Euro area external imbalances and the burden of adjustment

The objective of this paper is to explore the consequences of the correction of Euro area trade imbalances on real exchange rates. This analysis requires one additional dimension with respect to the standard Global Imbalances framework à la Obstfeld and Rogoff (2005), since the adjustment takes place within and outside the Euro area. Both types of adjustments are analyzed in a three-country general equilibrium model with a tradable and a non-tradable sectors, and heterogeneous firms built upon Pappadà (2011). ECB (CompNet) data are used to measure the differences in firm size and productivity dispersion across Euro area countries. With respect to the surplus country (Germany), countries running a trade deficit (Spain, Italy) are characterised by a productivity distribution with a lower mean and a less fat right tail. This increases the relative price movement associated with the external adjustment because of the limited role played by the extensive margin. We show that the real exchange rate movements are underestimated when the cross-country differences in terms of productivity distributions are neglected.     

Measuring the effect of farmland preservation on farm profitability

Purchase of development rights (PDR) programs have been created in 27 states to preserve farmland resources. These programs seek to advance several societal objectives, including the protection of farmland from development, retention of rural amenities, and promotion of the economic viability of farming. Using New Jersey farm-level data, this study evaluates whether participation in a state PDR program improves farm profitability. The propensity score matching method is used to correct for selection bias arising from the voluntary nature of these programs. No statistically significant profit differential is found between preserved and observationally equivalent unpreserved farms in our full sample of 4029 farms. When the analysis is replicated across different farm types, we find weak evidence that the profitability of preserved residential lifestyle/retirement farms is lower than that observed for their unpreserved equivalents. In contrast, we find that small farms (<$100,000 in annual sales) operated by individuals for whom farming is a principal occupation earn $414 to $436 more per acre in profit than their observationally equivalent unpreserved counterparts.     

Changes resulting from a land consolidation project (LCP) and its resource–environment effects: A case study in Tianmen City of Hubei Province,China

Land consolidation (LC) is essential for ensuring rural development and for increasing land use effectiveness. LC has been implemented in China since the mid-1990s in an attempt to increase available cropland area, reduce fragmentation and promote agricultural production capacity. The purpose of this study is to identify the changes resulting from the land consolidation project (LCP) implementation, and to develop a parametric approach to assess the resource–environment effects. This study could promote the LCP planning, and provide the support for the decision-making of the LC authorities. The Tianmen land consolidation project in Hubei Province of China was chosen as a case study. The results of the case study showed LCP implementation results in great changes in land use types and their proportions, connectivity of field-roads, irrigation systems and drainage systems, plot numbers, plot shape and plot size. These changes bring both positive and negative effects to region environmental and economic system. Positive effects were demonstrated in agricultural production capacity and agricultural production cost and the negative effects were expressed by the ecosystem services value, landscape diversity and human disturbance intensity.     

Analysis of the impact of agricultural R&D investment on food security

This article investigates how agricultural R&D investment affects the food self-sufficiency ratio (SSR). Several studies have argued a causal relationship between agricultural R&D investment and food security. However, most of these studies are based on conceptual logic and few studies have conducted an empirical analysis. This study verifies whether agricultural R&D investment affects the food SSR as a representative indicator of food security. A total of 822 data sets of 41 countries have been used in the analysis in this study and include developed and developing country data over the period 1981–2009. Food self-efficiency is used as a dependent variable, and agricultural R&D investment and other variables are used as explanatory variables. The estimation results show that, first, the cereal SSR and income are in an inverted U-shaped relationship. Second, increases in land productivity increase the cereal SSR and, lastly, the cereal SSR ratio and agricultural R&D investment are in a U-shaped relationship.     

Does immigration crowd out foreign direct investment inflows? Tradeoff between contemporaneous FDI-immigration substitution and ethnic network externalities

This study examines the dynamic interactions between immigration and inward foreign direct investment (FDI) using bilateral data on these indicators between Japan and each of the 29 countries/economies of origin for both FDI and immigrants into Japan during 1996–2011. Although literature shows a positive FDI–migration relationship, I distinguish between short- and long-term effects of immigration, and show a contemporaneous negative relationship between FDI and immigration. The results show that immigration flows discourage FDI inflows (FDI–migration substitution), although larger immigration stocks induce FDI inflows (ethnic network externalities). Therefore, total effects need to be evaluated considering a tradeoff between contemporaneous substitution and the longer-term complementarity from network effects. While inward FDI promotion and immigration enhancement are often suggested as solutions to resolving shortages in domestic savings and labor, our results have implications for addressing the increasingly daunting policy issue of population aging.     

