Corn and Mexican Agriculture: What Went Wrong?

The debt crisis of the 1980s caused the development strategy pursued by the Mexican government to be subject to a radical adjustment process that triggered deep repercussions for the agricultural sector and its farmers, particularly in the corn sector. In combination with the aggressive agricultural policies sustained by the U.S. government, the new approach meant that Mexican agriculture operated within an economic environment characterized by significant asymmetries and distortions, some internal and some imposed by major trading partners. This article summarizes and documents the most salient results of these policy events as well as their implications for the corn sector, and discusses some of the challenges to repair the agricultural sector in Mexico.     

Book review

This paper has two messages. First: producer services should no longer be: considered costs or necessary evils in the economy, but he understood as the dynamic cornponr:nts of the extremely integrated system of activities which a modern economy forms. Second: in a local context, producer services no longer simply passively follow the development of the goods-producing sectors, but increasingly play a leading role, partly through exporting thseir services to other regions and partly through the synergies which their services create in the local goods producing sector. Hence, local economic policies should also be directed towards the producer services.     

The economic impact of the information sector in Singapore

The information sector, delineated as encompassing activities associated with the production and dissemination of information goods and services, is recognised as a dynamic growth sector in developed as well as newly-industrialising countries. Using an input-output methodology, this paper attempts to measure the magnitude and assess the economic impact of the information sector in Singapore. The results are found to be favourable although a number of caveats may be raised regarding its apparent import dependency and foreign exchange earning capability, which has turned from positive to negative over the ten-year period 1973–83. Other issues are also raised concerning the institutional framework, both domestic and international, necessary to support the sector both efficiently and flexibly. Policy implications are drawn from the results of the input-output analysis to consolidate and reinforce current policies to promote information technology in Singapore.     

REGIONAL AGRICULTURAL PRODUCTION SYSTEMS: ESTIMATES FOR WESTERN AUSTRALIA

A regional model, be it computable general equilibrium or partial equilibrium in construct, which is based on the national parameters would certainly provide misleading results if the regional economy or sector is significantly different from its national counterpart. For a credible and useful quantitative analysis of the regional impacts of changes in, say, government policies or international events, one thus needs an empirically based economic model that reflects the key features of the regional economy or sector concerned. This is the motivation for this paper, which estimates a disaggregated agricultural production system for Western Australia (WA): a key farming State of Australia. The paper uses a profit function approach that explicitly recognizes jointness in agricultural production and various climatic zones in WA, and an estimation procedure that involves the Diewert–Wales decomposition technique. It presents estimates of elasticities of supply responses and input demands in WA agriculture, and compares these with the national estimates.     

A supply-demand model of public sector size

We develop a supply-demand model for the public sector with a political equilibrium. The model considers the inefficiencies caused by taxes and includes costs associated with the provision of public goods to consumers. We show that the size of the public sector may depend on the median voter's income, population size, costs associated with paying tax, and quality of institutions, all of which reflect the costs of provisioning public goods. The estimates for the Organisation for Economic Co-operation and Development member countries are compatible with theoretical predictions; however, they do not confirm Wagner's law, which holds that the public sector share does not grow with an increase in income. A greater dependency ratio and the Gini coefficient increase demand for redistribution policies. Greater government effectiveness is a supply-side factor that increases the public sector's share in an economy.     

Minimisation of uncertainty in decision-making processes using optimised probabilistic Fuzzy Cognitive Maps: A case study for a rural sector

Several studies have focused on methods of increasing system and uncertainty knowledge for socio-economic and environmental policies; however, the nonlinearity and dynamism of real world increase the gap between uncertainty depiction and its evaluation in policy strategies. This work attempts to implement a methodology that is able to minimise uncertainty in decision support tools related to rural planning and management. Fuzzy Cognitive Maps, the Dempster–Shafer theory and nonlinear optimisation were applied to achieve the above-mentioned goal. The method was tested to describe suitable policies and intervention strategies to address the effects of the recent economic crisis in the agricultural sector.     

On the role of policy interventions in structural change and economic development: The case of postwar Japan

In this paper, we study the structural change occurring in Japan's post-World War II era of rapid economic growth. We use a two-sector neoclassical growth model with government policies to analyze the evolution of the Japanese economy in this period and to assess the role of such policies. Our model is able to replicate the empirical behavior of the main macroeconomic variables. Three findings emerge from our analysis. First, neither price and investment subsidies to the agricultural sector, nor industrial policy plays a crucial role in the rapid postwar growth. Second, had there existed a labor migration barrier, the negative long-run level effect on output would have been substantial. Finally, TFP in non-agricultural sector is mostly responsible for the rapid growth of Japan in the post-war period.     

