The future of food demand: understanding differences in global economic models

Understanding the capacity of agricultural systems to feed the world population under climate change requires projecting future food demand. This article reviews demand modeling approaches from 10 global economic models participating in the Agricultural Model Intercomparison and Improvement Project (AgMIP). We compare food demand projections in 2050 for various regions and agricultural products under harmonized scenarios of socioeconomic development, climate change, and bioenergy expansion. In the reference scenario (SSP2), food demand increases by 59–98% between 2005 and 2050, slightly higher than the most recent FAO projection of 54% from 2005/2007. The range of results is large, in particular for animal calories (between 61% and 144%), caused by differences in demand systems specifications, and in income and price elasticities. The results are more sensitive to socioeconomic assumptions than to climate change or bioenergy scenarios. When considering a world with higher population and lower economic growth (SSP3), consumption per capita drops on average by 9% for crops and 18% for livestock. The maximum effect of climate change on calorie availability is ?6% at the global level, and the effect of biofuel production on calorie availability is even smaller.     

The valuation of American options in a multidimensional exponential Lévy model

We consider the problem of valuation of American options written on dividend‐paying assets whose price dynamics follow a multidimensional exponential Lévy model. We carefully examine the relation between the option prices, related partial integro‐differential variational inequalities, and reflected backward stochastic differential equations. In particular, we prove regularity results for the value function and obtain the early exercise premium formula for a broad class of payoff functions.     

Firm Productivity and Foreign Direct Investment into Non‐core Activities*

As foreign direct investment (FDI) often originates from multinational enterprises (MNEs) with non‐core activities and not single‐product firms, as MNE theory typically suggests, we hypothesize that such firms are more productive than MNEs without non‐core activities as well as non‐MNE firms. We test this hypothesis using Kolmogorov–Smirnov stochastic dominance Tests and Japanese firm‐level productivity and FDI data for the period 1985–2001. We find that both manufacturing and service multinational firms with non‐core foreign investments stochastically dominate firms without non‐core activities. We also find cost‐complementarities between certain core and non‐core FDI activities that span both manufacturing and service affiliates.     

The EU attitude to unilateral euroization: Misunderstandings,real concerns and sub‐optimal admission criteria

European Union objections to unilateral euroization by applicant countries are categorized as either a misunderstanding of what euroization entails or as justified concern, which should be alleviated by candidates wishing to euroize. Some ways in which candidates can alleviate concerns are discussed, as well as possible adjustments to the Maastricht criteria which might better protect both sides' interests. The paper concludes that the EU would benefit if it accepted unilateral euroization by applicants. JEL classification: E42, F33, F42, P24.     

A comment on The relationship between policies and growth in transition countries

The goal of this article is to point out the likely reasons for the differences between the results obtained by Roxana Radulescu and David Barlow ¹ 1 Radulescu, R. and Barlow, D. (2002). Economics of Transition, 10(3), pp. 719–45. and those presented in most other research papers on the growth determinants in the post‐communist countries. The authors also present the consequences of the impact of the specific composition of the EBRD index on the results of analysis obtained on the basis of econometric models, in which the index is used as a variable.     

Computer-assisted constrained approval voting

Approval voting, proposed independently by several analysts in the 1970s, is a voting system in which voters can vote for as many candidates as they like in multicandidate elections. Recently, S.J. Brams modified this system, introducing so-called constrained approval voting. It is designed for a professional association to ensure equitable representation of different interests. In his new system approval voting is combined with the constraints on the number of persons that can be elected from different categories of members. In the present paper the problem of constrained approval voting is formulated (following the work of R.F. Potthoff) as an integer programming problem. Some computational aspects of this problem are discussed. The paper presents a numerical example illustrating a possibility to apply the discussed voting procedure in the election of members of the Committee for Organization and Management Sciences of the Polish Academy of Sciences.     

Is R&D always growth-enhancing? Empirical evidence from the EU countries

This study provides empirical evidence regarding the effects of R&D on economic growth in a panel of 28 European Union (EU) countries over the period 1997–2014. In particular, we investigate whether the impact of business and government R&D stocks on economic growth depends on the country’s distance to the world technology frontier. The main findings are that in the EU (i) there is positive, statistically significant business R&D stock–economic growth nexus in countries that are relatively close to the frontier and (ii) no statistically significant relationship was found to exist between government R&D stock and economic growth. From the policy perspective, the results suggest that designing proper national policies that allow switching from investment-based to innovation-based strategies at appropriate moments may be far more important than a simple call for increase in R&D expenditures and setting common numerical targets for all EU-member states.     

Product Involvement and the Relative Importance of Health Endorsements

Product involvement is a fundamental part of the buyer decision processes, during supermarket visits, as individuals respond differently to stimuli under differing involvement conditions. This study aims to provide a better understanding of the role of nutritional endorsements in consumers’ food purchasing decisions, when evaluated across high and low involvement products. Although past research in this area does exist, a major limitation is that nutritional endorsements have been studied only for their direct effect as a single, isolated product cue on product perception—rather than its importance relative to other product cues, such as price and product branding. This study overcomes this limitation through a conjoint analysis involving a sample of supermarket consumers. The findings suggest that a health endorsement plays a smaller role in influencing consumer decision-making relative to brand or price, but it is stronger for the higher involvement product. These findings provide nutritional foundations and product managers with quantifiable evidence of nutritional programs’ influence in consumer decision-making, justifying the relevance of such endorsements and giving nutritional foundations specific leads for adaptions in their marketing and educational efforts.     

Auctions with contingent payments — An overview

I survey a literature on auctions with contingent payments, that is auctions in which payments are allowed to depend on an ex-post verifiable variable, such as revenues in oil lease auctions. Based on DeMarzo et al. (2005), I describe a partial ranking of auction revenues for auctions that differ in terms of contract forms, pricing rules and seller commitment and why the revenue equivalence theorem does not apply even in an independent private values setup. I discuss models that incorporate adverse selection, moral hazard, competition between auctioneers, common values and the sale of multiple units.     

Panel Data Evidence on the Effects of Fiscal Policy Shocks in the EU New Member States

We identify fiscal policy shocks in the EU new member states using four different methods. We use panel data techniques to estimate the output response to these shocks. We find that investment and export growth increase after fiscal consolidation and decelerate after fiscal stimulus when the shocks are expenditure‐based. In contrast, private consumption does not respond to fiscal policy shocks. Expenditure‐based fiscal consolidations reduce wages, supporting the view that fiscal consolidation of such composition enhances the competitiveness and profitability of domestic enterprises. In contrast, we do not find evidence of fiscal shocks affecting households' confidence.