Similarities and dissimilarities between the EU agricultural and rural development model and Romanian agriculture. Challenges and perspectives

The main aims of this study are to highlight the differences and the similarities between the European model of agricultural and rural development, and the state of play in the Romanian agricultural sector. Statistically speaking, the agricultural sector's indicators of the past two decades place Romania outside the family picture of the EU countries, with very slight resemblances, and very strong discrepancies between their economic, technical, and institutional characteristics. At present, competition-wise, farming and farmers in Romania are still strongly disfavoured in relation to their competitors in the old EU Member States. In Romania, the economic and institutional mechanisms have most often been devised to the disadvantage of agricultural production, by claiming that subsistence farming would be the sustainable way, and by channelling the added value to other sectors. An option to continue the agricultural policies of the past decades and to abandon the national support lent to agriculture would be particularly risky through its unpredictable and incalculable social and economic effects.     

THE ERRONEOUS USE OF CHINA'S POPULATION AND PER CAPITA DATA: A STRUCTURED REVIEW AND CRITICAL TEST

Hundreds of studies in economics misinterpret China's subnational population and per capita data. The most widely used population counts are of hukou registrations from each province, prefecture, county, or city rather than of the people living in each place and generating local gross domestic product. Over 220 million people have left their place of registration, while almost none had when reforms began, creating time-varying errors in estimates of per capita income of subnational units. We survey empirical articles in blue ribbon journals, in development journals, and in regional and urban economics journals that use China's subnational data. Over 80% of articles use these data erroneously; most commonly the wrong population or employment counts are used to measure the size of subnational units, and per capita data are calculated with the wrong denominator for how variables are interpreted. We provide examples of errors from each group of journals, and a critical test of one highly cited study. Specifically, we show that if hukou registrations are erroneously used to measure the local population, following existing practice, conclusions about driving forces for urban area expansion are reversed. We give recommendations for more careful use of China's subnational population and per capita data.     

Soft commodities and the global financial crisis: Implications for the economy,resources and institutions

Over the past decade, soft commodities have been subjected to increasing speculative price fluctuations. Following the 2008 financial crisis, most studies have highlighted causal relationships between price volatility, derivative and future markets for underlying financial assets as well as agricultural and mineral commodities. This article investigates the multifaceted effects of unrestrained financialization of the resources and goods markets and its implications for agricultural markets and soft commodities for purposes other than direct human consumption. We place a particular emphasis on the process of commodification of food and non-food crops and their use as green source of liquid fuels (i.e. soy, sugar cane, palm oil, jatropha, and canola). It is argued that speculation in financial markets has led to spillover effects across commodity and resource markets. More importantly, speculation and price volatility in the commodity markets has had a direct bearing on the resource markets and organization and appropriation of common-pool resources. The article sheds further light on the causal relationship between derivative markets, hedging techniques, financial yields and price volatility and spillover effects in the market for food and soft commodities.     

A text message away: ICTs as a tool to improve food security

The growing use of ICTs around the world, particularly cellular phone technology, provides a significant development opportunity. Under certain situations, ICTs can improve rural households’ agricultural production, farm profitability, job opportunities, adoption of healthier practices, and risk management. All these effects have the potential to increase wellbeing and food security in rural areas of developing countries. Several challenges to effectively scaling up the use of ICTs for development remain, however. Taking advantage of the opportunities provided by ICTs depends on increased connectivity of marginalized population groups, the content and usefulness of the information provided through ICTs, and the capacity of households in rural areas to understand and act on the information that they receive. We need innovative ways to bring together the public and private sectors to ensure that the three Cs (connectivity, content, and capacity) are addressed as a whole.     

Tariff Liberalisation,Price Transmission and Rural Welfare in China

China's tariff liberalisation as part of its WTO accession application and eventual agreement has been thoroughly analysed in the literature. However, much of this literature is based on forward‐looking ex‐ante analyses and few studies provide empirical evidence on its actual impact. We fill in this gap by evaluating empirically the welfare effects of China's actual tariff liberalisation on Chinese farmers during the 1997–2010 period. By estimating the domestic market price effects of China's tariff liberalisation and the associated wage earning effects, we find that on average Chinese farmers were able to gain more from reduced consumption prices than they would lose from reduced agricultural and wage income due to tariff liberalisation. Welfare gains over time are estimated to be positively correlated with the actual degrees of tariff liberalisation, implying that relatively more gains were realized immediately before and after China's WTO accession in 2001, as compared to the more recent period when relatively little liberalisation was carried out. Farmers’ rising non‐agricultural income and increasing consumption shares of non‐agricultural products are important determinants of these positive average welfare effects. Moreover, welfare gains from tariff liberalisation are shown to be distributed unevenly across Chinese provinces and income levels, with farmers located in coastal provinces and at higher income levels gaining more than their counterparts in remote provinces and at lower income levels.