Macroeconomic costs to large scale disruptions of food production: The case of foot- and-mouth disease in the United States

We forecast the economic consequences of a widespread contamination of the food system based on a hypothetical outbreak of foot-and-mouth disease (FMD). Since the immediate effect on the livestock sector could affect the entire supply chain and US livestock, meat and dairy exports, we measure these impacts using GTAP, a multi-region, multi-sector computable general equilibrium (CGE) model of the global economy. The immediate “shocks” to the US livestock, raw milk and other animal products sectors indirectly affect all sectors of the economy, as well as international markets and trade. We decompose these effects due to each component of the initial shocks, and estimate the importance of these shocks to the national food system for the Mid-Atlantic Region using IMPLAN. Our GTAP results indicate that losses to the USA economy would be about $11.7 billion, and with the ripple effect throughout the rest of the world including beneficiary nations (Argentina, Brazil, Latin America, Australia and New Zealand) and losers (Canada, Mexico, European Union) would be 14.1 billion. We estimate the proportion of the domestic impact affecting the Mid-Atlantic Region. Based on a regional input–output model of that region, we estimate that total losses in value added are nearly $800 million; losses in labor income total about $565 million; and there are job losses of just over 12 thousand.     

收入增长中城乡居民畜产品消费结构趋势实证研究——以浙江省为例

基于浙江省城乡居民固定观测点的调查数据,细分不同产品种类,采用扩展线形支出系统（ELES）模型,实证研究了收入增长过程中城乡居民畜产品消费结构的变动趋势。研究结果显示：随着人均收入的增加,浙江省城镇居民畜产品的消费变化主要表现为猪肉消费的减少及奶类消费的增加;农村居民对家禽类产品有较高的边际预算份额及较大的需求收入弹性。     

Comparing Conventional and New Policy Approaches for Carnivore Conservation: Theoretical Results and Application to Tiger Conservation

New policy approaches to facilitate the co-existence of wildlife and livestock are needed for situations where predation incidents greatly impact households’ income and retaliatory killing threatens endangered carnivore species’ survival. In this paper, models are developed to assess how two alternative policy approaches impact a herder’s decisions on carnivore hunting and livestock protection. We find that while the well-established ex-post compensation policy induces suboptimal livestock protection it can generate sufficient incentives for the herder to refrain from hunting so that the carnivore population reaches its socially optimal level. Performance payments are proposed as alternative policy. They are found not to distort livestock protection incentives and can also help achieve a socially optimal carnivore population level. Which of the two scheme types gives rise to less cost is ambiguous. An empirical analysis of the model with data from tiger-livestock conflicts in India is presented.     

EU accession and foreign-owned firms in Bulgaria

Bulgaria signed the European Union accession treaty in 2005. Accession caused an increase in the volume of inward foreign direct investment flows (IFDI). We analyse World Bank BEEPS firm-level data for 2007 to understand the characteristics and performance of foreign firms in Bulgaria. Regression analysis reveals that foreign firms are larger, have lower capital-to-labour ratios, are more likely to export and are more likely to locate in Sofia. However, foreign firms have had limited success in Bulgaria. They do not exhibit higher sales growth and, in manufacturing, carried out lower capital investment in machinery than domestic firms. The numbers of visits from tax officials is the same for domestic and foreign firms in manufacturing, and lower for foreign firms in the service sector. However, firms with higher exports-to-sales ratios and higher absolute sales were subjected to a higher number of visits from tax officials. These findings suggest that a range of institutional challenges remain for foreign firms in Bulgaria.     

Joint Management of Wildlife and Livestock Disease

We analyze a bioeconomic model of a multiple-host disease problem involving wildlife and livestock. The social planner’s choices include targeted (i.e., infectious versus healthy) livestock harvests, non-targeted wildlife harvests, environmental habitat variables, and on-farm biosecurity to prevent cross-species contacts. The model is applied to bovine tuberculosis among Michigan white-tailed deer and cattle. We find optimal controls may target the livestock sector more stringently when the livestock sector exhibits low value relative to the wildlife sector. This is in contrast with the conventional wisdom on the issue that controls should primarily target wildlife species that serve as disease reservoirs.     

