property rights externalities and resource degradation locating the tragedy abstract resource degradation in the third world is largely driven by the demands of farm households for fuelwood and land for agriculture since resources are often controlled through indigenous systems of property the tragedy of the commons has been used to explain resource degradation as a result private property is suggested as a solution to resource degradation a dynamic model capable of examining household incentives for resource use under private and common property is developed results of the model reject the conventional wisdom that gives rise to the presumed optimality of private individual property in natural resources and the correlated indictment of group management regimes

transition to fully funded pension schemes a non orthodox criticism summary the paper examines the dominant views on the adoption of mandatory fully funded pension schemes ff as a partial or complete substitute for the unfunded payg three obstacles to the ff reform are envisaged to begin with the reform may fail to boost workers marginal propensity to save since workers may contract their voluntary saving to compensate the larger mandatory saving to ff schemes secondly if payg s payroll contributions are reduced and diverted to a ff scheme the larger private saving supply will be balanced by a lower government saving if the government is committed to honour the current pension payments thirdly keynes saving paradox reinforced by the capital theory critique initiated by sraffa suggests that the effect of the rise in the marginal propensity to save is not an increase in capital accumulation but rather a fall of income and employment

the environment and emerging development issues development economics for the most part has failed to recognize renewable environmental resources as economic goods yet the lives of the poor in developing countries are intimately tied to the fate of their local common property resources soil fuel wood water and so on ignoring the loss of common property renewable resources via degradation centralization or privatization in calculations of net national product can mask the destruction of resources available to a country s poor behind the false appearance of a growing national economy this paper describes the difference between the problem of managing local common property resources in developing countries and the problem of protecting the global commons such as the atmosphere and oceans it outlines the calculations that would include the local commons in the national income accounting of capital assets and argues that the interests of those most dependent on the increasingly scarce local commons will be best served by placing control in their hands while the central government provides infrastructure and educational support to control the pollution of the global commons on the other hand the paper sketches a plan in which most countries would have a high incentive to participate a global allocation of limited tradable permits to discharge defined pollutants

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

best policy response to environmental shocks applying a stochastic framework abstract the paper develops a general framework for the analysis of environmental shocks in growing economies endogenous capital investments allow identifying the dual role of capital as a buffer against shocks and a source of pollution we study the effects of recurring natural disasters on optimal growth and efficient environmental policies emissions may cause continuous fluctuations entail discrete and recurring jumps or trigger so called tipping points with large costs to the economy closed form solutions are provided for all the model variants we discuss possible applications in environmental economics and identify current research gaps

incorporating risk aversion into dynamic programming models most previous stochastic dynamic programming dp applications have assumed that decision makers are risk neutral however risk permeates both intrayear and interyear relationships in most dp problems incorporating risk aversion to intrayear outcomes alone can violate the independence assumption of expected utility and can destabilize long run equilibrium returns aversion to riskiness of the long run returns suppresses the effect of sequential resolution of risk over time because tolerance of short run versus long run risk varies in dynamic situations procedures for incorporating risk aversion should accommodate this variation more research on risk averse dp formulations is needed

soil conservation as an investment in land abstract most studies on the problem of optimal soil conservation have analyzed soil conservation measures as being time limited in their effect this paper extends previous analyses of the soil conservation decision by allowing farmers to make investments in soil conservation structures such as terraces bundles and ditches it shows that the main conclusions arrived at in previous studies remain valid the long term effects of unanticipated permanent changes in prices and discount rates may go either way independent of whether conservation measures are time limited or have lasting effects on the soil base

an economic model of soil conservation by introducing soil depth and soil loss into a simple model of agricultural production this paper seeks to determine when the private path of erosion differs from the socially optimal path considering the depletion of soil only and abstracting from the environmental disruption caused by erosion the paper argues that under most institutional arrangements the social and private rates of erosion are the same the paper concludes that public policy should be directed toward reducing erosion only when it leads to significant pollution externalities

risk risk aversion and on farm soil depletion abstract this paper studies the production and attendant soil depletion choices of a risk averse farmer in two related models the first is a two date model with uncertainty in both production and end of period land price the second is a three date model in which production and consumption choices are made in both periods but there is uncertainty only in the second period in both models the paper identifies plausible conditions under which a higher level of initial farmer wealth and or a lower level of production and land risk lead to a lower level of output and as a result a lower level of output induced soil depletion

