assessing the impact of food policy research rice trade policies in viet nam abstract the economic impact of marketing and trade policy research in viet nam conducted by the international food policy research institute ifpri is assessed using a novel benefit cost framework it measures the economic value of the time saved in hastening the policy responses of the government of vietnam extensive interviews with partners and stakeholders in the research clearly indicated that the time saving was a legitimate measure of the influence of ifpri on decision making linking a spatial equilibrium model with income distribution analysis based on national household surveys allowed ifpri to satisfy policymakers that relaxing rice export quotas and internal trade restrictions on rice would not adversely impact on regional disparities and food security and would have beneficial effects on farm prices and poverty these were major concerns of policymakers prior to the ifpri research project the research on these and other policy options gave a degree of confidence to policymakers that relaxing the controls would be in viet nam s national interest they made these decisions earlier than would have been the case without the ifpri research the policy assessment framework is used to measure the economic impact of the policy changes themselves and in particular the contribution of ifpri s work with viet nam on the policies from 1995 to 1997 the relaxation of rice export quotas and internal restrictions on rice trade made by the government of viet nam in 1995 97 are estimated to have had a present 1995 value to viet nam using a 5 discount rate of 222 million by 2000 rising to 966 million by 2020 for an incremental research investment of less than us 1 million a conservative estimate of the benefit to viet nam of the ifpri contribution to the policy changes effected in viet nam from the reduction in the policy implementation lag indicates a present value in 1995 terms of us 45 million this represents a benefit cost ratio of 56 a more optimistic assessment is that the present value is us 91 million with a benefit cost ratio of 114 in addition to the welfare gains to viet nam there were sizeable gains to the rest of the world from ifpri s contribution inclusion of these benefits increases present value and benefit cost estimates by 34 to 84 around 38 of the contribution of ifpri is estimated to have accrued to the rest of the world as viet nam is now a major player in world rice trade

does a blue revolution help the poor evidence from bangladesh the rapid growth in aquaculture production globally and in bangladesh is well documented over 2000 2010 per capita production of aquaculture grew 76 while the consumer price of fish declined 45 previous studies have suggested pro poor effects of aquaculture based on fish production and consumption patterns this study attempts to quantify the contribution of aquaculture to income growth and poverty reduction in bangladesh using household survey data and a microsimulation approach based on an expanded version of deaton s concept of net benefit ratio we estimate that aquaculture s contribution to income growth between 2000 and 2010 was 2 1 including both price and quantity effects this income growth was translated into poverty reduction of 1 7 percentage points although these estimates seem small they represent almost 10 of the overall poverty reduction in bangladesh during the first decade of the 21st century put differently of the 18 million bengalis who escaped poverty during 2000 2010 about 1 8 million of them managed to do so because of the rapid growth in aquaculture which contributed to rural income while making fish more accessible to consumers

information to guide policy responses to higher global food prices the data and analyses required abstract national decision makers must understand the degree to which their country and population groups within it are exposed to the negative effects of higher global food prices or could exploit new economic opportunities offered by higher prices this paper provides a conceptual overview of the range of data and analyses that will permit leaders and analysts serving them to assess the broad implications of higher global food prices for a country and its population groups what we find is that there are a relatively small number of types of policy responses that governments might take in the face of a food price rise consequently relatively well defined sets of data need to be compiled and types of analyses used by government to generate the information needed to broadly guide efforts to prevent food price increases from becoming crises and to derive any possible benefits international joint action can be employed profitably both to collect this data and to build national capacity to conduct the analyses needed to guide policy formulation and general program design in the face of the risks and the opportunities of higher food prices and to evaluate the effectiveness of those policy responses

does globalization increase child labor abstract there is no empirical evidence that trade exposure per se increases child labor as trade theory and household economics lead us to expect the crosscountry evidence seems to indicate that trade reduces or at worst has no significant effect on child labor consistently with the theory a comparatively well educated labor force and active social policies appear to be conducive to a reduction in child labor for countries with a largely uneducated workforce the problem is not so much globalization as not being allowed to take part in it

