The anatomy of fragile states in Sub‐Saharan Africa: Understanding the interrelationship between fragility and indicators of wellbeing

According to most classifications, Sub‐Saharan Africa is the region of the world with the highest presence of fragile states. In this paper we examine the relationship between fragility and poverty, suggesting that countries may become trapped in a vicious circle of fragility and low levels of wellbeing. We consider fragility as a continuum and begin by reviewing available measures. These show the high presence of fragility in Sub‐Saharan Africa and allow the more fragile countries to be identified. There is seen to be a strong association between fragility, poor growth performance, and lower wellbeing in Sub‐Saharan Africa. Building on the strong evidence for the two‐way relationship between economic growth and poverty, we present an analysis of how the vicious circle linking poorer welfare outcomes and fragility may be able to be broken. We argue that building successful institutions is key here, and this can be enabled by specific policy interventions that are both poverty reducing and productive.     

Measuring the Competitiveness of China's Processed Exports

China's surplus in processing trade remains large. Processed exports are final goods produced using parts and components that are imported duty free. Because much of the value‐added of these exports comes from East Asia, exchange rates throughout the region should affect their foreign currency prices. This paper presents data on value‐added exchange rates for processed exports over the 1993–2013 period and reports that they significantly affect exports. While the renminbi appreciated 36 percent between the beginning of 2005 and the end of 2013, exchange rates in supply chain countries depreciated. This has mitigated the effect of the RMB appreciation on the price competitiveness of processed exports.     

Investigating China's Disaggregated Processed Exports: Evidence that Both the RMB and Exchange Rates in Supply Chain Countries Matter

China's trade surplus is entirely in processing trade. Processed exports are final goods produced using parts and components coming from supply chain countries. Many claim that because much of the value added of China's processed exports comes from other countries, the renminbi should not affect China's processed exports. To investigate these issues, this paper disaggregates processed exports into their two main categories, processing with imported materials (PWIM) exports and processing and assembly (PAA) exports. For PWIM exports, much of the value added comes from China while for PAA exports most of the value added comes from supply chain countries. DOLS results indicate that exchange rates in supply chain countries affect both types of exports and that the renminbi significantly affects PWIM exports, but not PAA exports. These results indicate that both the renminbi and exchange rates in supply chain countries matter for processed exports.     

Reducing the Number of Pesticide- Related Illnesses: The Impact on Household Incomes in Indonesia

The increasing number of human health problems caused by the use of pesticides serves as a warning to countries to develop preventive programs Developing countries, however, are concerned about the effect of such programs on household incomes. With Indonesia as a case study, this paper presents a procedure to broaden a Social Accounting Matrix to include the impact of agricultural pesticide use on human health This approach utilises the Constrained Fixed Price Multiplier method to analyse the effect, on the household incomes of different socio-economic classes, of government programs that are designed to reduce human pesticide-related illnesses The results show that reducing such illnesses through the Safe Use of Pesticides program or the Integrated Pest Management program induces a more equal income distribution.     

Understanding Japan's Capital Goods Exports

Japan is the leading supplier of sophisticated capital goods to East Asian countries. These goods embody advanced technologies and facilitate learning and productivity growth. Capital goods also represent 30–40% of Japan's exports. This paper investigates the determinants of these exports. Results from dynamic ordinary least squares estimation indicate that exports depend on exchange rates, income in the importing countries and downstream countries' exports to the rest of the world. Results from out‐of‐sample forecasts indicate that Japanese exports crashed in 2009 because of the perfect storm of a yen appreciation, a global slowdown and a collapse in Asia's exports.     

The effect of exchange rate changes on Japanese consumption exports

This paper investigates how exchange rates affect Japanese exports. This is difficult because many of Japan's exports are used to produce goods for re-export. An appreciation in the importing country that decreases exports can decrease its imported inputs from Japan. To avoid this bias we examine consumption exports. Using a panel dataset of Japan's consumption exports to 17 countries over the 1988–2009 period, we find exchange rate elasticities of about one. These results indicate that the large swings in the value of the yen over the last decade have caused large swings in the volume of Japanese exports.     

General Equilibrium Approach for Poverty Analysis: With an Application to Cameroon

Abstract: In this paper we use a computable general equilibrium model to study the impact of a trade shock and a tariff reform on household poverty for an archetype developing country. Unlike other studies, we present the income distribution of each household group as a Beta statistical distribution. In contrast to other studies, this paper presents the poverty lines as being endogenous. With this specification, the poverty line will change following a variation in relative prices. With the new distributions and poverty line, the poverty levels of the base year are compared with the ex‐post values. Foster, Greer and Thorbecke's (1984) poverty measures are used. We work with the Cameroon household survey data of 1995–96. We consider two scenarios. The first is a 30 percent fall in the world price of the country's export crop and the second is a reduction of 50 percent in the country's import tariffs. For the first simulation, results indicate a drop in all household incomes and a decrease in the poverty line. Unilateral trade liberalization also has negative consequences on all household incomes. As in the first simulation, the poverty line decreases with a unilateral trade liberalization. In the trade liberalization simulation, the poverty line effect counters the income effect in most cases analyzed. In the other simulation, the poverty line effect attenuates the decrease in the poverty measures.