Comparisons of agricultural productivity growth in China and India

We measure and compare agricultural total factor productivity (TFP) growth and its components (efficiency and technical change) in China and India and test the TFP series for the existence of structural breaks relating the evolution of TFP to policy milestones. Our results show that agricultural TFP growth accelerates in China after 1979 and in India after 1974, although China’s agricultural sector clearly outperforms India’s. The main explanation of these differentials is that agricultural growth in China benefited from more fundamental institutional and policy reforms in agriculture than India. There is some evidence that the transformation of industry in China was also important for agricultural TFP growth. Manufacture growth absorbed labor and reduced employment in agriculture, creating incentives for capital investment and technical change that kept output per worker in agriculture growing at high rates. Fewer changes in agricultural policies and in the dynamics of manufacturing in India resulted in slower growth in agricultural productivity, despite policy changes that accelerated economic growth in recent years.     

Expansionary effects of the welfare state in a small open economy

We examine the relationship between welfare state policies and economic performance in a small open economy with (i) free trade in final goods and international capital mobility, and (ii) aggregate increasing returns to scale. Contrary to the conventional wisdom, we find that a retrenchment of welfare programmes is not an inevitable consequence of economic integration. Instead, by improving the exploitation of aggregate scale economies, social expenditure policies and international openness complement each other in facilitating an improvement in economic performance that can sustain a more generous welfare protection.     

AGRICULTURAL POLICY AS A SOCIAL ENGINEERING TOOL: A NEW JERSEY CASE STUDY

This study uses logistic regression to examine the preferences for social engineering policies in the agricultural sector in a New Jersey case study. It finds that farm operators are unlikely to support a policy allowing countries to restrict trade to pursue domestic economic and social policy goals if the policies affect international trade. In particular, it suggests that farm operators with annual gross sales including government payments between $500 000 and $999 999 are 80 percent less likely to indicate such a preference. Farm operators with advanced degrees, some college education, and a high school diploma are also unlikely to indicate such a preference. In contrast, farm operators who receive no income from farming or ranching and those who receive a percentage of family income from farming or ranching indicate that countries should be allowed to restrict trade to pursue domestic economic and social policy goals even if the policies affect international trade.     

EXPORTS, URBAN GROWTH, AND ECONOMIC GROWTH IN SUB-SAHARAN AFRICAN COUNTRIES

Several cross-countries regression analyses have revealed that exports positively contribute to economic growth in less developed countries, implying that apart from the increases in the stocks of labor and capital, growth can also be stimulated by reallocating resources from the less efficient non-export sector to the more productive export sector. This paper re-specifies the relation between exports and economic growth for non-urban goods exporting African countries. The impact of exports on the growth rate of national income is analyzed along with that of the growth of population in the urban region.     

Price Scissors, Rationing, and Coercion: An Extended Framework for Understanding Primitive Socialist Accumulation

This paper re-examines the current debate on price scissors based on an extended framework, in which the production and trade of industrial consumer goods within the rural sector is incorporated. It confirms that in the economy considered by Preobrazhensky, consumer rationing, especially of industrial goods in rural areas, is prevalent. Under the binding rationing the price response of agricultural surplus cannot be determined theoretically. This finding reopens the field for empirical investigation. The paper identifies the conditions that guarantee the validity of Preobrazhenshy's two propositions: (1) the state can increase its capital accumulation by moving the terms of trade against peasants, and (2) the urban workers need not necessarily suffer therefrom. It demonstrates that in order to ensure the validity of these two propositions, besides the need to assume positive price response of agricultural surplus and of labour force input, food rationing in urban areas and the rationing of major industrial consumer goods in rural areas are essentially required. As a consequence, the paper suggests that the price-scissors type of regulation would induce the state's coercion on peasants to collect their food surplus. This revised version was published online in July 2006 with corrections to the Cover Date.     

ASSESSING THE IMPACT OF DISTRIBUTIVE POLICIES ON THE BRAZILIAN ECONOMY USING AN SCGE MODEL

This study investigates the impact of macroeconomic policies on the Brazilian economy. We present a two-sector, open-economy, Structuralist Computable General Equilibrium model that distinguishes among three economic classes and assumes no financial sector. The Social Accounting Matrix for Brazil in 2006 serves as a benchmark for our model. We compare the medium-run effects of five experiments: an income transfer towards formal workers, a transfer to informal labour, an investment shock, an exchange rate depreciation, and a policy mix that combines (exchange rate) depreciation with income transfer towards modern (sector) workers. The policy measures reinforce each other in terms of their potential to enhance growth. Our findings underscore the importance of redistributive policies to foster economic expansion.     

Agricultural exports and economic growth in Pakistan: an econometric reassessment

Agriculture sector works as backbone of Pakistan economy. In this modern era, exports work as locomotive of growth train. Pakistan earned a handsome amount through exports of agricultural raw material and refined products. This research investigates that either there is unidirectional or bidirectional association between agricultural exports and economic growth in Pakistan? For empirical investigation of relationships between economic growth and agricultural exports in Pakistan this study used most reliable econometric estimation tools, augmented Dickey–Fuller unit root test, Johansen co-integration and Engle–Granger causality tests for 45 time series annul observations from 1970 to 2014. This research winds up that Pakistan’s agricultural exports have positive but insignificant association with gross domestic product growth. It is due to the primary and raw material agricultural products exports which cannot compete in international markets due to close competitions, lower quality and dearer price. Consequently, receive a trifling amount as exports earnings; contribute slightly in national economic growth.     

