising in an oligopoly market where consumers have only local price information sellers may attract consumers from other locations by advertising their price with positive probability they advertise a low price to attract customers from distant locations with the remaining probability they post a high price and serve only local customers the random advertising equilibrium approaches the equilibrium under perfect price information when the cost of advertising becomes small

what drives local food prices evidence from the tanzanian maize market this study quantifies the relationship between tanzanian and external maize markets while also accounting for domestic influences it concludes that external influences on domestic prices originate from regional rather than global markets it also shows that compared to external factors domestic factors exert a greater influence on tanzanian maize markets further the mechanisms through which trade policies influence maize markets involve interactions with both external market shocks and domestic weather shocks overall it provides evidence that the intermittent imposition of export bans in tanzania has had adverse impacts on its maize markets and consequently on the development of its agrarian economy

markov switching estimation of spatial maize price transmission processes between tanzania and kenya we discuss the markov switching vector au toregressive ms var class of nonlinear time series models that can be used to analyze recurring discrete structural changes in time series hamilton s 1989 seminal markov switching ms model of the u s business cy cle triggered considerable interest in the ms approach in economics most empirical appli cations to date have focused on the business cy cle and financial markets but we see potential for ms var models in agricultural economics for example in price transmission analysis in the following we first provide an overview of the ms var framework we then present an illustrative application to maize price trans mission between tanzania and kenya the article closes with a discussion of strengths weaknesses and potential uses of the ms var approach in price transmission analysis

us food aid and civil conflict we study the effect of us food aid on conflict in recipient countries our analysis exploits time variation in food aid shipments due to changes in us wheat production and cross sectional variation in a country s tendency to receive any us food aid according to our estimates an increase in us food aid increases the incidence and duration of civil conflicts but has no robust effect on interstate conflicts or the onset of civil conflicts we also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict jel d74 f35 o17 o19 q11 q18 we are unable to determine whether our aid helps or hinders one or more parties to the conflict it is clear that the losses particularly looted assets constitutes a serious barrier to the efficient and effective provision of assistance and can contribute to the war economy this raises a serious challenge for the humanitarian community can humanitarians be accused of fueling or prolonging the conflict in these two countries medecins sans frontieres amsterdam 1

export restrictions and price insulation during commodity price booms for individual countries variable trade barriers can be used to reduce the volatility of domestic relative to world prices if this is done by countries accounting for a large share of the market its effect is offset by increases in world price volatility this study shows the nature of the resulting collective action problem with the policy being ineffective on average in stabilizing domestic prices while increasing the volatility of the income transfers from terms of trade changes a simple approach to assessing the contribution of insulation to the price increases is developed and used with new estimates of agricultural distortions to assess its contribution to the price spikes in 1972 74 and 2006 08 for rice and wheat the analysis suggests that 45 percent of the increase in rice prices in 2006 08 and 30 percent of the increase in wheat prices was due to insulating behavior one sign of progress since 1972 74 was a substantial reduction in the extent of price insulating behavior by the industrial countries this provides little stabilizing benefit in the rice market because countries not classifying themselves at the world trade organization as developing account for only 3 percent of world rice consumption but it does offer some benefit for the wheat market where non developing countries account for 27 percent of consumption

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

on the markovian efficiency of bertrand and cournot equilibria we characterize and compare closed loop feedback price and quantity strategies within a full fledged dynamic model of oligopolistic competition in which production requires exploitation of a renewable productive asset unlike previous papers on the strategic exploitation of productive assets we allow for imperfect product substitutability which enables us to deal with price competition we show that the traditional result that the bertrand equilibrium is more efficient than the cournot equilibrium does not necessarily hold in a markovian environment either in the short run or at the stationary equilibrium or using the discounted sum of welfare as a criterion for relative efficiency

price vs quantity competition in a vertically related market this paper demonstrates that the standard conclusions regarding the comparison of cournot and bertrand competition are reversed in a vertically related market with upstream monopoly and trading via two part tariffs in such a market downstream cournot competition yields higher output lower wholesale prices lower final prices higher consumers surplus and higher total welfare than bertrand competition

modeling competitive marketing strategies the impact of marketing mix relationships and industry structure this paper empirically analyzes the formulation of competitive marketing strategies consisting of product quality levels promotional expenditures and prices using a simultaneous equation model we examine the use of prices and promotional spending as signals or indications of product quality the impact of promotional spending on prices and the impact of industry structure on the formulation of the complete marketing mix the structural equations are developed using a theoretical model of optimal competitive marketing mix and are estimated using business level pims data which consists largely of industrial durable goods producers for a cross section of 1 100 of these businesses three results of the estimation are especially interesting price cost margins are high for high quality products suggesting that high prices indicate or signal high quality promotional intensity is unrelated to product quality suggesting that promotional effort provides no reliable signals of quality intensely promoted products earn low price cost margins however indicating that promotional spending is associated with high price sensitivity quality levels promotional intensity and price cost margins vary significantly with competitive and market conditions such as the concentration of competitors and the stability of market shares although these relationships are generally weaker than relationships between quality promotion and price cost margins quality levels are high and margins low in markets with unstable shares or unconcentrated competitors

comparing cournot and bertrand in a homogeneous product market abstract this paper examines some general notions relating to the comparison of cournot and bertrand equilibrium outcomes results obtained by vives in this connection are reconsidered in a homogeneous product market and it is shown that these results are sensitive to the market sharing rules it is found that the results are always true under those market sharing rules which have the property of including the competitive equilibrium in the set of bertrand equilibria for example the capacity sharing rule if however the sharing rule does not have this property for example the equal sharing rule then the results referred to above may not hold when costs are asymmetric journal of economic literatureclassification numbers l13

testing market integration a model of spatial price differentials for a tradable good is proposed which avoids the inferential dangers of received methods using static price correlations the proposed method also extracts more information on the causes of price differentials from the same data the method is illustrated using monthly rice price data for postindependence bangladesh including the very substantial regional price shocks during the 1974 famine impediments to market integration are indicated

spatial market integration in the presence of threshold effects a large body of research has evaluated price linkages in spatially separate markets much recent research has applied models appropriate for nonstationary data such analyses have been criticized for their ignorance of transactions costs which may inhibit price adjustments and thus affect tests of integration this analysis utilizes threshold autoregression and cointegration models to account for a neutral band representing transactions costs we evaluate daily price linkages among four corn and four soybean markets in north carolina nonlinear impulse response functions are used to investigate dynamic patterns of adjustments to shocks our results confirm the presence of thresholds and indicate strong support for market integration though adjustments following shocks may take many days to be complete in every case the threshold models suggest much faster adjustments in response to deviations from equilibrium than is the case when threshold behavior is ignored a large amount of empirical research has evaluated the extent to which spatially separate markets are integrated though the term is used loosely in the literature tests of market integration usually consider the extent to which shocks are transmitted among spatially separate markets the integration of markets can have important implications for price discovery and the operation of the market since persistent deviations from integration may imply riskless profit opportunities for spatial traders

some further evidence on the law of one price the law of one price still holds international trade models often postulate the existence of a representative price i e the price which prevails at all markets this is known as the law of one price in this paper the law of one price is tested for seven commodities among four countries by explicitly considering transaction costs the empirical evidence suggests that in most cases the law of one price cannot be rejected asa maintained hypothesis furthermore for the remaining cases transaction costs seem to cause the failure