liquidity in auction and specialist market structures evidence from the italian bourse abstract several studies find that bid ask spreads for stocks listed on the nyse are lower than for stocks listed on nasdaq while this suggests that specialist market structures provide greater liquidity than competing dealer markets the nature of trading on the nyse which comprises a specialist competing with limit order flow obfuscates the comparison in 2001 a structural change was implemented on the italian bourse many stocks that traded in an auction market switched to a specialist market where the specialist controls order flow results confirm that liquidity is significantly improved when stocks commence trading in the specialist market analysis of the components of the bid ask spread reveal that the adverse selection component of the spread is significantly reduced this evidence suggests that specialist market structures provide greater liquidity to market participants

how far down the path to free trade the importance of rice price stabilization in developing asia abstract international trade agreements are pushing the world in the direction of free trade but price stabilization which is inconsistent with completely free trade remains important in developing asia because of the large share of rice in economic output a policy of pure price stabilization for rice without consistent protection either subsidization or taxation can help to create the macroeconomic stability that is essential for sustained rapid economic growth by increasing the quantity and efficiency of investment throughout the economy pure price stabilization can also generate significant equity gains by protecting poor consumers and farmers from sharp fluctuations in prices while domestic commodity price stabilization schemes have a checkered history around the world the experience of asian countries in stabilizing rice prices offers more scope for optimism asian governments have been generally successful in stabilizing rice prices and there are several instances where this has been accomplished without sustained protection of either consumers or farmers however there is room for improved stabilization mechanisms that would lower the costs of intervention

north south lending and endogenous domestic capital market inefficiencies abstract we develop an open economy model of intertemporal trade under asymmetric information capital market imperfections are endogenous and depend on a country s stage of economic development relative to the perfect information benchmark north south capital flows are dampened and possibly reversed and world interest rates are lower whereas riskless rates are equalized across borders the domestic loan rate is higher in poorer countries the model can be applied to a number of policy issues including the debt overhang problem the indexation of foreign public debts and the effect of income distribution on growth

trade reform and poverty the case of mexico we use a two step computationally simple procedure to analyse the effects of mexico s s potential unilateral tariff liberalisation on real incomes first we use the cge model provided by the global trade analysis project gtap as the new price generator second we apply the price changes to mexican household data in order to assess the effects of the policy simulation on poverty and income distribution although mexico widely liberalised most of its imports by the mid 90s one salient feature is its membership in the north american free trade agreement nafta with canada and united states by choosing gtap as the price generator we are able to model the differential tariff structure even starting with a low level of tariff protection simulation results show that the impact of tariff reform on welfare will be positive in general for all expenditure deciles we find that when we assume non homothetic individual preferences trade liberalisation benefits people in the poorer deciles more than those in the richer ones

poverty and income distribution during adjustment issues and evidence from the oecd project drawing lessons from country studies the authors examine the effects of adjustment policies on the distribution of income in chile cote d ivoire ecuador indonesia malaysia and morocco after analyzing the issues that must be confronted in designing adjustment programs with a focus on poverty they synthesize the main conclusions of the different country studies with simulation exercises they explore the effects of the design of the adjustment packages on poverty and on the sustainability of the measures undertaken in these countries these exercises show considerable diversity in the evolution of income distribution during adjustment they also expose the fatal flaws of narrowly designed adjustment programs adjustment programs whether focused on efficiency or on welfare will fail when they do not recognize the interdependence of the three criteria of efficiency welfare and political feasibility adjustment programs must be carefully packaged to fit country circumstances taking into account both the political and economic environments

