Agent‐based Modelling of Climate Adaptation and Mitigation Options in Agriculture

Computer simulation models can provide valuable insights for climate‐related analysis and help streamline policy interventions for improved adaptation and mitigation in agriculture. Computable general equilibrium (CGE) and partial equilibrium (PE) models are currently being expanded to include land‐use change and energy markets so that the effects of various policy measures on agricultural production can be assessed. Agent‐based modelling (ABM) or multi‐agent systems (MAS) have been suggested as a complementary tool for assessing farmer responses to climate change in agriculture and how these are affected by policies. MAS applied to agricultural systems draw on techniques used for Recursive Farm Programming, but include models of all individual farms, their spatial interactions and the natural environment. In this article, we discuss the specific insights MAS provide for developing robust policies and land‐use strategies in response to climate change. We show that MAS are well‐suited for uncertainty analysis and can thereby complement existing simulation approaches to advance the understanding and implementation of effective climate‐related policies in agriculture.     

Ethics of Celebrities and Their Increasing Influence in 21st Century Society

The influence of celebrities in the 21st century extends far beyond the traditional domain of the entertainment sector of society. During the recent Palestinian presidential elections, the Hollywood actor Richard Gere broadcast a televised message to voters in the region and stated, “Hi, I’m Richard Gere, and I’m speaking for the entire world”. Celebrities in the 21st century have expanded from simple product endorsements to global political and international diplomacy. The celebrities industry is undergoing, “mission creep”, or the expansion of an enterprise beyond its original goals (Hyde, 2009). The global internet is one of the major drivers of this phenomenon. The contribution of this paper is to analyse this global phenomenon and the potential implications for business ethics research.     

Assessing the Income Effects of Group Certification for Smallholder Coffee Farmers: Agent‐based Simulation in Uganda

Voluntary sustainability standards, aimed at improving the environmental, social and economic aspects of agricultural production and trade, are becoming increasingly common. The coffee sector is a prime example, where sustainability certification could improve livelihoods for poor smallholders. However, as individual production volumes are low, smallholder farmers need to cooperate in certification as a group, which makes impact assessment more complicated. Previous empirical studies, reporting premia of up to 30%, have neglected the costs associated with group certification. We explore the issue using an agent‐based simulation of coffee producer organisations in Uganda, including the certification‐related costs for farmers. Our results suggest that certification can have a small positive impact on participating households. But the added value of certification is substantially lower than the price premium, because of certification costs. Increasing both the membership of the producer groups and their deliveries of certified coffee are necessary to improve the rewards of certification.     

Obstacles to a global banking system: “Old Europe” versus “New Europe”

“Old Europe” – the developed nations of continental Europe – averages only about 15% foreign bank ownership, whereas “New Europe” – the transition nations of Eastern Europe – averages about 70%. Similar findings hold elsewhere in the world – developed nations tend to have much lower foreign bank ownership shares than developing nations. We examine the causes of the differences within Europe with an eye toward more general conclusions. Our findings suggest that the low foreign bank shares in “Old Europe” – and perhaps developed nations more generally – may primarily result from net comparative disadvantages for foreign banks and relatively high implicit government entry barriers. The high foreign penetration in “New Europe” – and perhaps developing nations more generally – may be due to net comparative advantages for foreign banks and low government entry barriers, particularly in nations that reduced their state bank ownership.     

Bayesian estimation of the output gap for a small open economy: The case of Canada

We introduce a novel approach for estimating output gaps for small open economies. Identification is based on a multivariate trend-cycle decomposition in which transitory exchange rate movements are linked to the output gap and inflation. The model is then applied to Canadian data.     

On the origin of domestic and international terrorism

We analyze the determinants of the origin of domestic and international terrorism in a large panel data set of 159 countries spanning from 1970 to 2007. We show that terror increases with GDP per capita, a higher polity score measuring a more open and competitive political system and experiences of domestic conflict, anarchy and regime transitions. Our evidence thus contradicts the notion that terrorism is rooted in economic deprivation or that strongly autocratic regimes breed more terrorists. Rather we show that weak or failing states are an incubator for terrorism. We also show that the causes of domestic terror and international terror are similar.     

Risk aversion and the earnings of US immigrants and natives

The literature on the earnings of natives and immigrants has heretofore ignored differences in compensating wages for job risks. It is possible that the risk involved in migration may indicate a greater willingness on the part of immigrants to accept riskier jobs than natives. Alternatively, immigrants may attempt to protect their migration investment by choosing occupations with less risk, indicating a higher degree of risk aversion. This paper examines differences in risk aversion between US immigrants and natives, and corresponding differentials in wage premiums for job risk. Our analysis suggests that on average immigrants are exposed to 21% less risk than natives, but receive a 25% higher risk premium. The higher degree of risk aversion of immigrants and their lower exposure to risk, and thus lower earnings, explains 5% of the higher observed earnings of natives. We also find that earlier immigrant cohorts (pre-1970) are employed in riskier jobs than are recent cohorts, but the difference accounts for only a small portion of the observed earnings differential. Finally, we estimate statistical values of life of $3.6 million for US natives and $4.6 million for immigrants, well within the range of previous studies.     

The information content of money in forecasting euro area inflation

This article contributes to the debate on the role of money in monetary policy by analysing the information content of money in forecasting euro-area inflation. We compare the predictive performance within and among various classes of structural and empirical models in a consistent framework using Bayesian and other estimation techniques. We find that money contains relevant information for inflation in some model classes. Money-based New Keynesian Dynamic Stochastic General Equilibrium (DSGE) models and Vector Autoregressions (VARs) incorporating money perform better than their cashless counterparts. But there are also indications that the contribution of money has its limits. The marginal contribution of money to forecasting accuracy is often small, money adds little to dynamic factor models, and it worsens forecasting accuracy of partial equilibrium models. Finally, nonmonetary models dominate monetary models in an all-out horserace.     

Is UK economics teaching changing? Evaluating the new subject benchmark statement

This paper evaluates the recent reform to the curricular governance framework for UK Economics teaching: the revised Subject Benchmark Statement document for Economics (SBSE). The crisis of confidence in economics which was amplified by the global financial crisis presented an opportunity for fundamental change in economics teaching. The paper asks whether the new SBSE represents change. We ask whether the new SBSE is pluralist with regard to economic theory and method; how it treats the economy and its wider socio-political dimension; what are its educational goals and approach; and overall, how much change has it brought? The paper concludes that the new SBSE does not constitute change: it still exhibits limited pluralism, ignores ethics, power and politics and ignores key educational goals.