Predictors for the first-order autoregressive process

The error made in predicting a first-order autoregressive process with unknown parameters is investigated. It is shown that the least squares predictor is unbiased for symmetric error distributions. Alternative predictors for stationary and non-stationary processes are studied using the Monte Carlo method. The ordinary least squares statistics perform reasonably well for one period predictions with samples as small as ten for both stationary and non-stationary processes. It is demonstrated that there is a considerable loss in efficiency when outdated estimators are used to construct predictors.     

The use of indicator variables in computing predictions

The use of indicator variables to construct predictions and to estimate the variances of prediction errors is illustrated for systems of equations, nonlinear regressions and autoregressions.     

An Ampirical Assessment of the Contribution of Small Business Employment to U.S. State Economic Performance

Small Business Economics - Small business proponents regularly couple their arguments for favorable government policies and reduced tax and regulatory burdens, to the presumed benefits of increased...     

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.     

Getting Rich and Eating Out: Consumption of Food Away from Home in Urban China

The overall goal of this study is to better understand food‐away‐from‐home (FAFH) consumption in urban China. We use national statistical sources and our own data to examine the trends in FAFH during the late reform period and to analyze the determinants of FAFH demand, examining how different groups of consumers have participated in this new area of consumption. Besides the normal Tobit model for total food expenditure away from home, a system of multivariate Tobit equations was estimated simultaneously for three categories of foods consumed outside of the home. The results show that the rapid increase of FAFH demand, a rise that is fueled by higher incomes, is changing consumption patterns in China's post‐reform urban economy. We also use our findings to illustrate how omission of accounting for FAFH trends by China's official statisticians has affected the reported trends in national meat supply and demand statistics. La présente étude visait à mieux comprendre le phénomène de la consommation de repas à l'extérieur en Chine urbaine. Nous avons utilisé des données de sources nationales et nos propres données pour étudier le phénomène au cours de la dernière réforme et pour analyser les déterminants de la demande de repas à l'extérieur en examinant la participation de divers groupes de consommateurs à ce nouveau créneau. Outre le modèle Tobit simple pour évaluer les dépenses totales de repas à l'extérieur, nous avons estimé simultanément un système d'équations Tobit à plusieurs variables pour trois catégories d'aliments consommés à l'extérieur du foyer. Les résultats ont montré que la croissance rapide de la demande de repas à l'extérieur, alimentée par une hausse des revenus, est en train de modifier les habitudes de consommation dans l'économie urbaine de la Chine post‐réformiste. Nous avons également utilisé nos résultats pour illustrer de quelle façon le fait que les statisticiens officiels de la Chine ne tiennent pas compte des tendances de consommation de repas à l'extérieur a une influence sur l'évaluation des tendances dans les données nationales de l'offre et de la demande de viande.     

Assessing the returns to R&D on perennial crops: the costs and benefits of Pierce's disease research in the California winegrape industry

Several complicating issues arise in evaluating the returns to research into varietal improvements for perennial crops compared with annual crops. We elucidate and address these issues in the context of a case study of research aiming to develop varieties that are resistant to Pierce's disease (PD) of grapevines. PD imposes costs of over $100 million per year on the California grape industry, even with public PD control programs in place. Research projects to develop PD resistant varieties of grapevines are at various stages of completion. We describe the economic problems posed by PD, document the research programs undertaken to address the disease and present an economic assessment of the returns to the investment, which are conditional on other policies. Using a simulation model of the market for California winegrapes, we estimate the benefits from research, development and adoption of PD‐resistant vines as ranging from $4 million to $129 million annually over a 50‐year horizon, depending on the length of the R&D lag and the rate of adoption. In addition to these specific quantitative results the paper offers insight into the broader question of economic evaluation of damage‐mitigation technology for perennial crops.     

The Mind of the Social Individual: A Comment on Sherman and Hodgson

In the Spring 1998 (56(1): 47-57) and Fall 1998 (56(3): 295-306, 307-310) issues of this review, Howard Sherman and Geoffrey Hodgson debated, inter alia , the extent to which Veblen-Ayres institutionalism is compatible with Marx and recent Marxist work. This paper argues that the differences between Hodgson and Sherman"s positions do not rely on assumptions of "illogical" behavior, individualist arguments or structural conceptions of the individual. Instead, the debate turns on the authors' respective conceptions of the formation and role of the human mind in what it is to be a social individual.     