changing food prices and rural welfare a nonparametric examination of the cote d ivoire changes in and absolute levels of agricultural pricing and food production may affect consumer food prices producer incentives income distribution and government revenue the nature of these relationships and effects are of especial policy concern in developing countries nonparametric estimation techniques are applied to 1985 living standards household survey data of the cote divoire to estimate the impact of a food price change on income distribution this study examines how food prices are related to agricultural income across rural income in the country in examining a different country considering a wider variety of crops estimating engel curves and applying confidence bands the analysis extends work of a s deaton analysis indicates that while food grown for home consumption is important net food sales and a percentage of total expenditure seem inconsequential at any level of welfare agricultural households grow crops to meet their consumption needs and sell the surplus only when harvests are especially bountiful income elasticities with respect to prices are therefore small these findings suggest that no simple set of small price changes will significantly increase the marketed surplus of food and that structural adjustment policies may be pursued without concern for devastating poor households research is needed into ways of increasing food production through methods other than price changes results also indicate that price increases do not necessarily benefit only large well off farms and that a wide range of issues may be considered with nonparametric estimation techniques

marketing margins and the welfare analysis of food price shocks abstract following the surge in world food prices of 2007 2008 there has been a revival of short run household welfare analysis that seeks to understand whether food price increases are beneficial or detrimental for households for a number of reasons including lack of data in some instances the short run analytical approach has embedded an assumption of equal percentage price changes for consumers and producers this assumption implies that food marketing costs change by the same percentage because an x percent change in both farm prices and consumer prices implies that there must also be an x percent change in their difference but this paper shows that most marketing costs are fixed not proportional and further that assuming proportional marketing costs leads to a bias towards finding negative impacts of higher food prices the magnitude of the bias is shown to be greater than that from failing to incorporate supply and demand responses to price changes and can be substantial relative to the effect estimated without incorporating the bias in addition the bias is not necessarily uniform across income classes thus failure to explicitly consider marketing margins has the potential to reverse the relative magnitudes of the impact on rich and poor

optimal financial instruments debt and equity are developed as optimal financial instruments in a model where cash flows and control rights are allocated to investors endogenously when investment decisions must be made by a single party the debtholder s cash flows are fixed in order to provide the equityholder with efficient incentives for investment ownership of control may be transferred to the debtholder to attenuate the impact of asymmetric information concerning the investment opportunity on the efficiency of the decision making since the classic article by modigliani and miller 1958 a great deal of attention has been focused on the problem of determining the optimal capital structure of the firm spanning taxes and or transaction cost agency cost and signalling arguments have been offered as explanations for why a firm s cash flows might be split between debt and equity claimants in a particular way here we address the more basic question of the optimal design of the securities that firms issue the majority of the existing literature takes the form of the allowable financial instruments as given in defense of this approach it may be noted that to a first approximation firms have used two standard financial instruments debt and equity we argue here however that the characterization of the standard instruments used in much of the literature has been incomplete and that the incentives of decision makers within the firm cannot be completely understood until the problem is addressed from a more basic level than is typically done by concentrating on the cash flow characteristics of these instruments the equally important issue of the way the standard instruments distribute the control rights of the firm has been ignored as a consequence the objectives in corporate decision making have been assumed rather than developed endogenously we consider the allocation of cash flows and the distribution of control rights to optimal financial instruments in a security design problem by considering the design of securities in this way we are able to consider the

financial markets in development and the development of financial markets what is the relationship between markets and development it is argued that markets promote growth and that growth in turn encourages the formation of markets two models with endogenous market formation are presented to analyze this issue the first examines the role that financial markets banks and stock markets play in allocating funds to the highest valued use in the economic system it is shown that intermediation will arise under weak conditions the second focuses on the role that markets play in supporting specialization in economic activity the consequences of perfect competition in market formation are highlighted

