the simple macroeconomics of north south interaction recently there has been an upsurge of interest in macroeconomic linkages between the developed countries the north and less developed countries the south there are several reasons for this first it is partly a response to the recent ldc debt crisis and its possible consequences for northern financial markets and southern growth prospects second the effects of northern macroeconomic policies on primary commodity prices and hence on northern inflation and output and on southern debt are of interest for the world economy third the study of international interdependence in the context of the northern economies has highlighted a missing link the southern economies that are not modeled in detail in existing models of north north interactions analysis of these issues may well prove to be significantly influenced by the behavior of the missing bloc comprising the south what is so particular about north south interactions two asymmetries are normally held to represent the key differences between the economies of developed and developing countries these have to do with the workings of goods and financial markets and are captured in the following simple stylized way 1 northern production consists of industrial goods the output of which is endogenous and the market for which clears through changes in the volume produced by contrast southern production consists of agricultural goods the output of which is exogenous and the market for which clears through changes in the price of agricultural goods relative to industrial goods the association of industry with the north and agriculture with the south is clearly an oversimplification 2 the north has developed capital markets with endogenous interest rates that affect expenditure but in the south credit markets are imperfect the only financial effect on expenditure is a wealth effect that reduces southern expenditure as indebtedness in the south arises we have recently contributed to three surveys of the modeling and policy issues involved in studying interactions between these two rather different kinds of economies see d currie et al 1988 currie v muscatelli and vines 1988 muscatelli and vines 1988 the present paper attempts to distill that work and to model in the simplest possible way some of the key processes at work we concentrate on two important policy issues in global macroeconomics i the effect on the south of reaganomics in the north and ii the effect of debt relief for the south and aid to the south

consumer market segments for biofortified iron beans in rwanda evidence from a hedonic testing study an understanding of consumer market segments is important for efficient and effective targeting of new technologies such as biofortified foods in this paper we use cluster analysis to identify distinct consumer segments in rwanda for four biofortified iron bean varieties data on consumer liking of various sensory attributes of beans was collected by using a 7 point hedonic scale through the application of home use and central location tests implemented in two rural and two urban locations cluster analysis reveals the existence of several distinct consumer segments in each one of the four study locations further analysis is conducted by using multinomial probit and logit models to predict consumer segment membership based on the consumer characteristics results reveal that depending on the location consumer s source of income and whether or not they received information about nutritional benefits of the iron bean varieties have a bearing on their preference of these varieties the paper presents a profile of each one of the consumer market segments identified to assist targeting of various iron bean delivery marketing and promotion efforts in rwanda

the world bank global keynesianism and the distribution of the gains from growth sir hans singer whom this volume celebrates was a pupil of john maynard keynes at cambridge and in 1945 attended the bretton woods negotiations at which keynes and others designed the institutions which now seek to regulate and stimulate the international economy the world bank the imf and the gatt sir hans has provided ever since that time frequent creative suggestions concerning the way in which all of those institutions separately and in relation to the un system should set about the task of global economic governance with a particular flurry of activity around 1994 5 when the bretton woods institutions celebrated their half century by this time of course the bretton woods institutions had departed from their original articles of agreement and implicated the world bank progressively more deeply in policy based programme lending alongside its original project lending functions this paper attempts a little belatedly to take up some of the concerns aroused by that flurry of activity with particular reference to the world bank which keynes as we saw above saw as having the principal stimulative and entrepreneurial role the concerns have been expressed by sir hans in the following way the shift to programme lending and policy conditionality tied in with three other developments first the withering away of the development functions of the un created a gap into which it was tempting and easy for the world bank to move together with the imf second the debt crisis of the 1980s made the developing countries pliant in accepting conditionality pressures from the bretton woods institutions third in the process of replacing the un as a focus of development policy guidance and in line with trends in the major industrial countries the world bank developed again together with the imf a new washington consensus emphasising government failures market orientation liberalisation privatisation etc now the purpose of this is i am using the language of the imf and world bank now to cut down today but in doing so lay the foundations for subsequent sustainable growth now the fact is that if you cut down today it is just as likely that if you cut investment today that does not lay the foundations for subsequent growth that does exactly the opposite the imf are quite fond of illustrating their policy with the french proverb reculer pour mieux sauter the trouble is that what we have today is that in all too many cases the developing countries stand on the edge of an abyss and therefore by stepping back they don t gain manoeuvring space for moving forward but they fall into the abyss singer 1995 p 469 and 1994 p 55