should america save for its old age fiscal policy population aging and national saving he federal government has recently seen an abrupt turnaround in its budget balance from years of deficits to the now predicted years of surpluses this switch has been widely hailed since many analysts believe that the united states saves too little and that the switch to government budget surpluses can help to address that problem indeed concern about low u s saving and the long term budget outlook has increased of late as the retirement of the baby boom generation draws closer and the financial pressures associated with population aging loom larger in this paper we cite a collection of arguments for why u s fiscal policy should be used to increase national saving then we focus on whether the aging of the u s population adds force to these arguments for boosting national saving and conclude perhaps surprisingly that it may not the potential role of fiscal policy in preparing the country for the coming demographic change is at the center of recent budget proposals although the sudden emergence of budget surpluses is to a large extent based on economic and other factors beyond the government s direct control one can argue that the political will to maintain these surpluses stems in part from a desire to prepare for the retirement of the baby boomers moreover the question of whether the projected surpluses should be devoted to new spending tax cuts or debt reduction is entangled with arguments over what portion of the surpluses should go to saving social security and medicare yet the appropriate saving response to population aging is not clear cut while aging boosts the demands on future resources it also changes the rate of return the u s economy can expect from saving the net effect of aging on desired saving is

strategic vertical integration without foreclosure we determine the endogenous degree of vertical integration in a model of successive oligopoly that captures both efficiency gains and strategic effects foreclosure effects are purposely left aside the profitability of integration originates in the greater ability of integrated firms to adopt a specific type of technologies we show that vertical merger waves can stop by themselves before integration is complete because of strategic substitutability in vertical integration this is in contrast to the strategic complementarity result in mclaren 2000 that leads to either complete integration or complete separation

consumption risk farm characteristics and soil conservation adoption among low income farmers in the philippines abstract this paper investigates patterns of soil conservation adoption among low income farmers in the philippines a model is presented that focuses attention on the role of assets and consumption risk in influencing soil conservation adoption decisions results from a reduced form probit model of adoption are reported these econometric findings indicate that patterns of soil conservation adoption reflect relative risk considerations in addition to farm and household characteristics farm size tenure security labor availability and land quality all exhibit a positive association with soil conservation adoption in contrast controlling on these and other household characteristics the probability of adoption falls as consumption risk rises these results underscore a need for greater sensitivity among policymakers to the role of consumption risk in influencing soil conservation decisions in low income settings

poverty consumption risk and soil conservation abstract this paper studies the impact of poverty and uninsured consumption risk on incentives to invest in soil conservation a stochastic dynamic model is used to show how consumption risks and costs of investment influence incentives to adopt soil conservation measures on low income farms the model is calibrated using production data from hillside farms in the philippines simulations with the model demonstrate how the value of soil conservation depends on the cost of investing the risk characteristics of the soil conservation method and differences among households in capacity to bear risk model predictions are compared with empirical adoption patterns as described by a probit model and nonparametric kernel regressions of adoption probability empirical findings show how differences in farm size tenure security risk exposure and access to credit help to explain patterns of soil conservation adoption implications for policy are discussed

efficient dynamic pollution taxation in an uncertain environment this paper analyzes efficient pollution taxation within a stochastic model of endogenous growth pollution is a by product of production and causes disutility furthermore the productivity which results from environmental quality is uncertain this reflects e g uncertain capital depreciation induced by natural disasters like hurricanes or floods this uncertainty is shown to raise an ambiguous impact on the optimal pollution level as well as on optimal environmental taxation market equilibrium turns out to be suboptimal since the households mis perceive their individual impact on pollution conditions for welfare maximizing pollution taxation are stated and it is shown that a direct pollution tax is not appropriate to yield pareto optimal growth instead a linear capital income tax together with a linear abatement subsidy build an efficient tax scheme if secondarily the governmental budget is balanced moreover an increase in the riskiness of environmental productivity may even lead to an increase in the optimal pollution level and to a decrease in optimal environmental taxation depending predominantly on the preference parameters

global population growth technology and malthusian constraints a quantitative growth theoretic perspective we structurally estimate a two sector schumpeterian growth model with endogenous population and finite land reserves to study the long run evolution of global population technological progress and the demand for food the estimated model closely replicates trajectories for world population gdp sectoral productivity growth and crop land area from 1960 to 2010 projections from 2010 onwards show a slowdown of technological progress and because it is a key determinant of fertility costs significant population growth by 2100 global population reaches 12 4 billion and agricultural production doubles but the land constraint does not bind because of capital investment and technological progress