on the effects of barriers to international investment a simple model is presented in which it is costly for domestic investors to hold foreign assets the implications of the model for the composition of optimal portfolios at home and abroad are derived it is shown that all foreign assets with a beta larger than some beta plot on either one of two security market lines some foreign assets with a beta smaller than are not held by domestic investors even if their expected return is increased slightly while it is obviously not true that asset markets are completely segmented between countries there is evidence of barriers to international investment although reality seems to lie in that grey area between complete segmentation and no segmentation at all most international asset pricing models are concerned with the extreme case of no barriers to international investment no effort seems to have been made to study the effect on portfolio choice of such barriers which make it costly to hold foreign securities as opposed to domestic securities but which do not in general render international diversification so onerous that investors avoid foreign securities completely casual empiricism suggests that models without barriers to international investment should be suspect those models cannot explain why it appears that in every country investors on average hold more domestic securities than would be required if they held the world market portfolio 2 this paper constructs a model of international asset pricing in which there is a cost associated with holding either long or short risky foreign securities for the sake of simplicity in most of the paper we assume that while domestic investors face barriers to international investment foreign investors face no such barriers it turns out that nothing significant is lost with such an assumption the main conclusions of this paper for the case in which foreign investors face no barriers to international investment are 1 in the presence of barriers to international investment some risky foreign

grain marketing parastatals in asia results from six case studies summary using case studies from six asian countries this paper assesses the relevance of underlying rationales for public intervention in food grain markets documents the existing policies and regulatory supports to grain marketing parastatals examines benefits and costs of parastatals and summarizes lessons from reforms and reduced interventions the results suggest that commonly cited rationales for food market intervention are no longer convincing the costs of parastatals led price stabilization are staggering and the price policies are being dictated by special interests the evidences from the early reformers indicate that reduced intervention can promote competition reduce subsidies and release funds for development and anti poverty programs all without jeopardizing price stability

capital account liberalization what do cross country studies tell us capital account liberalization it is fair to say remains one of the most controversial and least understood policies of our day one reason is that different theoretical perspectives have very different implications for the desirability of liberalizing capital flows another is that empirical analysis has failed to yield conclusive results the answer another influential strand of thought contends is that this efficient markets paradigm is fundamentally misleading when applied to capital flows limits on capital movements are a distortion it is an implication of the theory of the second best that removing one distortion need not be welfare enhancing when other distortions are present

ad valorem tariff and spatial equilibrium models the objectives of this article are to illustrate theoretically and empirically how to incorporate an ad valorem tariff in spatial equilibrium models and show the equivalence of three approaches primal dual and mcp of spatial equilibrium trade modelling the article lays out in detail the theory empirical applications and the results for all three approaches so that trade modellers can easily follow and apply them in their work the primal approach is commonly used by spatial equilibrium modellers though the dual approach corresponds to the textbook depiction of consumer surplus producer surplus and gains from trade the mixed complementarity problem mcp is not commonly used by spatial equilibrium modellers though it is relatively simpler if the modeller knows the equilibrium conditions this article also presents advantages and disadvantages of each approach

international capital structure equilibrium this paper develops a theory of capital structure in an international setting with corporate and personal taxes we generalize the miller analysis to an international equilibrium characterized by differential international taxation and inflation in otherwise perfect international capital markets our analysis highlights the key role that corporate tax arbitrage plays in generating an international capital structure equilibrium and we set forth a number of mechanisms for tax arbitrage transactions we close the paper by outlining some implications of our analysis for national differences in capital structure the international fisher effect and international tax effects on yield differentials among major questions regarding corporate capital structure which arise in an international setting are how or whether multiple tax jurisdictions and multiple currencies affect firm financing decisions and the international bond market equilibrium we examine some of these questions by way of generalizing miller s 1977 debt and taxes model into an international setting this setting allows for different tax regimes across countries as well as the possibility of differential inflation across currencies with consequent exchange rate movements in the first part of this paper we find that an international miller type equilibrium obtains under differential international taxation with capital market conditions which are otherwise analogous to those required for a domestic miller equilibrium our analysis particularly highlights the role that corporations play in miller s analysis as vehicles for tax arbitrage we show that if corporations engage in international tax arbitrage transactions on an equal footing no optimal capital structure exists for individual firms consequently without further restrictions differences in international tax rates alone are incapable of dictating a particular capital structure for an individual firm in the second part of the paper we extend the analysis to consider differential inflation rates with a consequent exchange rate movement and draw additional implications for the international analog of the miller equilibrium with differential inflation and taxation we begin by showing the existence of the international fisher effect for both equity and bonds although inflation and or exchange rate movements may affect real corporate tax subsidy rates and real