货币升值的后果--基于中国经济特征事实的理论框架

本文在一个贸易品/非贸易品两部门模型中,讨论了真实汇率外生条件下部门之间全要素生产率变化对产业结构与贸易余额的影响。我们发现,在保持名义有效汇率固定与国内物价水平稳定的货币政策组合下,市场经济体制改革所带来的贸易品部门相对非贸易品部门更快的全要素生产率进步所带来的不仅是经济增长,还会造成(1)工业/服务业产业结构扭曲;(2)贸易顺差扩大;(3)工资水平下降,并阻碍了农村劳动力向城市转移;(4)工资下降与利润率上升,收入分配恶化。解决上述问题的关键在于人民币汇率水平调整与非贸易品部门市场化改革和全要素生产率提高。     

Catching up: The role of demand, supply and regulated price effects on the real exchange rates of four accession countries

The main aim of this paper is to examine the exchange rate behaviour of a group of four transitional, EU accession countries, with a view to making policy recommendations regarding their full accession to the European Monetary Union. We employ a dynamic OLS panel estimator to investigate the relative importance of demand and supply influences on the exchange rates of these countries. Our analysis shows that both supply‐ and demand‐side effects are important for the accession countries, although their overall effect on inflation differentials and competitiveness seems to be small. An additional focus of the paper is the examination of the role that administrated, or regulated, prices and the productivity of the distribution sector play in the real exchange rate dynamics. Using a unique database we show that administrative prices have been a powerful force behind price and real exchange developments for our group of accession countries. The distribution sector is shown to have an independent effect on the internal price ratio over and above that generated by the Balassa–Samuelson effect.     

Reforming state owned enterprises in China: Effects of WTO accession

In December 2001 China became a member of the World Trade Organization (WTO). By signing the accession protocol, China not only agreed to reform its trade policy, but it also accepted regulations that implied reductions on government subsidies to the state-owned sector. In this paper we claim that the latter, largely ignored in the literature, generate important welfare gains that need to be attributed to WTO accession. We develop a dynamic general equilibrium model with state and private enterprises. We calibrate the model to the Chinese economy and we quantitatively assess the economic effects of reducing subsidies to the state sector as required by the WTO. We find the welfare benefits of such reduction in subsidies to be substantial. Using the context of China, this paper identifies a new channel through which WTO accession increases a country's welfare: it induces reforms on domestic subsidies which lead to an increase in economic efficiency.     

Income distribution,technology and employment in developing countries: An application to Ecuador

In this paper the relationships between the distribution of income, technology and employment are analyzed for the industrial sector of Ecuador. The main conclusion is that the effect of a redistribution of income in favour of the lower income groups on employment is positive but of little significance. However, if such redistribution is complemented by a technological policy which promotes the use of more labour intensive techniques where economically feasible, and by orientation of the increased demand for consumption goods, employment in the industrial sector can be increased by around 18 percent. An integrated model of the input-output type is used to analyzed the effects of different policies on the variables mentioned.     

Explaining the increase in inequality during transition

This paper attempts to explain the increase in inequality that has been observed in all transition economies by constructing a simple model of change in composition of employment during the transition. The change consists of the 'hollowing-out' of the state-sector middle class as it moves into either the 'rich' private sector or the 'poor' unemployed sector. The predictions of the model are contrasted with the empirical evidence from annual household income surveys from six transition economies (Bulgaria, Hungary, Latvia, Poland, Russia and Slovenia) over the period 1987-95. We find that the most important factor driving overall inequality upwards was increased inequality of wage distribution. The non-wage private sector contributed strongly to inequality only in Latvia and Russia. Pensions, paradoxically, also pushed inequality up in Central Europe, while non-pension social transfers were too small everywhere and too poorly focussed to make much difference.     