a note on mr meade s relation and international capital movements recognition that a change in investment expenditure always leads to an equal increase in voluntary saving has been highlighted by several commentators as one of the key innovations in keynes s general theory see especially hicks 1936 239 robinson 1937 ch 2 meade 1975 82 patinkin 1976 65 1993 647 and skidelsky 1992 554 following a reference in kami s 1931 189 seminal presentation of the multiplier this identity relationship between investment and voluntary saving has been called mr meade s relation and in a brief note meade 1993 has described how he first discovered and presented it to the cambridge circus in the first half of 1931 1 first meade set out the causal relationships among increases in investment income and saving in the form of arrowed lines within a sequential diagram this method of process or period analysis often using robertson s 1936 1940 equivalent tabular presentation remains an important part of post keynesian textbooks see harcourt et al 1967 ch 10 chick 1983 ch 14 and davidson 1994 ch 3 but has virtually disappeared from modern day research as far as we are aware chick 1985 cottrell 1986 earl 1990 and dalziel 1996a b are the only recent authors to advocate its wide use

the role of intergenerational transfers and life cycle saving in the accumulation of wealth he purpose of this paper is to review what economists know at present about the following question how large a portion of the existing wealth is the result of a bequest motive that is of accumulation for the specific purpose of leaving bequests i will also endeavor to clarify why an answer to this question is of interest in the early keynesian period when the study of national saving first attracted wide interest relatively little attention was paid to what led people to save though it was generally understood that the main systematic reason was to leave bequests j m keynes in the famous chapter 9 of the general theory of employment interest and money 1936 had listed seven distinct motives for saving besides the leaving of bequests but five of these which include to increase one s future income or to insure one s independence and power implied that all or nearly all the accumulation would finally wind up as bequeathed wealth this in turn meant that most private wealth originated through bequests that is it either had been received through bequests or was destined to be bequeathed and indeed how else could society accumulate wealth however keynes 1936 p 107 also mentioned two further motives precaution that is to build up a reserve against unforeseen contingencies and foresight that is to provide for an anticipated future relation between the income and the needs of the individual or his family different from that which exists in the present as for example in relation to old age family education or the maintenance of dependents these motives in contrast to most of the previous ones have the

valuing soil conservation benefits of agroforestry contour hedgerows in the eastern visayas philippines abstract trees can be considered as investments made by economic agents to prevent depreciation of natural assets such as stocks of top soil and water in agroforestry systems farmers use trees in this manner by deliberately combining them with agricultural crops on the same unit of land although advocates of agroforestry have asserted that soil conservation is one of its primary benefits empirical estimates of these benefits have been lacking due to temporal and spatial complexity of agroforestry systems and the nonmarket aspect of soil capital assets this study designs and applies a bio economic framework for valuing the soil conservation benefits of agroforestry the framework is tested with econometric analysis of data from surveys of households in eastern visayas philippines where usaid government of philippines introduced contour hedgerow agroforestry in 1983 by constructing a weighted soil quality index that also incorporates measures of soil fertility texture and color in addition to erosion we extend previous economic studies of soil resources this index is regressed on a variety of farming and site specific bio physical variables next we use a cobb douglas profit function to directly relate agricultural profits and soil quality thus the value of soil conservation is measured as a quasi rent differential or the share of producer surplus associated with a change in soil quality because this framework assumes the existence of markets the assumption is tested by analysing the statistical significance of consumption side variables e g number of household members on production side variables e g profits instrumental variables are used to handle the endogeneity of the soil index in the profit equation seemingly unrelated regression sur analysis is used to accommodate correlation of errors across the soil and profit equations regression results reveal the importance of agroforestry intensity private ownership land fragmentation and familiarity with soil conservation as positive covariates of soil quality analysis of production data indicate the importance of market prices education farming experience farm size topography and soil quality as positive covariates of household profits investments in agroforestry to improve or maintain soil capital can increased annual agricultural profits by us 53 for the typical household which is 6 of total income however there are significant up front costs given that small farmers in tropical uplands are important players in the management of deteriorating soil and forest resources policy makers may want to consider supporting farmers in the early years of agroforestry adoption