informing food security decisions in africa empirical analysis and policy dialogue discussions of economic and agricultural development in africa have focused heavily in recent years on structural adjustment i e basic policy changes aimed at allowing international and domestic markets to play a greater role in coordinating national economic activities often these structural adjustments and accompanying policies aimed at improving economic performance have been based on several implicit assumptions about how african food systems operate yet for many countries little empirical information has been available to test these assumptions hence designing policies too often becomes an exercise in planning without facts this paper argues that not only is there a need to base food security and structural adjustment policies more firmly on empirical information but that the process by which the information is obtained is as important as the information itself agricultural economists and other social scientists can and increasingly should design policy research in africa in ways that simultaneously increase effective demand for empirical information as an input into the ongoing policy process and augment african capacity continually to inform policy deliberations we illustrate the payoffs to such an approach by drawing on selected experience in several african countries weber

domestic and international impacts of the rice trade policy reform in the philippines abstract faced with high domestic rice prices that have fueled inflation above the 2018 target and penalized poor consumers the most the government of the philippines has decided to abandon the quantitative restrictions on imports and replace them with tariffs this paper uses a global rice model based on a partial equilibrium framework to assess the possible impacts of this reform on imports production consumption and prices in contrast with past similar studies we address three key concerns i the heterogeneity in farm price across 16 regions in response to the combined effect of the tarriffication and the average historical trend in productivity increase at 1 5 between 2001 and 2018 ii the differentiation of imports by origin partly due to the different tariffs applied to countries within and beyond the association of south east asian nations and iii the effect on domestic prices in third countries the simulation results suggest that the reform would increase imports by 2 47 million tons 20 7 in 2019 we also find a large decline in farm prices and retail prices respectively by php 6 1 kg 30 1 and php 7 6 kg 17 4 in 2019 that explains an increase in rice consumption we estimate the fall in total inflation at 1 2 in 2019 but less over time further the large fall in farm prices in 2019 is shared quite evenly among regions in the short term but returns to pre reform levels in the near term using a higher price elasticity of supply for one region obtained from panel data surveys we show a more pronounced decline in production than the national average such differentiated results confirm the relevance of using a regionally disaggregated model to design more targeted policies we also show a slight increase in world prices which led to small increases in the domestic prices of south and southeast asian rice markets while this reform is largely pro poor consumers policy makers would need to use the additional tariff revenue to help rice growers either increase their competitiveness and modernize their rice production or shift to other crops

financial intermediation and delegated monitoring this paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders it presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary diversification within an intermediary serves to reduce these costs even in a risk neutral economy the paper presents some more general analysis of the effect of diversification on resolving incentive problems in the environment assumed in the model debt contracts with costly bankruptcy are shown to be optimal the analysis has implications for the portfolio structure and capital structure of intermediaries

welfare impact of higher maize prices when allowing for heterogeneous price increases in this paper we explore the short term welfare impact of higher maize prices on different regions and socioeconomic groups in kenya we find that approximately 80 of the population would be negatively affected by higher maize prices and that poor households would lose a larger proportion of their welfare than wealthy households more specifically rural landless households would lose the most whereas households with landholdings of five acres or more would gain we simulate a 25 increase in maize prices and find that rural poverty would increase by approximately 1 percentage point and urban poverty by 0 5 percentage points moreover the impact differs among regions poverty would increase by 3 percentage points in the rural parts of coast province whereas it would be almost unchanged in the rural parts of western province furthermore we relax the standard assumption that consumer and producer prices change in the same proportions and allow for heterogeneity in marketing margins among districts we demonstrate that relaxing this assumption substantially affects the results and that the results from previous research were thus likely biased

