Land productivity,farm size and returns to scale in Pakistan agriculture

It is by now a commonly accepted proposition that economic development must involve both growth and equity. That in many countries the subsidization of the owners of large farms is inequitable is also acknowledged. However, the debate on the ‘efficiency’ of large versus small farms continues. If the owners of large farms are not using the crop acreage with greater efficiency than are the small farmers and if there are no economies of scale, then the imposition of ceilings on farm size and land redistribution are clearly the right options to consider.The object of this study is to test two hypotheses. First, there is an inverse relationship between land productivity and farm size. Second, there are no economies of scale in agricultural production. The tests are performed by regression analysis on the farm-level data collected from Pakistan by the author in 1974. The merit of this study is that it deals with a country which, with a few other underdeveloped countries, has been a beneficiary of the ‘Green Revolution’. The available studies on Pakistan agriculture are limited to the aggregate analyses. Interregional micro-level studies are almost non-existent.     

Price stickiness, trend inflation, and output dynamics: a cross‐country analysis

Abstract.  Sticky price models based on menu costs predict that countries with high trend inflation should have (i) smaller impact effects of demand shocks on output and (ii) less persistent output fluctuations, relative to low‐trend inflation countries. These predictions are tested, controlling for changes in trend inflation, using a country‐specific approach. The results do not support the second prediction. That prediction is also not robust to a modified measure of trend inflation that excludes episodes of hyperinflation. These findings suggest that while price stickiness is important for understanding short‐run impact effects, real propagation mechanisms may drive persistence in output fluctuations.     

Optimal Urban Employment Policies: Notes on Calvo and Quibria

We show that Quibria's insightful observation on the efficacy of urban policy in a model with an urban trade union and an urban informal sector holds, but with a revenue-neutral employment tax-subsidy combination levied on the urban employer. We also draw the relevance of the generalized Harris–Todaro model in providing intuition for the validity of this surprising result.     

Optimal Monetary Policy

Optimal monetary policy maximizes the welfare of a representative agent, given frictions in the economic environment. Constructing a model with two sets of frictions—costly price adjustment by imperfectly competitive firms and costly exchange of wealth for goods—we find optimal monetary policy is governed by two familiar principles. First, the average level of the nominal interest rate should be sufficiently low, as suggested by Milton Friedman, that there should be deflation on average. Yet, the Keynesian frictions imply that the optimal nominal interest rate is positive. Second, as various shocks occur to the real and monetary sectors, the price level should be largely stabilized, as suggested by Irving Fisher, albeit around a deflationary trend path. Since expected inflation is roughly constant through time, the nominal interest rate must therefore vary with the Fisherian determinants of the real interest rate. Although the monetary authority has substantial leverage over real activity in our model economy, it chooses real allocations that closely resemble those which would occur if prices were flexible. In our benchmark model, there is some tendency for the monetary authority to smooth nominal and real interest rates.     

SOME ASPECTS OF FOOD CONSUMPTION AND ITS LONG-TERM PERSPECTIVE IN PAKISTAN, 1961-86

This paper attempts to answer three important questions regarding the consumption of food in Pakistan: (2) What are the recent trends of consumption in the rural and urban areas? (2) What is the likely direction and magnitude of food demand during the period 1961-86? (3) Is the growth of production of food commodities going to be sufficient to meet the requirements by 1970 and thereafter?     

Spatial Patterns of Inequality and Poverty in Indonesia

The paper uses data from the 1976 Household Expenditure Survey (Susenas) to examine spatial patterns of poverty and inequality in Indonesia. A number of inequality measures are computed for each province (Gini Ratio. Atkinson Index, Theil Index, L-Index) and provincial rankings according to each index are compared. Provinces are also ranked according to a number of poverty indexes, using a poverty line adjusted for differences in price levels, between provinces. The correlation between selected measures of poverty and inequality is also investigated and some implications for regional development policy discussed.     

Oligopoly in markets with a continuum of traders: An asymptotic interpretation

This paper tries to make relevant for a finite economy the results of Shitovitz on the “pricing-out” of cores of economies with a non-atomles measure space of agents. It is hoped that the comparison of the two sets of results will shed light on the interpretation and modeling of a “large” trader.     

A monetary model of balance of payments: The case of Venezuela

The monetary approach to the balance of payments has gained considerable appeal in the literature and is viewed as being concerned with the long run since it does not analyze the adjustment process of the balance of payments. The model developed in this paper is concerned essentially with the short-run implications of this approach and the model is applied to the case of Venezuela. The results were very encouraging for the monetary approach as the model was able to explain a great part of the fluctuations in the balance of payments of Venezuela during the period of study.     

Taxation,procurement and collective incentives in Chinese agriculture

Contrary to the view held by many, the organization of agriculture in China has been based on a carefully devised system of incentives which rewards efficiency even at the cost of permitting some degree of inequality. This paper looks at the way taxation and procurement policies in China have been designed to provide such incentive to the collective units in Chinese agriculture. The overall result is a rate of ‘marginal tax’ which is much lower than the rate of ‘average tax’ that is levied both directly and implicitly through procurement. Since liberation there has been a steady reduction in the rate of extraction of resources out of agriculture.