measuring rural consumers willingness to pay for quality labels using experimental auctions the case of aflatoxin free maize in kenya aflatoxins are a common health hazard in tropical countries especially in rural areas new methods to reduce aflatoxin levels in food staples as well as cheaper test methods are being developed but consumers willingness to pay wtp for these improvements is unknown a survey was conducted with a representative sample of rural consumers 1 344 in total 63 women in all major maize production zones of kenya the survey included an experimental auction with maize products of different qualities the results showed that many rural consumers were aware of aflatoxins but few understood their health risks respondents were willing to pay a premium for maize tested for aflatoxins and labeled but asked a high discount for maize that was visibly contaminated with moldy grain the premium was higher for respondents with education and in regions with aflatoxicosis outbreaks knowledge of aflatoxins substantially reduced the overall wtp but did not increase the wtp for tested maize welfare analysis indicates that mandatory testing would result in substantial benefits if the cost of testing can be lowered to below the premium

portfolio selection using hierarchical bayesian analysis and mcmc methods abstract this paper contributes to portfolio selection methodology using a bayesian forecast of the distribution of returns by stochastic approximation new hierarchical priors on the mean vector and covariance matrix of returns are derived and implemented comparison s between this approach and other bayesian methods are studied with simulations on 25 years of historical data on global stock indices it is demonstrated that a fully hierarchical bayes procedure produces promising results warranting more study we carried out a numerical optimization procedure to maximize expected utility using the mcmc monte carlo markov chain samples from the posterior predictive distribution this model resulted in an extra 1 5 percentage points per year in additional portfolio performance on top of the hierarchical bayes model to estimate and and use the markowitz model which is quite a significant empirical result this approach applies to a large class of utility functions and models for market returns

liquidity shocks size and the relative performance of hedge fund strategies abstract we examine whether the increase in the flow of capital to hedge funds over the period 1994 2005 had a negative impact on performance more specifically we study the relative performance of small versus large funds for each of the hedge fund strategies our results indicate that on an absolute return basis small funds outperform large funds on a risk adjusted return basis however we find that large funds outperform small funds and that large funds are also shown to hold less liquid assets and take on less systematic and idiosyncratic risk than small funds further funds that experience positive liquidity shocks generally outperform those that experience negative liquidity shocks we also find evidence that hedge fund managers that are aggressive in dealing with liquidity shocks perform better than hedge fund managers that are conservative in dealing with liquidity shocks

the demand for ldc exports of manufactures estimates from hong kong exports of manufactures from developing countries are generally believed to be sensitive to changes in the level of income in the developed countries their major market this belief is grounded on both casual observation especially from the experience of recent recessions and on extensive econometric evidence of low price elasticities and high income elasticities of demand for ldc exports in developed countries this paper argues that both casual observation and previous econometric evidence are misleading the aim of the paper is to show the order of magnitude of the bias contained in previous econometric estimates of price and income elasticities of demand for ldc exports of manufactures due to neglect of supply side influences previous econometric work has neglected the supply side of ldc exports for the simple reason that it is difficult to model it is difficult to model properly the supply of aggregate ldc exports since the determinants of export supply differ from country to country even for a single country modelling export supply is complicated since in addition to foreign demand and domestic supply exports are determined in part by domestic demand for exportables furthermore in most ldcs the incentive to export is strongly influenced by complex and continually changing industrial and trade policy measures there is one major exception hong kong one of the developing world s largest and most successful exporters of manufactured goods the manufacturing sector in hong kong is almost completely specialised exporting 95 of output consequently domestic demand plays no part in determining the volume of exports furthermore factor markets and the manufacturing sector are almost completely free from government intervention the main exception being the textile export restraints imposed at the insistence of importing countries the voluntary restraint agreements vras to which hong kong is subject no doubt affect the composition of exports but not necessarily the volume of aggregate exports if resources in the restrained sectors can easily be redeployed elsewhere in the economy judging from past export growth rates the vras do not appear to have had a significant effect on aggregate export growth in hong kong the results reported below also suggest that hong kong has effectively circumvented the trade barriers it faces the hong kong manufacturing sector in many ways resembles a firm in the

