The Impact of Two-Tier Producer and Consumer Food Pricing in India

India's government buys wheat, rice, and sugar at below themarket price and then sells it in ration shops in the urbanand rural areas. The rest is sold in the open market. This createsa two-tier price system for consumers and producers. Supportersof the government's procurement policy claim that it raisesthe open-market price so much that it increases the sales-weightedaverage of the rationed price and the open-market price; inthat case, both the farm sector as a whole and low-income urbanconsumers with access to the ration shops gain, and high-incomeurban consumers who buy at the open-market price lose. Thisview has provided an intellectual basis for the policy. This article examines a variety of cases: with and without rationing;with rationing through ration cards or queuing; with and withoutaccess by the urban rich to the ration shops; with or withoutfree trade; and with a marketable surplus having either positive,negative, or zero price elasticity. The impact of the policyon the average price is in general ambiguous or negative. Underthe most plausible assumptions, it is negative, implying thatfarmers as a whole lose from the procurement policy.     

Savings and Loan Demand for Liquid Assets: Theory,Evidence and Implications for Policy*

In this study a model of liquid asset management for individual savings and loan associations is developed. The model combines features of portfolio theory and inventory theory and is used to draw hypotheses on the relationship between the demand for excess liquidity and a variety of independent variables. Pooled cross section-time series equations are estimated for the demand for excess liquidity of 198 S & Ls over the period 1974–1978. In addition to conclusions on the role of individual variables, the estimated equations reveal that the FHLBB can affect the portfolios of some, but not all, S & Ls. This implies that FHLBB liquidity policy can have an effect on the mortgage market.     

Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies

The impact of sector-specific (direct) and economywide (indirect)policies on agricultural incentives for eighteen developingcountries for the period 1975–84 are estimated. The directeffect is measured by the proportional difference between theproducer price and the border price (adjusting for distribution,storage, transport, and other marketing costs). The indirecteffect has two components. The first is the impact of the unsustainableportion of the current account deficit and of industrial protectionpolicies on the real exchange rate and thus on the price ofagricultural commodities relative to nonagricultural nontradables.The second is the impact of industrial protection policies onthe relative price of agricultural commodities to that of nonagriculturaltradable goods. We find that (1) in almost all cases the directeffect is equivalent to a tax on exportable goods (–11percent on average) and to a subsidy for importables (20 percenton average); (2) the indirect effect also taxes agriculture(–27 percent on average) and dominates the direct effect(whether the direct effect is positive or negative); and (3)the direct policies for both importables and exportables stabilizedomestic producer prices.     

The capitalization of income streams and the effects of open-market policy under fixed exchange rates

This paper investigates the long- and short-run neutrality of open-market monetary policy in a world of fixed exchange rates and imperfect substitutability between bonds denominated in different currencies. Using an illustrative portfolio-balance model, it shows that when the public discounts the future tax liabilities associated with the national debt and the central bank supports the exchange rate by trading non-interest-bearing foreign assets, open-market policy has a short-run effect, but no long-run effect, on the domestic price level and interest rate. When the foreign-exchange intervention assets earn interest that is rebated to and capitalized by the public, open-market policy loses even its short-run efficacy — the capital-account offset to monetary policy is complete.     

Management and Accounting Developments in Executive Agencies

The executive agency programme has moved ahead rapidly since its introduction in 1988 and by 1996 over 70% of all civil servants were working under executive agency conditions. This has resulted in a major change in the structure of the civil service and in the management of the activities of central government. The question that then emerges concerns the benefits, if any, that these changes have brought about. This paper reports the results of a survey of a sample of senior managers in executive agencies. The survey attempted to ascertain the extent to which agencification was felt to have led to increases in autonomy and freedom to manage and also to obtain the views of managers on a range of issues including changes in operational effectiveness and quality of service delivery. These, after all, are some of the key measures of the success or otherwise of the agencification programme. The survey also examined changes in specific management accounting practices and a broad overview of the findings is provided in the paper. In general, it seems that the senior managers of executive agencies do feel that agencification has achieved many of the benefits hoped for and that is has brought about changes and improvements in management and management accounting practices.     

Personality and Saving Behavior Among Older Adults

This study investigates how psychological characteristics influence saving behavior within a sample of 1,380 U.S. preretirees aged 50–70 from the Health and Retirement Study (HRS). Using the 3M Model of Motivation and Personality as a theoretical basis, structural equation model results revealed that financial self‐efficacy (FSE) directly explains saving behavior and is central to understanding the link between other psychological characteristics and the saving behavior of older adults. Through higher FSE, increased positive affect and reduced negative affect indirectly supported saving behavior. Moreover, the results revealed personality traits indirectly explained saving behavior. Conscientiousness and extroversion indirectly supported saving behavior; whereas openness to experience and neuroticism indirectly undermined saving behavior. This study connects broad personality traits with saving behavior, which provides information about how older adults' psychological composition is related to their saving practices.