Scenarios of the organic food market in Europe

Scenario analysis is a qualitative tool for strategic policy analysis that enables researchers and policymakers to support decision making, and a systemic analysis of the main determinants of a business or sector. In this study, a scenario analysis is developed regarding the future development of the market of organic food products in Europe. The scenario follows a participatory approach, exploiting potential interactions among the relevant driving forces, as selected by experts. Network analysis is used to identify the roles of driving forces in the different scenarios, and the results are discussed in comparison with the main findings from existing scenarios on the future development of the organic sector.     

Do the EU countries import at the same price? The case of coffee

The establishment of the Economic and Monetary Union was expected to determine price convergence in the market of the European Union, leading to the equilibrium theorized by the law of one price. This article investigates prices convergence in the coffee market among European importers. Coffee is not only a tradable and traded good, but also one of the most valuable traded commodities. We account for different qualities of coffee in a hedonic regression model, which isolate and remove the effects of factors that might affect price dispersion. Adjusted import prices result to be significantly different between European Member States, and do not support the hypothesis of a deepening European market integration.     

Structural VAR and financial networks: A minimum distance approach to spatial modeling

In this paper, I interpret a time series spatial model (T-SAR) as a constrained structural vector autoregressive (SVAR) model. Based on these restrictions, I propose a minimum distance approach to estimate the (row-standardized) network matrix and the overall network influence parameter of the T-SAR from the SVAR estimates. I also develop a Wald-type test to assess the distance between these two models. To implement the methodology, I discuss machine learning methods as one possible identification strategy of SVAR models. Finally, I illustrate the methodology through an application to volatility spillovers across major stock markets using daily realized volatility data for 2004–2018.     

Fiscal Shocks and the Current Account in the Redux Model: Evidence from the Italian Economy

The main goal of this paper is to study the effects of fiscal policy on the current account in the Italian economy through the analysis of one of the most innovative intertemporal models of recent years, the Obstfeld–Rogoff Redux model. The author proposes an innovative econometric approach to the model, based on the estimation of the microeconomic parameters that appear in its fundamental equations. The estimated parameters are used to empirically determine the multipliers that, according to the theory, connect permanent and temporary variations in public expenditure to the current account. Estimation is carried out on a dynamic extension of the original model, which has been developed modifying the first order conditions system of the maximization problem. Finally, the author provides a comparison between the results obtained and the actual dynamics of the Italian current account balance.     

What Contributes to Life Satisfaction in Transitional Romania?

This paper analyzes life satisfaction in Romania in 2001, 12 years after the collapse of communism and the beginning of the transition into a market economy. Using a survey of 1770 individuals, we find that our results are very similar to studies in Western Europe and the USA. Life satisfaction increases with housing standard, health status, economic situation, education, trusting other people, and living in the countryside, and decreases with rising unemployment. However, life satisfaction is lower than in Western countries with about 74% of the people in the sample being not at all satisfied or not quite satisfied with their life in general, and the remaining part being quite satisfied or very satisfied. A policy discussion concludes the paper.     

Endogenous Growth in an Open Economy and the Real Exchange Rate

This paper is a step in the direction of a larger research project aimed at determining the long run equilibrium value of the euro/dollar real exchange rate. Given this value, one could then give a precise meaning to the notion of undervaluation or overvaluation of the euro, and calculate its misalignment. The problem however arises of how to assess the reliability of such misalignment calculations. In our opinion, we must have a benchmark (namely a period in which we exactly know from outside sources the misalignment itself), against which we can test the validity of the model underlying our calculations. This of course is not (yet) possible for the euro, so that all the calculations of the misalignment of the euro that have been made can only be compared with one another, without knowing which is the good one. Hence, before building a model to be applied to the euro/dollar, we tested our ideas incorporating them in a basic model to be applied to the lira/dollar in a period in which we do know the actual misalignment of the lira from outside sources.     

Testing assumptions underlying economic research on transgenic food crops for Third World farmers: Evidence from Cuba, Guatemala and Mexico

Transgenic crop varieties (TGVs) are being promoted as essential for improving small-scale Third World (SSTW) agriculture. Most economic research on this topic makes critical, untested assumptions, including that farmers will choose TGVs over other varieties because TGVs are economically optimal and because farmers are risk neutral profit maximizers. We tested these assumptions using data from a survey of 334 farmers in 6 communities in Cuba, Guatemala and Mexico in which farmers ranked 4 real and hypothetical maize varieties for eating and sowing. Our results did not support these assumptions. Most farmers preferred farmer varieties for sowing and especially for eating, avoiding TGVs, a preference associated with being risk averse and with non-monetary preferences. Farmers more integrated into modern agriculture were more likely to choose TGVs. These results suggest that farmers most in need of support and most important for conserving genetic diversity are least favorable toward TGVs, and that alternative ways of improving SSTW agriculture should receive more attention.     

Seven Ways to Deal with a Financial Crisis: Cross‐Country Experience and Policy Implications1

This article presents a taxonomy of financial restructuring strategies that have been used by national policy makers to manage financial crises in the past. The goals of financial restructuring are to preserve or, if necessary, restore the debtor‐creditor relationships on which the economy depends for efficient allocation of capital, and to do so at minimal cost. Costs include not only the direct costs to taxpayers of financial assistance, but also—and likely more important—the indirect costs to the economy that stem from misallocations of capital and incentive problems resulting from the restructuring. Countries typically apply a combination of tools, including decentralized, market‐based mechanisms as well as government‐managed programs. Market‐based strategies generally aim to strengthen the capital base of financial institutions and borrowers using some mix of debt forgiveness and capital infusions. Government‐led restructuring strategies include the establishment of entities to which non‐performing loans are transferred as well as government‐assisted sales of domestic financial institutions, often to foreign entrants. Market‐based mechanisms can provide low‐cost ways of resolving the coordination problems faced by countries in the wake of massive debtor and creditor insolvency, particularly when those mechanisms are effective in achieving the desirable objective of selectivity—that is, devoting taxpayer resources only to those borrowers and banks that, with temporary assistance, will be capable of sustaining themselves in the future. But limiting their range of application mainly to developed economies, such market‐based mechanisms also depend on an efficient judicial system, a credible supervisory framework and authority with sufficient enforcement capacity, and lack of corruption in implementation. Although government‐managed programs may not seem to depend as heavily on well‐functioning legal and regulatory institutions, such approaches—especially the transfer of assets to government‐owned asset management companies—also rely to some extent on such institutions. Asset management companies are less likely to achieve their goal of resolving the overhang of debt at reasonable cost when legal and political institutions are weak and ownership of domestic creditors and debtors is highly concentrated. Especially in such cases, complexity and failure to consider incentive problems when designing specific rules governing financial assistance can aggravate moral hazard problems, unnecessarily raising the costs of resolution. Resolution mechanisms tend to be most successful when—like across‐the‐board debt forgiveness programs implemented through redenominations of debt—they are simple in design and afford quick resolution of outstanding debts, offering little discretion to governments while providing incentives for the private sector to work down the remaining debt overhang.     

Translating sustainable and smart city strategies into performance measurement systems

This paper shows how sustainable and smart strategies can be implemented in cities and how these strategies influence, and are influenced by, performance measurement systems. Drawing upon the Foucauldian notion of governmentality, the authors present the case of Gothenburg in Sweden, where they interviewed the key actors involved in a new sustainability strategy. Translating strategy into performance measurement systems requires collaboration across organizational boundaries and considerations of financial goals and social and human aspects.