agro export production and peasant land access examining the dynamic between adoption and accumulation abstract new technologies and export opportunities have often contributed to dualistic agrarian structure and intense social conflict in latin american a switching regression model developed in this paper explicitly links export adoption and land accumulation patterns controlling for pre existing differentiation processes applied to survey data gathered from peasant households in guatemala the model provides evidence of equitable structural change induced by a recent export boom in vegetable crops however the optimism of these results is tempered by consideration of the unfavorable longer term market dynamics confronting small scale producers

price policy and returns to soil conservation in semi arid kenya this paper develops an approach that uses relatively easily available data to examine empirically how policy induced price changes affect the incentives of farmers in developing countries to adopt soil conservation measures the model shows that there is no simple relationship between price distortions created by government policies and farmers incentives to adopt conservation measures policy induced price changes could lead to either more or less conservation depending on site specific conditions data from a semi arid region in kenya are used to illustrate the magnitude and direction of changes in price policy on returns to terracing and to show how results are affected by the nature of the conservation technology in the study area higher commodity prices increase incentives to adopt conservation measures on steep slopes but lower them on shallower slopes if terraces were to require more land to be taken out of production than assumed in the calculations higher commodity prices would tend to discourage farmers from adopting them

soil conservation with uncertain revenues and input supplies shortle and stefanou provide a conceptual extension of the single period static generalized meanvariance model gmvm to the multiperiod dynamic case in doing so they illustrate the linkage between the selection of activities in the first period to production opportunities in the second and by extension subsequent time periods in the context of analyzing the adoption of soil loss control practices they correctly argue that the static model employed in our analysis ignores any benefits that adopting these practices might have on future production opportunities their criticisms however are essentially no different than those levied against static models used in other types of analyses regardless of the type of risk attitudes attributed to the representative decision maker that is their comments hold equally well for risk neutral static models of soil conservation behavior the purpose of our work however was to demonstrate the effects of uncertainty and risk aversion on the selection of crop and soil loss control activities as compared to the risk neutral case our purpose was not to analyze the time path of bmp adoption or erosion although we agree that this is an interesting research topic in the context of our

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

wealth risk and activity choice cattle in western tanzania abstract imperfect credit markets force households to use their savings for investment profitable activities often require lumpy investments limiting entry by poorer households resulting in increasing welfare differences in tanzania cattle are a profitable but lumpy investment and a liquid asset for consumption smoothing richer households own substantial cattle herds while poorer households specialize in low return low risk activities a dynamic programming model and simulations are presented to analyze entry into asset accumulation under income risk the evidence suggests that households with lower endowments are less likely to own cattle and returns to their endowments are lower

strategic merger waves a theory of musical chairs this paper proposes an explanation of merger waves based on the interaction between competitive pressure and irreversibility of mergers in an uncertain environment a set of acquirers compete over time for scarce targets at each point in time an acquirer can either postpone a takeover attempt or raid immediately by postponing the takeover attempt an acquirer may gain from more favorable future market conditions but runs the risk of being preempted by rivals first a complete information model is considered and it is shown that the above tradeoff leads to a continuum of subgame perfect equilibria in monotone strategies that are strictly pareto ranked all these equilibria share the feature that all acquirers rush simultaneously in merger waves the model is then extended to a dynamic global game by introducing slightly noisy private information about merger profitability this game is shown to have a unique markov perfect bayesian equilibrium in monotone strategies and the timing of the merger wave can thus be predicted last the comparative dynamics predictions of the model are related to stylized facts

waves and persistence in merger and acquisition activity abstract markov regime switching and sine wave models have been used to capture the apparent wave like behavior in aggregate u s merger and acquisition m and a activity in this paper we offer an alternative characterization of the dynamic structure in m and a activity as a strongly dependent or long memory process

what accounts for the chilean saving miracle this paper examines the recent saving performance of the chilean economy in the light of its long run 1940 96 trends the first conclusion that can be derived from the data is that most of the increase in private saving since the mid 1980s is due to business saving household saving turns out to be a stationary variable with zero mean since business saving has a unit root households do not seem to take the saving of firms into account when making their own saving decisions within the theoretical framework of a model of business investment with liquidity constraints we estimate a var for business saving private investment public saving and foreign saving the current account deficit we are able to determine that business saving is unaffected by public saving but that in the long run foreign saving and business saving are perfect substitutes private investment business saving and foreign saving are jointly determined the policy conclusions are that policies that stimulate investment are likely to lead to an increase in private saving that policies aimed at raising household saving will be ineffective and that increases in public saving are very powerful for increasing domestic saving in the long run copyright 2001 by oxford university press