Environmental policy in the two-country-case

Summary The paper analyzes the problem how environmental policy affects sector structure, the allocation of resources, relative price (and comparative advantage) and national income in a two-country case with varying terms of trade. The frame of reference is a two-sector model in which production generates pollutants as a joint product. If a country exports the pollution-intensively produced commodity environmental policy will improve its terms of trade under suitable conditions with respect to demand. Whereas in the political debate the negative effect of environmental policy on the international competiveness of a country is stressed, the terms-of-trade effect gives more leeway to environmental policy. The effects on output, export, imports and the other variables of the system are discussed.Help for calculating the results is acknowledged to J. Eichberger. I acknowledge helpful comments from an anonymous referee. I am also grateful to the Deutsche Forschungsgemeinschaft for financial support.     

Regional Income Disparity and the Size of the Public Sector

This paper explores the impact of income inequality between jurisdictions on government decision making affecting the size of the public sector. We model policy choices as the outcome of regional representatives' negotiations in the legislature. We show that the more unequal interregional income distribution is, the greater the underprovision of public goods. More specifically, greater interregional income disparity leads to a smaller public sector. A wealthier economy as a result may have a relatively smaller government size when income disparity increases.     

基于农业废弃物资源化利用的农业循环经济发展模式探讨

基于农业废弃物资源化利用的农业循环经济发展模式是一种具有普适性的农业循环经济发展模式,该模式分为基于农作物秸秆资源化利用的农业循环经济、基于畜禽粪便资源化利用的农业循环经济、以沼气为纽带的农业循环经济三种典型类型,其发展需要在运行机制、公共政策、技术人才等方面构筑起完善的保障体系。     

An economic analysis of the possibility of reducing pesticides in French field crops

The paper aims to study the effects of reducing pesticide use by farmers in the arable sector in France and the feasibility of a policy target of reducing pesticide use by half. The originality of the approach is to combine statistical data and expert knowledge to describe low-input alternative techniques at the national level. These data are used in a mathematical programming model to simulate the effect on land use, production and farmers' income of achieving different levels of pesticide reduction. The results show that reducing pesticide use by 30% could be possible without reducing farmers' income. We also estimate the levels of tax on pesticides necessary to achieve different levels of reduction of pesticide use and the effect of an incentive mechanism combining a pesticide tax with subsidies for low-input techniques.     

Fresh surface water resource allocation between Bulgaria and Greece

This paper addresses the important issue of transboundary sharing of fresh surface water resources, including quantity and quality dimensions. It carves a simple economic model of the benefits which can be generated by maximizing the joint profits earned, when the resource is shared efficiently between two countries. The appropriate policy instrument towards this end is a bilateral agreement to charge the same water price to all water users in a given sector. Market clearance will then follow to determine the optimal water price. The case of the Nestos river flowing through Bulgaria and Greece, but overexploited by Bulgaria, in the Balkans is used as a case study. The empirical estimation of a fixed proportions production function for corn derives a marginal water value of the Nestos water for Greece. This value, which applies under the current non-cooperative solution, is higher than the optimal water price in the cooperative solution.     

National Income Accounting and Public Policy

Modern national income accounting was designed in the early 20th century for the purpose of providing improved indicators about the performance of the economy so that government policy makers could better control the economy. The way that performance is measured affects the types of policies used to try to accomplish policy goals. Two attributes of national income accounting are analyzed for their effects on economic policy. First, government production is included in the national income accounts at cost, rather than at market value as private sector output is measured. This biases policy toward a larger public sector. Second, output is measured as a homogeneous dollar amount. This biases policy toward focusing on increasing quantities of inputs and outputs in the production process, rather than on innovation and entrepreneurship, which are the true engines of economic progress. Economic policy could be improved by focusing less on national income as an indicator of policy, and more on the underlying processes that foster economic progress.     