financial development growth and the distribution of income a paradigm is presented in which both the extent of financial intermediation and the rate of economic growth are endogenously determined financial intermediation promotes growth because it allows a higher rate of return to be earned on capital and growth in turn provides the means to implement costly financial structures thus financial intermediation and economic growth are inextricably linked in accord with the goldsmith mckinnon shaw view on economic development the model also generates a development cycle reminiscent of the kuznet hypothesis in particular in the transition from a primitive slow growing economy to a developed fast growing one a nation passes through a stage in which the distribution of wealth across the rich and poor widens

debt taxes and international equilibrium abstract this paper employs an extended miller model to analyze capital structure decisions of individual firms in a two country setting miller equilibria are generally not consistent with an international equilibrium if the tax subsidy of debt differs across countries the most obvious reason for differential tax subsidies is differences between national corporate tax rates we also identify differential tax subsidies of debt if inflation rates differ across countries for both cases we examine the adjustment process from national equilibria to an international equilibrium without and with barriers to international investment we derive the relationship between the equilibrium yields on debt and equity in the two countries and discuss the fisher hypothesis that real returns do not depend upon inflation in a two country miller world

temporary controls on capital inflows abstract during the past decade a number of countries imposed capital controls that had two distinguishing features they were asymmetric in that they were designed principally to discourage capital inflows and they were temporary this paper studies formally the consequences of these policies calibrates their potential effectiveness and assesses their welfare implications in an environment in which the level of capital inflows can be sub optimal in addition motivated by the fact that these types of controls have often been left in place after the dissipation of the shock that lead to the controls being implemented the paper evaluates the welfare cost of procrastination in removing these types of controls

are we overestimating the negative impact of higher food prices evidence from ghana most studies of the welfare impact of higher food prices adopt deaton s approach based on the first order effect of prices changes using income and expenditure survey data this paper explores the impact of higher maize and food prices in ghana and considers the sensitivity of results to changes in several assumptions if second order effects are included incorporating household response to price changes the welfare impact of food price increases is more positive but only modestly so however if we assume that marketing margins are constant in real terms rather than proportional to prices the welfare impact is substantially more positive these findings highlight the need for more research on the behavior of marketing margins under volatile prices

the effects of capital controls on international capital flows in the presence of asymmetric information abstract this paper examines the effects of capital controls on the volume and composition of international capital flows in the presence of asymmetric information in the two period small open economy model stochastic second period output depends on the level of first period investment which cannot be verified by international investors domestic agents obtain external funding by borrowing on international capital markets and by selling equity to international investors the paper investigates the effects of various capital controls on the debt equity choice domestic investment and welfare controls on capital inflows are shown to shift the composition of flows from fixed income instruments towards equity and to reduce the overall volume of inflows

a pecking order of capital inflows and international tax principles abstract even though financial markets today show a high degree of integration the world capital market is still far from the textbook story of high capital mobility the purpose of this paper is to highlight key sources of market failure in the context of international capital flows and to provide guidelines for efficient tax structure in the presence of capital market imperfections the analysis distinguishes three types of international capital flows foreign portfolio debt investment foreign portfolio equity investment and foreign direct investment the paper emphasizes the efficiency of a non uniform tax treatment of the various vehicles of international capital flows