debt poverty and resource management in a rural smallholder economy this paper develops a model to capture the key features of poverty credit constraints and resource management faced by poor rural households we assume that due to the existence of asymmetric information and moral hazard the household faces an increasing cost of credit as its debt equity ratio rises a household exploiting a natural resource may fall into a poverty trap but only if it is unable to afford the increasing borrowing costs implied by increasing debt to allow it to avoid such a trap or if it discounts future utility so much that a balanced growth path cannot be financed at any level of long run borrowing in contrast along an optimal balanced growth path the household s asset wealth purchased inputs resource stock and consumption increase at the same constant rate however over the long run there may be carrying capacity limits that prevent the resource from improving further the household may then direct its savings to accumulating financial assets and eventually under certain conditions may become a net creditor with resource exploitation becoming a less and less important source of its income

precautionary saving credit constraints and irreversible investment theory and evidence from serniarid india this article investigates the extent to which poor households are discouraged from making a non divisible but profitable investment using data on irrigation wells in india we estimate the parameters of a structural model of irreversible investment results show that poor farmers fail to undertake a profitable investment that they could in principle self finance because the nondivisibility of the investment puts it out of their reach irreversibility constitutes an additional disincentive to invest simulations show that the availability of credit can dramatically increase investment in irrigation and that interest rate subsidization has little impact

the effects of agricultural development policies on income distribution and technological change in agriculture abstract a framework for analyzing the effects of policies on income distribution is introduced for the case where farmers have both discrete adoption decisions relating to fixed cost and continuous adoption decisions relating to land allocation distributional effects depend on the underlying distributions of farm size risk preferences and credit availability absolute and relative equity effects of various policies are shown to depend critically on which of these factors are major barriers to adoption and on the stochastic relationship of returns to various cropping activities a fixed cost subsidy appears to be a dominant policy from an equity standpoint in most cases

insurance and climate driven extreme events abstract we investigate how insurance affects agents decisions when being faced by endogenous climate driven extreme events this is not only important in order to understand how the possibility of insurance augments mitigation and saving decisions but it also improves our understanding of how insurance should be provided since there are no studies as of now that rely on such an integrated approach we extend the literature along two lines firstly we develop a neoclassical growth framework with endogenous extreme events and an insurance sector secondly we introduce a simulation method that allows us to explicitly take these extreme events into account and which yields additional numerical insights in doing so we can fully characterize and quantify the impact of different insurance policies for mitigation and economic growth decisions our analytical results and computational experiments show that i transparency of the insurance sector is the decisive requisite for abatement activities implying substantial policy opportunities ii a decentralized economy will under invest in abatement without adequate policy interventions iii precautionary beliefs on the frequency of extreme events lead to more sustainability iv a social security system which prices insurance fairly is preferable to an insurance industry which provides insurance with an overhead

aggregate merger activity new evidence on the wave hypothesis the conventional opinion is that aggregate merger activity occurs in waves an early proponent of this view was nelson 13 14 who concluded that merger behavior could be described by bursts of high activity followed by long periods of low activity numerous other authors have advanced similar interpretations of the data including scherer and ross 16 blair lane and schary 1 and golbe and white 7 in fact some have argued that merger waves remain an important but as yet not totally resolved puzzle brealey and myers 2 weston chung and hoag 21 figure 1 presents a plot of the annual number of u s mergers over the period 1895 1994 it is not difficult to see from the figure how the popular belief about merger waves arose the view that mergers come in waves has been the subject of considerable interest since nelson s work first appeared however the formal statistical evidence regarding the wave hypothesis is mixed shughart and tollison 17 examine several time series of merger activity and generally do not reject the null hypotheses that each of the series examined follows either a random walk or an ar 1 process with first order autocorrelation close but not equal to 1 0 they argue that such processes are not consistent with the wave hypothesis golbe and white 7 on the other hand fit a sine wave based model to a similar aggregate merger series and conclude that there is a close correspondence between the data and their specification in this paper we examine the issue of waves in merger activity through formal tests of the hypothesis that aggregate merger activity follows a stationary regime switching process specifically we argue that shifts in an unobservable state variable ignite shifts in the characteristics of the process driving mergers the appeal of this specification is threefold first it provides an intuitively plausible model which generates waves in merger activity second as we show later it provides an explanation for the results in shughart and tollison while at the same time providing an interpretation of the data which adds content to the findings of golbe and white thus reconciling the evidence within an intuitive framework third the model also provides a foundation for further considerations of the factors which might ignite merger waves 2

