US—Mexico fresh vegetable trade: the effects of trade liberalization and economic growth

Studies of US‐Mexico vegetable trade have generally emphasized the importance of US tariffs in determining the competitive advantage of US producers. Even so, research has identified at least four factors related primarily to the different levels of economic development in the US and Mexico that also have important effects on US‐Mexico agricultural trade in general and fresh vegetable trade in particular. These include the differential growth rates of US and Mexican real wages, production technology (yields), and per capita income as well as cyclical movements in the real Mexican Peso/US Dollar exchange rate. This study examines the relative contribution of NAFTA and the development‐related factors to likely future changes in US fresh vegetable imports from Mexico. The analysis employs an econometric simulation model of US and Mexican markets for five fresh vegetables (tomatoes, cucumbers, squash, bell peppers, and onions) accounting for 80% of US fresh vegetable imports. The results suggest that the 1994–1995 Peso devaluation rather than NAFTA was primarily responsible for the sharp increase in US imports of Mexican vegetables observed in the first years following the implementation of NAFTA. Over time, however, the results suggest that differences in the growth rates of US and Mexican production yields and, to a lesser extent, of US and Mexican real incomes and/or real wage rates could plausibly contribute more to the future growth of US tomato, squash, and onion imports from Mexico than the trade liberalizing effects of NAFTA.     

Factors helping the HR function gain greater acceptance for its proposals and innovations: evidence from Spain†

On the basis of the sense-making and sense-giving literature, this study addresses factors helping the HR function gain greater acceptance by employees for its proposals and innovations. Using an original sample of 298 employees from nine firms in Spain, we find that HR department credibility is only one of the factors that influence employees' acceptance. Other essential elements are top management and supervisor support. We also investigate the consequences that differential levels of support from supervisors and top managers can have for the acceptance of HR innovations, and we find that supervisor support carries more weight than that of top managers. Finally, we explore variations in the importance of the HR function credibility as an acceptance enabler under different organizational innovation climates. The results suggest that HR credibility plays an essential role independently of climate.     

Voluntary Export Restraints and Resource Allocation in Exporting Countries

This article analyzes the resource implications of voluntaryexport restraints (VERs) for exporting countries. A simple analyticalmethod is used to demonstrate that, by reducing the marginalrevenue of its factors of production, a VER causes an industryin the exporting country to contract, and that the efficiencylosses from a VER depend on the ease with which sales can bediverted from the restricted toward the unrestricted markets.The method is applied to test the effects of the U.S. OrderlyMarketing Agreement (OMA) for producers of leather footwearin the Republic of Korea during the period 1977–81. Weestimate that the marginal revenue product of factors employedin leather footwear declined by as much as 9 percent becauseof the OMA, an estimate that is corroborated by inspection oftime series on output, employment, and wages of the Korean footwearsector. This implies that there was pressure on the Korean footwearindustry to contract as a result of the OMA.     

Market Integration in the Golden Periphery. The Lisbon/London Exchange, 1854–1891

Portugal was the first independent nation to follow Britain in joining the gold standard. Although beset by persistent current account deficits and heavily dependent on foreign capital inflows, it enjoyed a relatively stable tenure of 37 years on gold. This paper shows how it was possible to secure currency stability, despite a lower credibility for the peg and a higher incidence of gold point violations than in core countries. The explanation lies in the central role played by institutional actors, such as the Bank of Portugal and/or the government, whose interventions in the exchange market kept the parity within the band.     

The Federal Reserve’s balance sheet and overnight interest rates: Empirical modeling of exit strategies

This paper provides a comprehensive study of the interplay between the Federal Reserve’s balance sheet and overnight interest rates. We model both the supply of and the demand for excess reserves. Treating outright securities holdings of the Federal Reserve as a policy tool, we estimate the effects of unconventional monetary policy on overnight funding rates. Further, we offer the first empirical assessment of the FOMC’s principles of the exit strategy. Assuming a path for removing monetary policy accommodation that is consistent with the FOMC’s exit principles, we project that the federal funds rate increases to 70 basis points by 2016, settling in a corridor bracketed by the discount rate and the interest rate on excess reserves, as excess reserves of depository institutions decline to near zero.     