CONSIDERATION OF WEATHER RISK IN FORAGE MACHINERY SELECTION

This paper concerns a procedure jor measuring the major economic risks and returns involved in forage production. Conventional static production economics was modified to permit the use of decision criteria under conditions of weather risk. Twenty-six years of rainfall data were analyzed to determine the expected mean number of days available for fieldwork ivithin each of three specified seasons. These seasons correspond with three critical forage production periods: e.g., (1) land preparation and planting, (2) hay harvest, and (3) corn silage harvest and fall plouiing. A probability distribution of days available for field operations was derived, and the number of days available in any one year was randomly selected from this distribution. Given the acreage involved and the machinery system, the days required to perform nine specified field operations were calculated. If the number of days required within a specified season exceeded the number of days available, the value of the crops produced was reduced by a set of yield reducing functions for each deficient day. Overhead and use-associated machinery costs uiere calculated, and net returns over machinery costs were determined for five machinery systems at 75,150, 225, and 300 acres. Cette publication montre une façon de mesurer les plus grands risques économiques et les profits provenant de la production fourragére. On a modifyé?économie de production conventionnelle et statique afin de tenir compte des critéres de décision utilisés sous les conditions de risques climatologiques. Les chutes de pluie ont été analysées sur une période de vingt-six ans afin de determiner la moyenne des jours disponibles au travail des champs, et ce, pour chacune des trois saisons specifiées. Ces saisons correspondent aux trois périodes critiques de la production fourragere: (1) la préparation du sol et le semis, (2) la récolte du foin, et (3) la récolte du maïs à ensiler et les labours ?automne. On a calculé la distribution probable des jours disponibles pour les travaux des champs et, de cette distribution, le nombre des jours disponibles fut choisi au hasard dans une quel-conque année. Selon une superfécie et un systéme dé machinerie determineés, le nombre de jours nécessaires à?exécution de neuf operations differéntes fut calculé. Lorsque le nombre de jour requis pour ?exécution des travaux ?une saison donnee dépasse le nombre de jours disponibles, la valeur des récoltes produites est réduite par une diminution de rende-ment de plusieurs facteurs, une diminution fonction du nombre de jours manquants. Les frais géneraux et les dépenses associées à?utilisation de la machinerie furent calculés. Les profits nets sur les dépenses de machinerie ont été déterminés pour chaque systéme ?equipement avec 75, 150, 225, et 300 âcres.     

A MODIFIED METHOD FOR INFERRING THE EFFECTIVE BID-ASK SPREAD FROM SECURITY RETURNS

This paper presents a modified method for inferring the effective bid-ask spread from security returns in an eMicient market. The Modified Method removes from security returns the systematic effect of market movements and makes use of the equivalence properties of the moving average process and serial covariance function. The Modified Method is tested with the CRSP daily, weekly, and monthly returns data. The results show that the spread estimates are non-negative and sample time-interval independent. The results are compared with those of Roll (1984) and Amihud and Mendelson (1986).     

Exporting Assets: EMU and the Financial Drivers of European Macroeconomic Imbalances

ABSTRACT

European Economic and Monetary Union has fostered an unstable complementarity in European financial markets between the growth models favoured by European savers (in the northern ‘core’ of Germany and other exporting states) and its borrowers (in the debt-fuelled and demand-driven eurozone periphery, including countries like Greece and Ireland). In the 2000s, the result of this development was a sharp decrease in real interest rates across the eurozone periphery, leading to rapid but inflationary growth. This eroded the competitiveness of exporters in the European periphery, making them more reliant on capital inflows to pay for growing current account deficits. Those deficits became problematic after the disruption of eurozone financial markets beginning in 2008. The policy response to the crises has focused on reducing the competitiveness gap between the core and periphery – while overlooking the financial forces that contributed to those competitiveness differentials in the first place. Indeed, it is the fragile and perverse complementarity in eurozone financial markets – more than any external shock or competitiveness differences – that lies at the root of Europe’s ongoing crisis.