optimal saving under poisson uncertainty abstract this paper studies optimal saving and investment behaviour of a household that can either invest in a riskless or a risky saving technology when risk results from a poisson process the focus is on behaviour of households in a general equilibrium setup poisson processes are introduced since they allow us to understand and model endogenous cycles jointly with long run growth it turns out that a very simple intuitive and tractable characterization of equilibrium is possible journal of economic literature classification numbers c61 o33 o41

subsistence first farm allocation decisions in senegal abstract this paper examines a problem suggested by the senegalese experience but common to many countries of joint production of a subsistence crop millet which is subject to stringent marketing constraints and a cash crop groundnuts sold through established channels empirical implications for the intertemporal pattern of land allocation are drawn and evidence is provided to support the proposed approach

a reply to michl in his comments tom michl defends the proposal for a fully funded pension scheme based on a saving led classical growth model against my keynesian contention that a higher saving supply would be deflationary in both the short run and the long run michl adds a further argument that an increase in the saving rate associated with a lower interest rate may speed up the accumulation process i remark that the thesis that a lower interest rate has a positive influence on investment is empirically and theoretically controversial while the idea that an increase in investment requires a larger saving supply is open to further keynesian objections copyright 2006 oxford university press

forest resource depletion soil dynamics and agricultural productivity in the tropics abstract a two sector dynamic model for agriculture and forestry is proposed agricultural yields are a function of the rate of deforestation the forest stock and purchased inputs we examine the impact of changes in the social discount rate net returns to agriculture and direct marginal benefits of the forest stock benefits on the optimal deforestation path under the assumption of a quadratic agricultural yield function finally steady state comparative static analysis is conducted

the triggers and clustering properties of merger waves abstractthis article studies the triggers and the agglomeration of mergers and acquisitions m a activity within clusters constituted by time market and industry based on almost 500 000 individual transactions we find that industry factors play a significant role in triggering activity and that m a agglomerates strongly across related industries while clustering in time turns out to be insignificant stock market effects can be either an attracting or a repelling force depending on the type of deal examined this supports the view that merger waves are largely driven by industry shocks

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

comments on cesaratto s transition to fully funded pension schemes a non orthodox criticism cesaratto s critique of the neoclassical approach to pension reform is valuable but he has overextended his argument in applying it to proposals to use pre funding as a mechanism for achieving greater public ownership and for redistributing wealth progressively the fiscal surpluses needed to pre fund the public pension system could increase investment provided that they are offset by an appropriately stimulating monetary policy the post keynesian investment literature descending from kalecki s principle of increasing risk motivates on non neoclassical grounds the interest sensitivity of investment required to make this policy mix effective copyright 2006 oxford university press

economic development on a finite planet with stochastic soil degradation abstract world economic development is associated with growing food consumption agricultural land however suffers from over exploitation and is subject to environmental shocks which are projected to become more severe due to climate change we present a stochastic model of a dynamic economy where soil is an essential input and natural disasters are sizeable multiple and random expansion of economic activities raises effective soil units but contributes to an aggregate loss of soil protective ecosystem services which exacerbates soil degradation at the time of a shock we provide closed form analytical solutions and show that optimal development is characterized by a constant growth rate of stocks and consumption until an environmental shock arrives causing all variables to jump downwards optimal soil management consists of spending a constant fraction of output on preservation measures which is an increasing function of the shocks hazard rate degradation intensity of agricultural practices and the damage intensity of environmental impact we derive the optimal propensity to save and discuss the impact of human pressure and risk exposure on soil and output we also discuss quantitative impacts of climate change on optimal soil management

are there waves in merger activity after all this paper investigates the merger wave hypothesis for the us and the uk employing a markov regime switching model using quarterly data covering the last thirty years for the us we identify the beginning of a merger wave in the mid 1990s but not the much discussed 1980s merger wave we argue that the latter finding can be ascribed to the refined methods of inference offered by the gibbs sampling approach as opposed to the us mergers in the uk exhibit multiple waves with activity surging in the early 1970s and the late 1980s

