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.     

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?     

Does Fair Value Accounting Contribute to Systemic Risk in the Banking Industry?

I investigate whether fair value accounting can contribute to the banking industry's systemic risk. I focus on the adoption of Statement of Financial Accounting Standard No. 115 (SFAS No. 115), which required available‐for‐sale (AFS) securities to be recognized at fair value with unrealized gains and losses included in equity through accumulated other comprehensive income. SFAS No. 115 increased banks' regulatory risk because, at the time, calculation of regulatory capital closely conformed with GAAP equity. I find that systemic risk increased following the adoption of SFAS No. 115. Furthermore, following a subsequent regulatory amendment—which excluded unrealized gains and losses on AFS securities from regulatory capital but did not change their GAAP treatment—systemic risk decreased. Taken together, the evidence suggests that fair value accounting has the potential to increase systemic risk through the explicit inclusion of volatile fair value estimates in regulatory bank capital adequacy assessments. I do not, however, find evidence of fair value accounting impacting systemic risk in its information role; that is, by providing information to a bank's external stakeholders about its financial position and performance. I also show that higher fair value volatility of investment securities, lower bank capital, and larger AFS security holdings increase banks' marginal contribution to systemic risk. My findings should interest regulators and policymakers, as recent regulatory changes in light of Basel III recommendations require unrealized gains and losses on AFS securities to be included in regulatory capital for advanced approaches banks.     

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.     

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.     

A quantitative reassessment of the finance–growth nexus: evidence from a multivariate VAR

The long-run relationship between financial development and economic growth is examined in a multivariate vector autoregression (VAR) framework using 10 sample countries. Difficulties surrounding the cross-country regressions and bivariate time series studies are outlined. The long-run financial development and output relationships are identified in a cointegrating framework through tests of over-identifying restrictions. We find bi-directional causality between financial development and economic growth in all the sample countries, conclusions that stand distinct from those in the existing empirical literature. We attribute our findings to: (i) analysis of a higher dimensional system, (ii) a new method of identifying the long-run economic relationships, and (iii) a new approach to long-run causality testing.     

Inverse moments of order statistics from Weibull distribution

Abstract

A general expression for moments of order statistics of positive and negative orders from Weibull distribution has been obtained and the result has been utilized to establish two identities.     

Cointegration, causality and the transmission of shocks across wheat market in Pakistan

This paper uses quarterly price data and examines the transmission of shocks across different spatially separated locations besides identifying causality among these locations. Johansen and Juselius’s (Econ. Stat., 52, 160–210, 1990) multivariate cointegration procedure identified two cointegrating vectors among these locations. Following Toda and Yamamoto (J. Econom., 66, 225–250, 1995), causality tests showed only one bi-directional causality and it was between Peshawar and Hyderabad locations. Faisalabad and Sargodha appeared independent (i.e. exogenous) market locations in price discovery process. Peshawar market showed maximum (i.e. 5) number of significant links. The generalized impulse response functions, though, suggested similar (cyclical) pattern of responses across the markets, but their time profile, which provides insight into the system’s speed of convergence to long run equilibrium path, varied with different level of extent and persistency. Responses to shock originating in consumption markets (i.e. Karachi, Peshawar and Lahore) remained short lived; whereas the shocks stemming from surplus wheat producing locations (i.e Multan, Sargodha and Faisalabad) produced long and more persistent responses.