north south growth and the terms of trade a model on kaldorian lines this paper examines equilibrium growth and stability in the world economy using a north south model in which there is assumed to be surplus labor in both the north and south at an exogenously determined level of real wages the model allows for substitution in consumption between primary commodities and industrial goods in the north and treats the cases of both surplus and scarce land in the south in the case of an exogenous shock to the model the north south terms of trade may overshoot its equilibrium value and or converge to this value along a cyclical path there is no guarantee that the adjustment path is stable

consumers willingness to pay for the color of salmon a choice experiment with real economic incentives in most retail markets sellers post the price and consumers choose which products to buy we designed an experimental market with posted prices to investigate consumers willingness to pay for the color of salmon salmon fillets varying in color and price were displayed in twenty choice scenarios in each scenario the participants chose which of two salmon fillets they wanted to buy to induce real economic incentives each participant drew one binding scenario the participants then had to buy the salmon fillet they had chosen in their binding scenario the choice data were analyzed with a mixed logit model

information branding certification and consumer willingness to pay for high iron pearl millet evidence from experimental auctions in maharashtra india abstract in this paper we use hedonic testing methods adopted from food science literature and the becker degroot marschak mechanism adopted from economic valuation literature to estimate consumer demand for biofortified high iron pearl millet hipm in maharashtra india unlike biofortification with provitamin a biofortification with minerals such as iron and zinc does not change the color or the appearance of the biofortified crop therefore we test the impact of both nutrition information and branding and certification as well as the nature of the brand and of the certifying authority state level versus international on consumer demand for hipm we find that even in the absence of nutrition information consumers assign a small but significant premium to the hipm variety relative to the local variety this is consistent with consumers more favorable rating of the sensory characteristics of the high iron variety nutrition information on the health benefits of hipm increases this premium substantially and regression analysis reveals that consumers prefer international branding and international certification authority to their state level counterparts

empirical analysis of macroeconomic time series var and structural models abstract var and structural econometric models have complementary roles in the modelling of macroeconomic time series a constant parameter var provided it is statistically well specified constitutes a valid basis for testing hypotheses of dynamic specification exogeneity and a priori structure thus facilitating model evaluation as well as suggesting a potentially efficient model development strategy deterministic e g trends and regime shifts and stochastic e g integrated variables non stationarities are analysable within this framework and the johansen maximum likelihood procedure for cointegrated systems is used in an analysis of the determination of earnings prices productivity and unemployment in the u k

devaluation fiscal deficits and the real exchange rate this article examines the use of fiscal policies to sustain the effects of a nominal devaluation on the real exchange rate it is shown that the magnitude of the change in the real exchange rate depends not only on the size of the devaluation and the degree of fiscal adjustment but also on the means by which the fiscal deficit is reduced the change in the nominal exchange rate necessary to maintain the depreciation of the real exchange rate will depend on whether the fiscal deficit is eliminated by increasing taxes or by reducing government expenditures on traded and nontraded goods the required depreciation of the domestic currency will be larger if the fiscal deficit is reduced by increasing taxes than it will be if the deficit is cut by lowering government expenditures further the depreciation would be smaller if the cuts in expenditure fell on traded rather than nontraded goods this result implies that the authorities must ensure consistency between exchange rate action and policies to reduce fiscal imbalances in order to achieve a desired level of the real exchange rate necessary to attain balance of payments equilibrium the real exchange rate represents a key relative price in the economy and policies to change it are often the centerpiece of adjustment programs designed to improve international competitiveness and shift resources toward the production of tradable goods consequently it is critical for policymakers to have some idea of the magnitude and time path of the likely response of the real exchange rate to nominal exchange rate action it is a well accepted proposition however that a nominal devaluation will only have a transitory effect on the real exchange rate in the long run domestic wages and prices will rise by the full amount of the devaluation and the real exchange rate will return to its original level to alter the real exchange rate on a permanent basis therefore devaluation has to be supplemented by policies that restrain the increase in domestic factor costs that results from a devaluation generally speaking the effects of a devaluation on the real exchange rate can