A two-sector Kaleckian model of growth and distribution with endogenous productivity dynamics

This study extends a two-sector Kaleckian model of output growth and income distribution by incorporating endogenous labour productivity growth. The model is composed of investment goods and consumption goods production sectors. The impact of a change in wage and profit shares on capacity utilisation and output growth rates at the sectoral and aggregate levels are identified. The study reveals short-run cyclical capacity utilisation rates and productivity growth dynamics. Even if the short-run steady state is stable, the capital accumulation rate in the consumption goods sector must decrease more than that in the investment sector for long-run stability. When simultaneous rises in profit shares in both the sectors affect long-run aggregate economic growth differently at a steady state, the distributional interests between the same class in different sectors may hamper the long-run economic growth. A policy message is that the effect of income distribution on industrial output growth is not always beneficial. These phenomena are specific to two-sector models and cannot be observed when using conventional aggregate growth models.     

Land-use changes, forest/soil conditions and carbon sequestration dynamics: A bio-economic model at watershed level in Nepal

A dynamic bio-economic model has been used at watershed level in Nepal to analyze the land-use changes, forest and soil conditions and their resultant impacts on carbon (C) sequestration. Planning horizon of the model extends over a period of 25 years. The objective function is maximization of the sum of discounted net income flows from agriculture, livestock and forestry productions; imputed value of leisure and labour hiring out activities subject to annual constraints on land, labour and capital availability along with the fulfilment of minimum cash and consumption requirements. The seven scenarios analyzed by the model are: business as usual (BAU), reduction in population growth rate from 2 to 1.5% p.a., increased prices of major crops by 10 and 20%, reduction in emigration of active labour force from the watershed from the current rate of 20–15 and 10%, and increase in discount rate from 5 to 10%. The results indicate that reduced labour emigration rates and increase in the prices of major crops lead to expansion of cultivated area and shift from one land use to the others. Land clearing becomes more severe with decline in labour emigration rate. Up to 10% increase in the prices of agricultural crops does not have noticeable effect on total land clearing. Increase in discount rate leads to less land clearing, more biomass harvesting and higher net C sequestration as compared to the BAU scenario. Assuming a C price of 10 USD per MgC and 5% discount rate, the net present value of C sequestration for the first 25 years is estimated at 1.83 mill USD in the BAU scenario, varying from 0.16 mill USD to 2.26 mill USD, as respectively the lowest and highest values for the seven scenarios analysed. A reduction in population growth and maintenance of current rate of off-farm employment are suggested for slowing down the expansion of cultivated land area, and thereby reducing the forest/soil degradation and C emissions. This in turn would enhance the income potential from C sequestration.     

Production risk and the functional distribution of income in a developing economy: tradeoffs and policy responses

We develop a stochastic endogenous growth model to examine the relationship between the volatility of growth and the factor distribution of income. Our framework incorporates two important features of developing economies: the co-existence of a modern and a traditional sector and the fact that the income generated in the traditional sector can escape taxation. The relationship between volatility and factor distribution is complex, depending upon the source of risk and the elasticity of substitution between capital and labor in the formal sector. The policy options available to the government for counteracting changes in volatility are analyzed. The second best optimal tax structure is also characterized.     

外包与工资差距:基于工业行业数据的实证研究

笔者以Feenstra等人的三要素模型为基础,分析了国际外包影响发达国家及发展中国家熟练劳动力与非熟练劳动力之间工资差距的理论机制,运用我国工业行业面板数据,实证检验了外包对我国工业行业总体及分部门工资差距的影响。结果表明:外包和技术进步对我国工业行业熟练劳动力与非熟练劳动力之间工资差距的扩大均存在明显的正效应,但外包对劳动力资源密集型部门和中等技术部门的影响效应相对更强。