myth and reality of pension reform the latin american evidence abstract starting in 1981 with chile to the end of 2000 10 countries in latin america implemented structural pension reforms totally or partially privatizing their former public systems the latin american models have shaped similar reforms in eastern europe and influenced changes in western europe and the current debate in the united states in 1999 the then chief economist of the world bank nobel laureate joseph stiglitz coauthored with peter orszag a provocative paper examining the myths of the narrowly interpreted reform model sponsored by the bank but without using crucial data from latin america this article contrasts 12 myths of structural pension reforms in that region with data collected from eight countries in the last seven to 20 years confirming and expanding several of orszag and stiglitz s conclusions

the determinants of merger waves an international perspective article i nfo one of the most conspicuous features of mergers is that they come in waves that are correlated with increases in share prices and price earnings ratios we use a natural way to discriminate between pure stock market influences on firm decisions and other influences by examining merger patterns for both listed and unlisted firms if real changes in the economy drive merger waves as some neoclassical theories of mergers predict both listed and unlisted firms should experience waves we find significant differences between listed and unlisted firms as predicted by behavioral theories of merger waves

social security in a classical growth model this paper develops a growth model with overlapping generations of workers who save for life cycle reasons and ricardian capitalists who save from a bequest motive the population of workers accommodates growth so that the rate of capital accumulation is endogenous and determines the growth of employment two regimes are possible one in which workers saving dominates the long run and a second in which the long run equilibrium growth rate is determined completely by the capitalist saving function sometimes called the cambridge equation the second regime exhibits a version of the pasinetti paradox changes in workers saving affect the level but not the growth rate of capital in the long run applied to social security this result implies that an unfunded system relying on payroll taxes reduces workers lifetime wealth and saving creating level effects on the capital stock without affecting its long run growth rate these effects are mitigated by the presence of a reserve fund various levels of which are examined calibrating the model to realistic parameter values for the us facilitates an interpretation of the controversies over the percentage of the national wealth originating in life cycle saving and the effects of social security on saving the model is offered as an analytical framework for the review of current topics in fiscal policy in particular identifying the social security reserve fund as a potential vehicle for generating capital accumulation and effecting a progressive redistribution of wealth copyright 2004 oxford university press

dynamic decisions under risk application of ito stochastic control in agriculture in agricultural economics most studies of dynamic decisions under risk have been empirical with less emphasis on theory in finance resource economics and general economics however ito stochastic control is popular for theoretical work optimal decisions can be characterized using the powerful ito stochastic calculus this paper describes the assumptions and methods of ito control constructs a dynamic model of agricultural decisions under risk and illustrates with four examples

proposals to restructure social security the 1995 report of the trustees of social security projected that the combined old age survivor s and disability insurance oasdi trust funds would run out in 2030 this report wasn t much news because the problem was slightly less severe than had been projected the year before the date receded by one year it also wasn t much news because everyone already knew that there was a problem and public confidence in the future of social security was already quite low indeed the fraction of people reporting themselves very or somewhat confident in social security is only around 40 percent this opinion should be taken with a grain of salt since the same surveys show that over 90 percent of the interviewees are expecting to receive social security benefits and commonly expect it as a major source of income reno and friedland forthcoming unlike the medicare problem the oasdi problem does not seem severe to me with prompt legislation we could easily muddle through putting together a package of revenue increases and benefit cuts that would restore actuarial balance for the 75 year horizon 1 in this paper i will not consider the relative merits of alternative packages but will discuss five proposals for basic changes in how social security functions changes that go beyond changing some of the parameters in 1 the country does not seem to have much taste for tax increases right now yet the polls asking about tax increases just for social security find the country solidly behind such increases in an ebri gallup poll 64 percent of respondents favor raising taxes now to lessen tax increases in the future while only 28 percent preferred no tax increase before 2010 a majority oppose 15 percent or strongly oppose 38 percent decreasing benefits by 10 20 percent for those born after 1960 in order to avoid a tax increase since it is always ambiguous how to interpret such a poll and we do not want government by opinion poll this should be viewed as a sampling of mood not as a policy recommendation

mergers and the market for organization capital abstract in this paper mergers are an equilibrium outcome in which acquirers marry targets so as to gain access to their organization capital firms with lower learning costs about the new technology are not necessarily those that manage it best once it is mature since there are gains from trade a market for organization capital can arise through mergers this model generates a merger wave after a shock to technology and is consistent with several other stylized facts on mergers documented in the literature