consumer acceptability of yellow maize products in zimbabwe abstract this study analyzes consumers awareness of and attitudes towards yellow maize products in zimbabwe and suggests intervention strategies that will ensure increased production and consumption of the crop which is rich in provitamin a to help prevent the incidence of vitamin a deficiency prevalent among vulnerable groups data from 360 randomly selected rural and urban households show that yellow maize is known to all but few are aware of its nutritional qualities or consume it the main source of supply is imported food aid rich in oils carotenoids and fructose yellow maize easily undergoes chemical changes to produce unacceptable organoleptic properties or bad taste if poorly handled during importation these two factors are responsible for it being perceived inferior to white maize by consumers quality assurance during importation can improve consumer confidence but a long term strategy will be to vigorously promote domestic production of yellow maize varieties rich in high levels of carotene that meet the preferences of consumers drawing from a probit model regression analysis nutritional education can potentially promote yellow maize consumption especially if targeted at low income households domestic production and consumption of yellow maize will decrease vitamin a deficiency among vulnerable groups and improve food insecurity through reduced grain prices and increased incomes for farmers these results draw attention to the need for policy makers in developing countries to review their agricultural policies to ensure that they do not undermine the local production and consumption of nutritionally valuable crops

are choice experiments incentive compatible a test with quality differentiated beef steaks this study compares hypothetical and nonhypothetical responses to choice experiment questions we test for hypothetical bias in a choice experiment involving beef ribeye steaks with differing quality attributes in general hypothetical responses predicted higher probabilities of purchasing beef steaks than nonhypothetical responses thus hypothetical choices overestimate total willingness to pay for beef steaks however marginal willingness to pay for a change in steak quality is in general not statistically different across hypothetical and actual payment settings

testing commitment cost theory in choice experiments in choice experiments it is commonly assumed that individuals make choices in static and certainty decision making conditions real world choices however are usually made in a dynamic setting committing a purchase decision under conditions of uncertainty might have a commitment cost cc in this study we test cc theory using a nonhypothetical choice experiment specifically we test whether choice behavior and willingness to pay estimates differ when individuals have the option to gain present or delayed information or reverse the transaction our results suggest that the construction of a dynamic decision context can be relevant in the design of choice experiments

unemployment in britain male unemployment in britain has risen from around 2 per cent in the 1950s to around 17 per cent in 1985 see figure 1 the figures are for male unemployment because there is no consistent series for women 1 even more remarkably unemployment has fallen in only three years out of the last twenty 1973 1978 and 1979 to account for this we need a model that explains both changes in the natural or non accelerating inflation rate of unemployment nairu and deviations from it we use a three equation supply side model centred on the labour market this has two main features the first concerns the determination of employment in the short run the labour demand function that we use cuts through the fruitless debate now raging especially in europe as to whether current unemployment is classical or keynesian according to the classical view employment is too high because real wages are too high according to the keynesian view real wages are not binding and unemployment is high because the product market does not clear with prices too high relative to nominal demand the whole debate is set in the framework of perfect competition yet in perfect competition prices are set by impersonal forces and it is not clear what could possibly stop prices clearing the market it is much more reasonable to think of prices as being set by imperfectly competitive firms existing prices being the best they can think of given the demand they face in this context firms demand for labour will depend on both the real product wage and the level of real aggregate demand this is the demand function we estimate and it conforms both to common sense and to the data however this does not imply that employment can be made to grow without limit by pumping up real demand for in the medium term when price surprises are eliminated our model determines three variables employment real wages and real demand on the basis of three equations an employment equation a price equation and a wage equation thus in the medium term there is a natural level of employment and corresponding to this a natural level of real aggregate demand the second key feature of our model concerns the medium term determination of unemployment in the medium term the planned mark up of wages over prices in wage settlements must be consistent with the mark up of prices over wage costs in employers pricing behaviour for if wage setters try to set real product wages higher than is consistent with employers pricing behaviour this generates ever increasing inflation thus the key to understanding unemployment in the medium term is the behaviour of wage setters if events occur that push them towards too high real wages then unemployment has to rise to offset these influences we shall call these influences wage pressure variables or push factors and they are clearly crucial in understanding unemployment the variables here include the social security system employment protection