THE DISTANCE PUZZLE AND LOW‐INCOME COUNTRIES: AN UPDATE

The ‘distance effect' measuring the elasticity of trade flows to distance has been found to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the ‘distance puzzle'. However, this puzzle is regularly challenged by new developments in the specification of the gravity equation or in its estimations. We propose an original survey on the existing methods used to quantify the distance puzzle – basically the computation of an average distance of trade, a meta‐analysis on existing gravity papers and the implementation of recent econometric developments, all on a well‐specified gravity equation both in cross‐section and panel data. We apply all these methods to a unique large database (124 countries from 1970 to 2006). It appears that if all these new developments can change the amplitude of the increase in the trade elasticity to distance, none solve the distance puzzle. We confirm the existence of this puzzle and identify that it only applies to low‐income countries which exhibit a significant rising distance effect on their trade of around 18% between 1970 and 2006 while the distance ‘puzzle' for trade within richer countries disappears.     

Polymyxin B and colistin—the economic burden of nephrotoxicity against multidrug resistant bacteria

Background: Polymyxin B and colistin are nephrotoxic drugs used in the treatment of carbapenem-resistant Enterobacteriaceae. The aim of this study is to evaluate the burden of costs due to polymyxin associated AKI and propose a simulated break-even price for new therapies.

Methods: The pharmacoeconomic model is based on two large cross-sectional studies of polymyxin nephrotoxicity. Total direct costs in patients with and without renal failure were compared. The direct cost of each hemodialysis section (USD82.94) and daily hospital charges (USD934.85) were based on the values used in a major public hospital in the city where the clinical study was performed. The break-even price of new drugs was simulated considering eventual new drugs as effective as polymyxins, but less nephrotoxic in different percentages. Outcomes of patients after hospital discharge were not evaluated.

Results: Total direct cost of the group of patients who survived without AKI was significantly lower than total direct cost of the groups either with AKI or the group who died without AKI. There was a tendency of even higher costs in those who died with AKI and dialysis. Direct cost of hemodialysis was not as important as the longer hospitalization after sepsis. Considering daily cost of polymyxin is USD60, drugs with 50% less AKI could be considered cost-beneficial if the daily cost is lower than USD160.

Conclusions: AKI in patients with carbapenem-resistant Enterobacteriaceae treated with polymyxin increases both length of stay in hospital and total costs.     

Competition and Cooperation in Divisible Good Auctions: An Experimental Examination

An experimental approach is used to examine the performanceof three different multiunit auction designs: discriminatory,uniform-price with fixed supply, and uniform-price with endogenoussupply. We find the actual strategies to be inconsistent withtheoretically identified equilibrium strategies. The discriminatoryauction is found to be more susceptible to collusion than eitheruniform-price auction and so, contrary to theoretical predictionsand previous experimental results, it generates the lowest averagerevenue. Consistent with theoretical predictions, the actualbid schedules are more elastic with reducible supply or discriminatorypricing than in the uniform-price auction with fixed supply.     

Weathering the Storm: The Impact of the East Asian Crisis on Farm Households in Indonesia and Thailand

This article assesses the impact of the East Asian financialcrisis on farm households in two of the region's most affectedcountries. Indonesia and Thailand, using detailed household-levelsurvey data collected before and after the crisis began. Althoughthe nature of the shocks in the two countries were similar,the impact on farmers' income (particularly on distribution)was quite different. In Thailand, poor farmers bore the bruntof the crisis, in part because of their greater reliance onthe urban economy, than did poor farmers in Indonesia. Urban-rurallinks are much weaker in Indonesia. Farmers in both countries,particularly those specializing in export crops, benefited fromthe currency devaluation. Although there is some evidence thatthe productivity of the smallest landholders declined over theperiod in question, it is difficult to attribute this directlyto the financial crisis. At least in Thailand, a rural creditcrunch does not seem to have materialized.      

Housing and Mortgage Market Policies in Chile

This study provides a survey of the housing and mortgage market policies applied between 1976 and 1994 in Chile. These policies are implemented within the framework of a free-market economy in which the state plays a subsidiary role in the economic affairs of the nation. Of particular importance to the housing sector have been the elimination of interest rate and rent controls, the elimination of a specialized housing finance system, and the consistent application of an indexation scheme that preserves the real value of monetary contracts and that allows investors the recovery of their funds with a competitive real return.