Estimation of Agricultural Production Functfons on a World-Wide Basis

Agricultural production is becoming increasingly capital and research intensive. Hayami and Ruttan, along with others, have developed and applied the metaproduction functional approach to the examination of this phenomenon on a worldwide basis. Limitations to the approach derive from a restrictive functional form chosen for estimation, and from a restrictive specification of agricultural capital and land. This study addresses those difficulties by use of the flexible translog functional form for estimation and by specifying an overall agricultural capital index and a land measure incorporating differences in the quality of land (agricultural natural resource) endowments. Estimation results indicate that agricultural comparative advantage in production is likely shifting to developed countries relative to LDC's due to capital constraints in the latter. Also agricultural potential (i.e., land endowments) do not serve to differentiate nations on the basis of agricultural production. Investment in agriculture, including land improvement, is key to the determination of comparative advantage. La production agricole fait appelle de plus en plus a beaucoup de re-cherches et de capitaux. Hayami et Ruttan, avec d'autres, ont developpe et appliqué l'approche fonctionnelle métaproduction pour examiner ce phénomena à l‘échelle du monde. Les limitations de cette approache provienneent de la forme fonctionnelle restrictive choisie pour l'estimation, et de la spécification restrictive de capitaux et terres agricoles. Cette étude traite ces difficultés en utilisant la formule “translog’ fonctionnelle adaptable pour l'estimation et en spécificant un indice du capital agricole global et une mesure de terre qui incorpore les différences du qualité des terres agricoles (ressources agricoles naturelles). Tous les résultats estimatifs indiquent que l'avantage comparatif agricole de production s'incline vers les pays développés parraport aux PMD dû aux constraintes de capitaux dans ces derniers. Aussi la capacité agricole (c'est à dire la richesse des sols) ne sert pas à différencier les nations sur le plan de production agricole. L'investissement dans l'agriculte, notamment l'amélioration de terre, est la cief pour déterminer l'avantage comparatif.     

Good Grief! Anxiety Sours the Economic Benefits of First Offers

Two studies tested whether making first offers influences negotiators’ feelings of anxiety and their sense of satisfaction. The results of Study 1 show that the strategy of making the first offer led to decreased levels of satisfaction with the negotiation process and outcomes. This effect was mediated by perceived feelings of anxiety. Study 2 discerned that anxiety about making the first offer derived from self-perception concerns, represented as anxiety about being taken advantage of by the opposing party. In both studies, anxiety led negotiators who made the first offer to be relatively less satisfied with the negotiation, than negotiators who did not make the first offer, despite the increased economic gains associated with making the first offer.     

Was It Possible to Stabilise the Price of Wool? Organised Wool Marketing 1916 to 1970

Wool is the only Australian commodity for which there has been an attempt to organise price stability through a buffer stock scheme (1970–91). Growers pressed for the introduction of a scheme since the early 1920s. We test the veracity of claims that the sale of the stockpiles optimised growers' returns. We also simulate the likely outcomes of the reserve price schemes (RPS) proposed in 1925 and 1952, respectively. Our findings are that post-war stockpile disposals did not optimise wool growers' incomes, the undercapitalised proposed RPS of the 1920s would have collapsed in the depression, and that the post-1952 RPS would have been in considerable difficulty.     

Procyclical government spending: Patterns of pressure and prudence in the OECD

This paper tests for differences in the cyclicality of government spending across functional categories. Evidence from 20 OECD countries suggests that procyclicality is more likely in smaller functional budgets, but capital spending is more likely to be procyclical for the larger spending categories.     

Can domestication of wildlife lead to conservation? The economics of tiger farming in China

Tigers are a threatened species that might soon disappear in the wild. Not only are tigers threatened by deteriorating and declining habitat, but poachers continue to kill tigers for traditional medicine, decoration pieces and so on. Although international trade in tiger products has been banned since 1987 and domestic trade within China since 1993, tigers continue to be poached and Chinese entrepreneurs have established tiger farms in anticipation of their demise. While China desires to permit sale of tiger products from captive-bred tigers, this is opposed on the grounds that it likely encourages illegal killing. Instead, wildlife conservationists lobby for more spending on anti-poaching and trade-ban enforcement. In this study, a mathematical bioeconomic model is used to investigate the issue. Simulation results indicate that, unless range states are characterized by institutions (rule of law and low corruption) similar to those found in the richest countries, reliance on enforcement alone is insufficient to guarantee survival of wild tigers. Likewise, even though conservation payments could protect wild tigers, the inability to enforce contracts militates against this. Our model indicates that wild tigers can be protected by permitting sale of products from tiger farms, although this likely requires the granting of an exclusive license to sellers. Finally, it is possible to tradeoff enforcement effort and sale of products from captive-bred animals, but such tradeoffs are worsened by deteriorating tiger habitat.     

Exchange Rate Regimes and Foreign Direct Investment Flows to Developing Countries

Drawing on recent advances in exchange rate regime classifications, the paper examines empirically the effect of exchange rate regimes on foreign direct investment (FDI) flows to developing countries. Using system generalized methods of moments estimation on a panel of 70 developing countries for the period 1985–2004, we find that developing countries adopting de facto fixed or intermediate regimes significantly outperform those opting for a flexible exchange rate system in attracting FDI flows. No statistically significant differences in the FDI‐inducing properties of fixes, intermediates and floats are found using the International Monetary Fund official classification.     

Contents of PMM,Volume 29 (2009)

This article appraises the recent UK quantitative easing (QE) monetary experiment. From March 2009 to February 2010, the Bank of England spent £200 billion on gilts and corporate bonds. This experiment represents, as a proportion of GDP, the most ambitious monetary policy ‘mission’ in history. Using several indicators to examine the impact of QE, our analysis leads to a conclusion which, metaphorically, is akin to that ascribed to the 1970 Apollo 13 Moon mission: a ‘successful failure’.     

The Motivation and Effectiveness of Gas Industry Economic Regulation in New South Wales, 1912–39

The oldest industry in Australia subjected to economic regulation is the gas supply industry in the state of New South Wales. In this paper the aims and motivation of the New South Wales Government in establishing the regulatory regime in 1912 and the subsequent effectiveness in achieving them are determined. Initially the regulatory regime was based on ad hoc arrangements, but eventually a more permanent structure was devised that effectively defused political controversy over gas market pricing and stabilised prices rather than substantially lowered them.     

The life and death of the Australian permanent building societies

Throughout the nineteenth and twentieth centuries permanent building societies have been important providers of housing finance in Australia. Despite their long history Australian building societies have been disappearing at a steady rate since the early 1980s as they have converted into banks or become involved in mergers. The purpose of this paper is to give a background account of the history of Australian building societies and put forward explanations for their past popularity and more recent disappearance from Australian housing finance markets.     

A Long-run Analysis of Cooperative Housing Societies and Housing Construction in Victoria, Australia

Housing construction is an important component of economic development. The use of cooperative housing societies is one means of channelling scarce financial resources to housing construction. The aim of this paper is to explore the causes of the rapid growth and subsequent decline of the cooperative housing societies as a source of housing finance in the State of Victoria in Australia during the years 1947 to 1992. Significant evidence is established of a strong relationship between the availability of funding for the societies and the growth of their assets. Mixed results are presented for the impact on the general level of housing construction.