an econometric model of serial correlation and illiquidity in hedge fund returns the returns to hedge funds and other alternative investments are often highly serially correlated in sharp contrast to the returns of more traditional investment vehicles such as long only equity portfolios and mutual funds in this paper we explore several sources of such serial correlation and show that the most likely explanation is illiquidity exposure i e investments in securities that are not actively traded and for which market prices are not always readily available for portfolios of illiquid securities reported returns will tend to be smoother than true economic returns which will understate volatility and increase risk adjusted performance measures such as the sharpe ratio we propose an econometric model of illiquidity exposure and develop estimators for the smoothing prole as well as a smoothing adjusted sharpe ratio for a sample of 908 hedge funds drawn from the tass database we show that our estimated smoothing coecien ts vary considerably across hedge fund style categories and may be a useful proxy for quantifying illiquidity exposure

the ghost of financing gap testing the growth model used in the international financial institutions abstract the harrod domar growth model supposedly died long ago still today economists in the international financial institutions ifis apply the harrod domar model to calculate short run investment requirements for a target growth rate they then calculate a financing gap between the required investment and available resources and often fill the financing gap with foreign aid the financing gap model has two simple predictions 1 aid will go into investment one for one and 2 there will be a fixed linear relationship between growth and investment in the short run the data soundly reject these two predictions of the financing gap model

third world debt and macroeconomic interactions between the north and south in this article the authors examine three issues the causes of the south s debt crisis the nature of the macroeconomic linkages between the north and south and some of the debt rescheduling programmes the crisis was due not only to domestic policies in the south but also to the macroeconomic linkages between the south and the oecd economies these linkages may also play an important part in its cure debt adjustment with growth for the south needs a package of measures including greater co operation on macroeconomic policies and trade issues between north and south and a commonly agreed position on outstanding debt

trade as the engine of growth in developing countries revisited economic growth in developed countries since the mid 1970s the only way to keep the engine of ldc growth beating at a satisfactory rate so the argument goes is to turn to an alternative source of fuel this lewis argues lies in trade among the developing countries which he asserts can take up the slack left by mdcs more developed countries as mdcs slow down 1980 p 560 pessimism about demand for ldc exports in developed countries markets is a recurrent theme in the development literature also familiar is the approach taken by lewis to dismiss past successes of ldcs in world trade by declaring the alleged engine of past growth to be no longer operating satisfactorily the intellectual foundations of the import substitution strategy laid in the 1950s by prebisch myrdal and most importantly nurkse rested on similar grounds arguing that the demand for periphery countries exports in the 20th century is far weaker than it was in the 19th century trade was dismissed as an engine of growth a function nurkse alleged it had served in the 19th century the solution prescribed in the 1950s was to look inward in effect to scrap the trade engine altogether lewis remedy coming two decades later when most importsubstitution possibilities in many ldcs have been all but exhausted retains the trade engine but seeks an alternative source of fuel to drive it the classic critique by irving kravis 1970 of nurkse s thesis of trade as a faltering engine of growth showed that export expansion did not serve in the nineteenth century to differentiate successful from unsuccessful countries p 850 this followed from two findings first that successful 19th century countries showed few signs of export dominated growth second that unsuccessful periphery countries enjoyed export expansion in the second half of the 19th century of the same order of magnitude as the temperate regions of recent settlement this led kravis to conclude that a more warranted metaphor

the interruption of productivity growth in the united states cessation or near cessation of productivity growth in the united states started in i974 and has continued until now the change from the previous steady advance was abrupt and its timing unmistakable although retardation earlier in the postwar period can be identified it was small readily explained and not particularly worrisome this paper will therefore focus on comparisons of changes from i973 to i98i with changes from i948 to i973