Sectoral Effects of News Shocks

This paper argues that an aggregate news shock reveals news about technological improvements in the durable goods sector. Better technological prospects translate into large responses of the fundamentals in the durable goods sector; much larger than the responses of the fundamentals in the non‐durable goods sector. These better technological prospects, contrary to common belief, do not induce short‐run comovement among fundamentals within either of the two sectors. The behaviour of inventories, an important margin that durable goods producers can use to buffer news shocks, proves to be crucial for reconciling the effects of news shocks in a two‐sector model with the data.     

UNEMPLOYMENT, TRANS-BOUNDARY POLLUTION, AND ENVIRONMENTAL POLICY IN A DUALISTIC ECONOMY

This study is intended to examine the effects of environmental policies on employment, the use of polluting goods, and the unemployment rate under a model introducing trans-boundary pollution affecting the productivity of the other productive sectors. That model was designed by Copeland and Taylor (1999) , and transformed into a dualistic economy model constructed by Harris and Todaro (1970) . Results of our analyses show that enforcement of environmental policy through control of emissions taxes does not necessarily worsen urban unemployment. Therefore, we show that it is not usually proper to maintain that some environmental pollution cannot be avoided to establish economic development. Moreover, we analyze the effect of some environmental policies on social welfare and discuss the effectiveness of those policies.     

BANKING SECTOR POLICIES AND FINANCIAL DEVELOPMENT IN NEPAL

ABSTRACT This paper examines the interactions between banking sector policies, financial development and economic growth in Nepal employing recently developed time series techniques. Policies such as interest rate controls, directed credit programmes, reserve and liquidity requirements are identified and measured. A summary measure of repressive policies is constructed by the method of principal components. This measure is found to have a statistically significant influence deepening, independently of the real interest rate. We argue that our findings are consistent with the hypothesis of market failure. Exogeneity tests suggest that financial deepening and economic growth are jointly determined. Thus, policies which affect financial deepening may also have an influence on economic growth.     

DEVELOPMENT OF REGIONAL SOCIAL ACCOUNTING MATRICES WITH DETAILED AGRICULTURAL LAND RENT DATA AND IMPROVED VALUE-ADDED COMPONENTS FOR THE USA

We describe a method for creating social accounting matrices (SAMs) with detailed agricultural land rent data for any arbitrary subset of the 48 contiguous states in the USA. Data on land use and land rents from various public sources is merged with national accounts data. The method reorganizes the rental income of persons concept present in national accounts to payments to conventional primary factors of production. This method also reallocates portions of the indirect business tax account to the appropriate sales and import tax accounts. SAMs created using this method should be useful inputs into input–output or computable general equilibrium models explicitly representing a heterogeneous land market and analyzing the economic effects of agricultural, bioenergy, water and climate policies on land-use change, land rents, agricultural commodity markets, trade and households’ welfare. The method's implementation is freely available, enabling others to rapidly create SAMs with their own desired region and sector aggregations.     

Product diversification,production systems,and economic performance in U.S. agricultural production

The U.S. agricultural sector is experiencing significant structural change. Farm size is rising and activities are broadening, including more off-farm employment, implying economic incentives for larger and more diversified farms, and complementarities among agricultural netputs. We quantify such patterns for farms in the corn belt, by measuring scale economies, and output and input contributions and jointness. We estimate the multi-output and -input production technology by stochastic frontier techniques applied to output and input distance functions. We find that both scope and scale economies have important economic performance implications, and that an input-oriented framework including off-farm income best characterizes agricultural production.     

Informality in developing economies: Regulation and fiscal policies

This paper proposes a unified theoretical framework where formal and informal firms coexist and face the same type of product and labor market imperfections: they have monopoly power in the goods market, they are subject to matching frictions in the labor market, and wages are determined by bargaining between large firms and their workers, through either individual or collective bargaining. Our model matches the main stylized facts on informality for developing countries and appears to be a good candidate for policy analysis. In this framework, we study the impact on informality, wages and unemployment of policies that may be used to reduce informality. We consider changes in product market regulation (PMR) and in two types of fiscal policies, labor taxes and formality enforcement. We find that lessening PMR decreases informality and unemployment simultaneously, indicating that there is not necessarily a tradeoff between informality and unemployment. The tradeoff appears when fiscal policies are used, though. Moreover, the impacts of PMR on unemployment and on wages are larger under collective than individual bargaining. With respect to wage inequality, lessening PMR reduces it, while lower taxes tend to increase the formal sector wage premium.