land consolidation as technical change economic impacts in rural vietnam abstract this paper deepens the economic analysis of the effects of land consolidation reduction of land fragmentation it does this in the context of rural vietnam studying whether land consolidation promotes or hinders the vietnamese government s policy objectives of encouraging agricultural mechanization and stimulating the off farm rural economy the analysis views land consolidation as a form of technical change making it possible to apply the rich insights developed in the economic literature on that subject this treatment reveals that the economic impacts of land consolidation depend partly on its factor bias and partly on the degree to which labor is substitutable in production for other factors at a theoretical level if a technical change is factor neutral it will reduce off farm labor supply and slow rural structural transformation away from agriculture if it is labor augmenting and the elasticity of substitution between factors is low enough the opposite effects are predicted the paper studies these issues empirically for rice production in vietnam focusing on the impact that consolidation of rice land has on rice production machinery use and labor allocation the findings confirm that land consolidation raises both farm productivity and farm income and stimulates increased machinery use it also reduces farm labor supply lowers labor intensity in farming and thereby releases more farm labor to off farm development consistent with government policy objectives based on these findings the paper concludes that land consolidation should be encouraged through development of land ownership rights and the promotion of land rental markets

rice prices and income distribution in thailand a non parametric analysis rice is a staple crop in thailand significantly entering both household production and consumption this paper examines the effect of rice prices on the distribution of real income across households taking into account household characteristics and geographical location the data set is a large scale survey of 11 893 households simple nonparametric techniques for regression and density estimation are used these methods depend on few assumptions and generate flexible graphical results that are directly informative about the problem at hand the main results are that higher rice prices should benefit all rural households but the largest benefits accrue to rural households in the middle of the income distribution copyright 1989 by royal economic society

export liberalization and household welfare the case of rice in vietnam vietnam has rapidly become one of the three largest rice exporters in the world in spite of a binding export quota this article uses a multimarket spatial equilibrium model to examine the effect of further liberalization on regional rice prices household data are then used to calculate the welfare impact of these price changes on different household groups the results suggest that although rice export liberalization would raise food prices and exacerbate regional inequality it would also increase average real income and reduce slightly the incidence and severity of poverty we explore several explanations of these apparently paradoxical results

farmers welfare and changing food prices nonparametric evidence from rice in madagascar this paper uses nonparametric density estimation and kernel smoothing techniques to examine the instantaneous distributional implications of rice price changes in madagascar while many farmers do not participate in product markets as either buyers or sellers and net sales or marketable surplus are fairly small for many others the roughly one third of rice farmers who fall below the poverty line face significant negative first order welfare effects from increases in the mean or variance of rice prices conversely the first order gains from rice price increases are highly concentrated among the largest rice farmers and particular regions in madagascar

us brazil cotton dispute and the world cotton market us policies for its cotton producers depress world cotton prices adversely affecting exporters such as brazil which filed a complaint to the wto despite wto rulings in brazil s favour meting out the right to enact retaliatory countermeasures the united states continues to subsidise its cotton farmers after prolonged negotiations brazil and the united states reached an agreement which allowed the united states to pay brazil to refrain from enforcing the countermeasures to capture the adverse effects of us policies theoretical analyses are conducted the theoretical model is extended by constructing an empirical model of the world cotton market the adverse effects of us policies on brazil are estimated and compared to the compensation the united states pays brazil

potential impacts of the proposed west african monetary zone on cowpea trade member countries of the economic community of west african states ecowas are expected to form a west african monetary zone wamz by december 2009 whereby members would use a common currency in an attempt to promote regional integration evidence suggests that reduction in transaction cost as a result of a decrease or elimination of nontariff barriers ntbs and real interest rates in response to elimination of exchange rate differentials positively influence trade the objective of this study is to quantify the effects of a a 7 real interest rate on capital and b zero ntbs within ecowas countries on cowpea vigna unguiculata l walp trade to provide a measure of the potential impacts of the wamz on grain trade the study applies a spatial and temporal price equilibrium model formulated in a mixed complementary programming mcp framework and solved using gams path the focus is on the nigerian cowpea grainshed ncg comprising benin burkina faso cote d ivoire ghana mali niger nigeria and togo in ecowas and cameroon chad and gabon in the central african economic and monetary community caemc the results show that if wamz results in reduced real interest rates within ecowas the larger of the two monetary unions consumers in the relatively larger coastal economies and producers in the smaller sahelian economies would benefit while all others lose however net social welfare would increase by 0 19 over the base case of 6 3 billion us bus removing ntbs among countries in the larger trading bloc may alter the pattern of cowpea flows with total trade volume increasing by 3 but inter bloc trade decreasing by about 8 the net total regional social welfare would increase by 0 14 or 15 million us mus benefiting only consumers in importing countries and producers in exporting countries the results emphasize the importance of specialization based on regional comparative advantage but also draw attention to the need to devise ways to ensure acceptable welfare distribution among producers and consumers in line with policy objectives of the individual countries within the proposed wamz finally this article contributes to the literature on the application of spatial and temporal models incorporating both ad valorem tariffs and differential interest rates in developing economies