information and consumer willingness to pay for biofortified yellow cassava evidence from experimental auctions in nigeria in this article we use the becker degroot marschak mechanism to estimate consumer demand for biofortified yellow cassava varieties in two states of nigeria imo in the southeast and oyo in the southwest these two states exhibit distinct habitual product color preferences for staple food made with cassava we estimate the effect of nutrition information campaigns and nature of planting material delivery institutions on consumer demand willingness to pay estimations account for the effect of product endowment censoring in bids and nonpayment in oyo consumers are willing to pay a premium for light yellow cassava variety even in the absence of nutrition information the article finds that nutrition information results in a large and significant price premium for biofortified cassava in both states and the nature of delivery institution has no significant effect

comparing consumer preferences for color and nutritional quality in maize application of a semi double bound logistic model on urban consumers in kenya consumer preferences for white maize in east and southern africa concerns developers of maize biofortified with provitamin a carotenoids since carotenoids impart a yellow or orange coloration urban consumers willingness to pay wtp for yellow maize was estimated using a semi double bounded logistic model based on a survey of 600 maize consumers in nairobi kenya at posho mills kiosks and supermarkets consumers showed a strong preference for white maize only a minority would buy yellow maize at the same price as white maize and fewer consumers in the posho mills 24 and kiosks 19 than in the supermarkets 34 would do so on average consumers need a price discount of 37 to accept yellow maize this discount was less at the posho mills 35 and kiosks 37 than in the supermarkets 48 most respondents 76 were aware of the existence of fortified meal and the generally showed an interest the average premium for fortified maize was much less than the discount for yellow 5 9 for those aware and 7 4 for those unaware consumer preferences were influenced by socioeconomic factors such as gender education income and ethnic background women have a stronger preference for both white maize and fortified maize than men and consumers with more education have a stronger preference for white income decreases the wtp for yellow maize as well as the price elasticity but increases the wtp for fortified maize consumers originating from western kenya have a lower preference for white while those from central kenya had a stronger preference for fortified maize

hedge fund portfolio construction a comparison of static and dynamic approaches abstract this article studies the impact of modeling time varying covariances correlations of hedge fund returns in terms of hedge fund portfolio construction and risk measurement we use a variety of static and dynamic covariance correlation prediction models and compare the optimized portfolios out of sample performance we find that dynamic covariance correlation models construct portfolios with lower risk and higher out of sample risk adjusted realized return the tail risk of the constructed portfolios is also lower using a mean conditional value at risk framework we show that dynamic covariance correlation models are also successful in constructing portfolios with minimum tail risk

theories of institutions and economic reform in africa abstract the paper presents and critically examines the theories of institutions that can be used as a guide to economic reform in africa three approaches to institutions are initially discussed the model of structural adjustment new institutional economics and the old institutionalist tradition five institutions related to the development of markets in africa are examined from the three perspectives the institutions include property rights including their role in agriculture money and financial institutions prices and markets firms and industrial organization and markets and states the main conclusion of the paper is that structural adjustment due to its neoclassical roots is basically ainstitutional and therefore ill equipped to promote the development of markets in africa while new institutionalism provides interesting insights it is also limited by its neoclassical economic foundations thus if african governments desire to promote market reform they would be best advised to consult the old institutionalist literature particularly the very interesting recent work of proponents of this tradition

the effect of household wealth on the adoption of improved maize varieties in zambia abstract production and price risks that could render input use unprofitable sometimes prevent rural households from benefiting from input technological change the household s ability to cope with such risks and hence benefit from input technological change is often positively related to its wealth or stock of productive assets empirical evidence however suggests a non linear relationship between wealth and adoption of new agricultural technologies so that within a rural community households on the lower wealth continuum behave differently from those on the higher level using farm level data collected from 300 randomly selected households in three districts of zambia in 2004 2005 crop season this paper first stratifies households into poorly and well endowed households based on their access to productive assets and estimates separate double hurdle models for the adoption of improved high yielding maize ihym varieties for each group the results show that factors influencing the adoption and use intensity of ihym varieties differ between the two groups this draws attention to the need for recommending wealth group specific interventions to increase the adoption and use intensity of such varieties and their subsequent impacts on food security and general livelihoods of the households the explicit testing for the possibility that differences in household wealth affect the way in which other variables influence adoption decisions is the paper s unique contribution to the adoption literature

