Measuring the social costs of suboptimal combinations of policy instruments: A general framework and an example

Since most agricultural programs employ two or more policy instruments simultaneously, it is notable thai little research has attempted to find optimal instrument combinations and no research exists which evaluates the social costs (unrealized benefits) of combining instruments suboptimally. In our paper we report a simple and feasible method to find optimal policy instrument combinations, and we provide the first general, formal approach to measuring the social costs of suboptimal policy instrument combinations. Our approach is illustrated in an analysis for live major U.S. crops (corn, feed grains, wheat, rice, cotton). The simple model we employ for the illustration suggests that except lor the feed grains program, the observed programs combined policy instruments quite suboptimally. We conclude that agricultural economics research now can and should begin placing increased emphasis on studying optimal policy instrument combinations.     

Shocking Stories

The paper provides a survey of methods that decompose multivariate series into permanent and transitory components by using ideas drawn from the co-integration literature. We adopt a two stage procedure to effect the decomposition. In the first stage a basic set of permanent and transitory components is formed by using standard definitions of the shocks which they are constituted from. The resulting measurements are not unique and further information needs to be employed to get uniqueness. Such information can come in many forms but a particularly important one involves the values of the long-run multipliers for permanent shocks that are available from many calibrated models. A comparison of the methods of effecting the decomposition is performed using a well known data set.     

Cost control for computers: Applying bread-and-butter principles

During the 1960s, when it became clear that computers would establish a foothold in business, executives were urged to ensure that the new machines were used effectively. Applying EDP to critical decision and problem areas is still important. However, because of skyrocketing EDP costs and staggering investments in equipment and systems, it now pays to become equally concerned about EDP productivity. Unfortunately, many executives shy away because they lack technical expertise. This is not justified because familiar approaches to cost control that work in other functional areas can be successfully applied to EDP. The author describes how the executive can begin to cope with improving EDP efficiency without getting bogged down in a morass of technical details.