Agricultural Commodity Price Shocks and Their Effect on Growth in Sub‐Saharan Africa

Commodity price shocks are an important type of external shock and are often cited as a problem for economic growth in Sub‐Saharan Africa. We choose nine Sub‐Saharan African countries that are heavily dependent on a single agricultural commodity for a significant portion of their income. This paper quantifies the impact of agricultural commodity price shocks using a structural non‐linear dynamic model. The novel aspect of this study is that we determine whether the response of per capita GDP for the selected Sub‐Saharan African countries is different to unexpected increases in agricultural commodity prices as opposed to decreases in prices. We conclude that there is very little evidence that an unanticipated price increase (decrease) will lead to a significantly different response in per capita incomes.     

Some comments on the Sraffian Supermultiplier approach to growth and distribution

Abstract

The article discusses the Sraffian Supermultiplier (SSM) approach to growth and distribution. It makes 5 points. First, in the short run, the role of autonomous expenditure can be appreciated within a standard post Keynesian framework (Kaleckian, Kaldorian, Robinsonian, etc.). Second, and related to the first, the SSM model is a model of the long run and has to be evaluated as such. Third, in the long run, one way that capacity adjusts to demand is through an endogenous adjustment of the rate of utilization. Fourth, the SSM model is a peculiar way to reach what Garegnani called the “second Keynesian position.” Although, it respects the letter of the “Keynesian hypothesis,” it makes investment quasi-endogenous and subjects it to the growth of autonomous expenditure. Fifth, in the long run it is unlikely that “autonomous expenditure” is really autonomous. From a stock-flow consistent point of view this implies unrealistic adjustments after periods of changes in stock-flow ratios. Moreover, if we were to take this kind of adjustment at face value, there would be no space for Minskyan financial cycles. This also creates serious problems for the empirical validation of the model.     

Innovation and upheaval: early growth in Greek capital market listings and IPOs from 1880 to the Second World War in the Athens Stock Exchange†

The establishment and growth of the Greek stock market were coincident with development episodes, financial upheavals, and geographic expansions of the country's economy over the period 1880–1940. This article explores the growth of the Athens Stock Exchange through new listings and initial public offerings (IPOs) in the late nineteenth and early twentieth centuries. We examine changes in exchange governance and listing requirements. On a theme not addressed before , we find that simple listings were far more numerous than actual IPOs. IPOs in Greece remained unregulated throughout the period. Their under‐pricing became pronounced in the later parts of the period, especially the 1920s. The study presents data on ‘quasi‐IPOs’ (that is, capital increases shortly after listing) and shows that they offer a more accurate assessment of the demand for the financing of listing firms in an emerging market. Robust evidence is presented to show that as the Exchange developed it also underwent a change in character, becoming more oriented to the domestic market and catering to smaller firms in domestic manufacturing in the post‐First World War era that marked the end of early globalization.     

Recognized intangibles and the present value of growth options

We investigate the relation of recognized intangibles, defined as acquired intangibles net of goodwill, and the market’s perception of firm growth options (PVGO). We find that: (a) on average recognized intangibles are positively associated with PVGO after controlling for intangible expenditures immediately expensed, firm specific characteristics, industry membership and systematic risk (b) the said relation is highly non-linear (negatively skewed) and more strongly pronounced in companies with lower accumulation of R&D Capital; recognized intangibles are not that significant at higher levels of PVGO and whereas firms have committed to in-house technological development, and (c) while adjusted levels of recognized intangibles increase approximately tenfold over the last 35 years their explanatory power to PVGO over the period generally wanes. Our results are informative for the interpretation of recognized intangibles as a summary balance sheet item and therefore useful to users of financial statements forming investment and credit decisions, to policy makers aiming at stimulating firm growth and to standard setters aiming at improving value relevance.     

Segmenting East Asian Tourists to Greece by Travel Motivation

This study compares the push and pull motivations of East Asian (Japanese, Chinese and Korean) tourists who visit Greece and also proposes market segmentation based on travel motivations that transcend the national boundaries of those countries. Four main push factors were identified: “Knowledge”, “Ego-enhancement”, “Escape & Relaxation” and “Novelty”. Similarly, four pull factors were also identified: “Leisure, shopping and safety”, “Variety and cost”, “Culture & heritage” and “Travel arrangements and facilities”. Cross-cultural differences were found regarding the importance of travel motivations. Chinese tourists scored higher than other nationalities for almost all motivation categories. Although the cross-cultural differences are important, this study proposes another way to tackle the market segmentation by conducting an international segmentation based on inherent similarities across different nationalities of travelers. Three segments emerged from that analysis with the “Novelty Seekers” to be the largest followed by the “Want-it-All” and the “Lowly Motivated”.     

Selecting public goods institutions: Who likes to punish and reward?

We study the link between individual attitudes toward uncertainty on the one hand, and preferences over, as well as behavior within, various public goods institutions on the other hand. We incentive‐compatibly elicit preferences over voluntary contribution mechanisms with and without reward and punishment options and then randomly assign subjects to play in one of the four institutions. We find that payoffs are significantly greater when punishment is allowed but that only a small minority of participants prefers such an environment. Somewhat surprisingly, preferences over institutions are generally independent of individual characteristics. Conversely, individual characteristics, including institutional preferences, are significantly predictive of behavior in the public goods game. For instance, risk‐averse individuals preemptively punish more often. This suggests that when studying sanctions and rewards, it is important to consider individual attitudes toward risk and uncertainty—although they may not affect the original selection into institutions.     

The finite-sample effects of VAR dimensions on OLS bias,OLS variance,and minimum MSE estimators

Vector autoregressions (VARs) are important tools in time series analysis. However, relatively little is known about the finite-sample behaviour of parameter estimators. We address this issue, by investigating ordinary least squares (OLS) estimators given a data generating process that is a purely nonstationary first-order VAR. Specifically, we use Monte Carlo simulation and numerical optimisation to derive response surfaces for OLS bias and variance, in terms of VAR dimensions, given correct specification and several types of over-parameterisation of the model: we include a constant, and a constant and trend, and introduce excess lags. We then examine the correction factors that are required for the least squares estimator to attain the minimum mean squared error (MSE). Our results improve and extend one of the main finite-sample multivariate analytical bias results of Abadir, Hadri and Tzavalis [Abadir, K.M., Hadri, K., Tzavalis, E., 1999. The influence of VAR dimensions on estimator biases. Econometrica 67, 163–181], generalise the univariate variance and MSE findings of Abadir [Abadir, K.M., 1995. Unbiased estimation as a solution to testing for random walks. Economics Letters 47, 263–268] to the multivariate setting, and complement various asymptotic studies.     

The Lerner index and revenue maximization

Based on profit-maximizing behaviour, the usual interpretation of the Lerner index is that a zero value reflects competitive behaviour, while a positive value is associated with market power. We investigate to what extent the usual interpretation of the Lerner index remains valid in a setting where firms do not pursue profit maximization, but instead maximize revenues subject to a minimum-profit constraint. We show that a positive Lerner index still indicates market power, but that the magnitude of a positive Lerner index can no longer be used to determine how much market power there is. Furthermore, extra information would be required to draw conclusions about the presence or absence of market power when the Lerner index is zero or negative. We discuss the empirical implications of our results.