stabilization the political economy of overkill abstract this paper considers whether national and international aspects of the imf s stabilization programmes during the 1970s and early 1980s have resulted in a process of overkill or in other words a process of economic retrenchment which went much further than was strictly necessary in terms of what could have been regarded as reasonable objectives in the international context the author describes how the attack on inflation has become an end in itself at the expense of other stated objectives of the imf thus creating a distortion of its priorities the paper discusses errors of diagnosis which have led to this disorientation and explains why deflationary policies should not be regarded as a panacea the paper then considers the nead for equity and efficiency in the distribution of the political and economic costs of adjustment the next section of this paper discusses the assumptions underlying the imf s treatment of fund members and to what extent even handedness in the application of stabilization measures may result in inequality of burden sharing among borrowers problems related to monetarist theories and the consequent policies are examined followed by a consideration of the dangers involved in devising straightforward performance criteria in the form of precise monetary targets that can readily be monitored by the imf this means of evaluating the national adjustment policies success is seen to be unsatisfactory viz the frequency of stand by arrangement breakdowns and mistakes in forecasting the paper concludes that the concept of unilateral adjustment is not an acceptable basis for imf supervision of the international monetary system in addition care should be taken to avoid overkill in determining the degree and character of adjustment needed in stabilization programmes one possible solution to the extra burden imposed on the ldcs might be a liberalization of the compensatory financing facility with the objective of applying the same kind of regime to imports as to exports

north south interaction and commod control a simple model of north south interaction is presented with a keynesian north producing industrial goods and a classical south producing corn if the terms of trade clear the corn market then commodity price stabilisation can only slightly increase the average value of northern real consumption but if there is real wage resistance in the north then output deflation in the north is necessary to avoid inflationary pressure whenever the terms of trade tend to turn against the north commodity price stabilisation could in such circumstances greatly improve northern welfare the paper also examines whether fiscal policy in the north instead of commodity price stabilisation could provide equally large improvements in northern welfare

demand and supply factors in the determination of nie exports a simultaneous error correction model for hong kong this paper considers the issue of whether a small developing economy such as hong kong faces a perfectly elastic demand for its exports of manufactured goods we construct a simultaneous demand and supply system which is estimated using full information maximum likelihood methods and which allows us to clearly identify demand and supply factors in determining export volumes and prices our empirical findings differ from previous studies conducted with this data set in that they suggest that even a small dynamic newly industrialized economy such as hong kong may not face infinitely elastic demand for its manufactured goods we also advance some reasons to explain why the small country assumption may not be applicable in the case of most industrialized economies

detecting structural breaks and identifying risk factors in hedge fund returns a bayesian approach abstract extending previous work on asset based style factor models this paper proposes a model that allows for the presence of structural breaks in hedge fund return series we consider a bayesian approach to detecting structural breaks occurring at unknown times and identifying relevant risk factors to explain the monthly return variation exact and efficient bayesian inference for the unknown number and positions of the breaks is performed by using filtering recursions similar to those of the forward backward algorithm existing methods of testing for structural breaks are also used for comparison we investigate the presence of structural breaks in several hedge fund indices our results are consistent with market events and episodes that caused substantial volatility in hedge fund returns during the last decade

does leaning against the wind improve exchange rate performance abstract this paper develops a model in which real disturbances cause the exchange rate to overshoot its new long run equilibrium level because of speculative risk aversion combined with the well known lagged effect of the exchange rate on trade flows in this context it is demonstrated that there exists an optimal degree of leaning against the wind which stabilizes the exchange rate at the new equilibrium but which requires the government to have accurate information about the exchange rate trade flow lag without this information leaning against the wind may increase the deviations of the exchange rate from its long run level

recreation demand models with taste differences over people we estimate random parameter logit models of anglers choice of fishing site the models generalize logit by allowing coefficients to vary randomly over anglers rather than being fixed the models do not exhibit the restrictive independence from irrelevant alternatives property of logit and can represent any substitution pattern estimation explicitly accounts for the fact that the variation in coefficients over anglers induces correlation in unobserved utility over trips by the same angler willingness to pay for improved fish stock and the value to anglers of specific sites are calculated from the models and compared with the estimates obtained from a standard logit model