are price controls necessarily bad the case of rice in vietnam abstract most economists instinctive reaction to price controls is that they are harmful its strong enforcement results in shortages and resource misallocation while weak enforcement often leads to black markets and high transaction costs given these instincts this paper assesses the pros and cons of rice price controls in vietnam using a multi sector multi household general equilibrium model these price controls fix producer prices and allow government marketing agencies to sell at higher prices and hence are in part a revenue raising device as such they may be part of an efficient tax mix particularly so since agricultural incomes and production go untaxed under the formal tax system it is argued that such controls can act to dampen costly domestic adjustments in the face of volatile world prices it is shown that this system can be supported as welfare enhancing under conditions currently prevailing in vietnam

controls on capital inflows do they work abstract this paper analyzes the effectiveness of controls on capital inflows in particular we analyze in great detail the chilean experience with the use of the unremunerated reserve requirement we examine the effects of the controls applied in chile in 1991 1998 on interest rates real exchange rate and the volume and composition of capital inflows the effects are elusive and it is difficult to pin down long run effects although after the unremunerated reserve requirement was introduced there was an increase in the interest rate differential the econometric evidence does not show it has a significant long run effect also we detect very small effects on the real exchange rate however the more persistent and significant effect is on the composition of capital inflows tilting composition toward longer maturity

credit and equity rationing in markets with adverse selection previous theories of financial market rationing focussed on a single market either the credit or the equity market an interesting question is whether credit and equity rationing are mutually compatible and how they interact we consider a model with two dimensional asymmetric information where entrepreneurs have private information about both the expected returns and the risk of their projects we show that credit and equity rationing may occur individually or simultaneously moreover competition between the two markets may generate the adverse selection that leads to rationing outcomes

international lending with moral hazard and risk of repudiation in this paper i examine the constrained optimal pattern of capital flows between a lender and a borrower in an environment in which there are two impediments to forming contracts the first impediment to contracting arises from the assumption that lenders cannot observe whether borrowers invest or consume borrowed funds this assumption leads to a moral hazard problem in investment the second impediment arises from the assumption that the borrower as a sovereign nation may choose to repudiate his debts the optimal contract is shown to specify that the borrowing country experience a capital outflow when the worst realizations of national output occur this seemingly perverse capital outflow forms a necessary part of the optimal solution to the moral hazard problem in investment

institutional trades and intraday stock price behavior abstract this paper examines the price effect of institutional stock trading using a unique data set that reports the transactions large and small of 37 large institutional money management firms the direction of each trade and the identity of the management firm behind each trade are known although institutional trades are associated with some price pressure we find that the average effect is small there is also a marked asymmetry between the price impact of buys versus sells we relate our findings to various hypotheses on the elasticity of demand for stocks the cost of executing transactions and the determinants of market impact although market capitalization and relative trade size influence the market impact of a trade the dominant influence is the identity of the money manager behind the trade

financial development and economic growth views and agenda this critique argues that the preponderance of theoretical reasoning and empirical evidence suggests a positive first order relationship between financial development and economic growth the body of work would push even most skeptics toward the belief that the development of financial markets and institutions is a critical and inextricable part of the growth process and away from the view that the financial system is an inconsequential sideshow responding passively to economic growth many gaps remain however and the paper highlights areas in acute need of additional research