adjustment with growth abstract this paper describes and examines simple versions of the analytical approaches employed by the international monetary fund and the world bank in designing adjustment programs that support their lending activities in the case of the bank this means essentially a variant of the two gap growth model and for the fund a model derived from the monetary approach to the balance of payments an attempt is also made to merge the fund and bank approaches within a consistent framework to demonstrate their complementarity

linear risk tolerant invariant risk preferences this note identifies the class of preferences which simultaneously satisfy invariance two fund portfolio separation and linear risk tolerance it also considers the implications for asset demand and asset pricing of this class of preferences c 2004 elsevier b v all rights reserved

the monetarist experiment in chile a critical survey abstract chile constitutes the most outstanding case of implementation of an extreme market economy model during nine years between 1973 and 1982 a model was implemented that for its pureness deepness and extension induced a drastic transformation of the chilean economy the main features of the model are examined focusing on the anti inflationary policy the reform of the financial system and the external opening then the global results concerning output income distribution and saving investment are studied the paper shows that the balance of the results was clearly negative during the 1973 1981 period output stagnated the concentration of wealth was spectacular and saving and investment rates fell significantly the characteristics themselves of the model and the weakening of the productive apparatus that they originated additionally explain that the international recession was multiplied during 1982 within the domestic economy the paper concludes with an attempt to interpret the main causes of the failure of this experiment

using a discrete choice experiment to elicit the demand for a nutritious food willingness to pay for orange maize in rural zambia using a discrete choice experiment this paper estimates the willingness to pay for biofortified orange maize in rural zambia the study design has five treatment arms which enable an analysis of the impact of nutrition information comparing the use of simulated radio versus community leaders in transmitting the nutrition message on willingness to pay and to account for possible novelty effects in the magnitude of premiums or discounts the estimation strategy also takes into account lexicographic preferences of a subset of our respondents the results suggest that a orange maize is not confused with yellow maize and has the potential to compete with white maize in the absence of a nutrition campaign b there is a premium for orange maize with nutrition information and c different modes of nutritional message dissemination have the same impact on consumer acceptance

portfolios in the ibex 35 before and after the global financial crisis abstractin this article we present an analysis of the effectiveness of various portfolio optimization strategies applied to the stocks included in the spanish ibex 35 index for a period of 14 years from 2001 until 2014 the period under study includes episodes of volatility and instability in financial markets incorporating the global financial crisis and the european sovereign debt crisis this implies a challenge in portfolio optimization strategies since the methodologies are restricted to the assignment of positive weights we have taken for asset allocation the daily returns with an estimation window equal to 1 year and we hold portfolio assets for another year this article attempts to influence the discussion over whether the naive diversification proves to be an effective strategy as opposed to portfolio optimization models for that we evaluate the out of sample performance of 15 strategies for asset allocation in the ibex 35 before and after of the global financial crisis our results sugg

using an economic experiment to estimate willingness to pay for a new maternal nutrient supplement in ghana scaling up access to supplements designed to prevent undernutrition such as new small quantity lipid based nutrient supplements sq lns may require distribution via both public channels and retail markets the viability of sq lns retail markets will hinge on household level demand we use an economic experiment to characterize initial willingness to pay wtp for a maternal sq lns product in ghana wtp is positive for most participants though below the estimated cost of production for many wtp varies depending on income assets and parity status these findings have implications for the design of public health policy and hybrid public private delivery mechanisms

macroeconomic interactions between north and south list of figures list of tables preface list of conference participants 1 introduction david currie anton muscatelli and david vines 2 an econometric investigation of north south interdependence michael beenstock discussion michael p dooley 3 north south interactions a general equilibrium framework for the study of strategic issues david currie david vines thomas moutos anton muscatelli and nic vidalis discussion paul armington 4 commodities debt and north south cooperation a cautionary tale from the structuralist camp andrew hughes hallett discussion ralph c bryant 5 the use of commodity contracts for the management of developing country commodity risks andrew powell and christopher gilbert discussion jorge braga de macedo 6 an empirical study of disequilibrium in north south trade s hossein samiei discussion youngil lim 7 global savings investment and adjustment on micro and macroeconomic foundations of north south financial interdependence rob vos discussion alasdair i macbean 8 brazil s growth prospects domestic savings external finance and oecd performance interactions winston fritsch discussion adrian wood index