State Spending: What to Cut, Where, and Why

The growth of government has abscured the erstwhile clarity of its tasks Geoffrey Wook, of City University Business School, considers cuts in state spending that would clarify the function of government, reduce its burden on the taxpayer, and re-establish its central and limited purpose.     

African Intellectuals and the Neglect of Economic Reality

Much analysis of African political economy ignores the long tradition of markets in Africa and misrepresents important aspects of her history. Professor George Ayittey. the Ghanaian economist currently working at the University of Bloomsburg in Pennsylvania, takes issue with a recent book and television series.     

Forward Hedging the Exchange Risks of U.S. Equity Investments in the U.K., Germany and France

This paper simulates forward hedging of foreign exchange risks for U.S. investments in U.K., German and French equities. Rolling OLS and SUR regressions are used to obtain monthly exposure coefficients (hedge ratios), and the micro-market mechanics of the exchange rate bid-ask spread are considered throughout. While the coefficient of variation favors not hedging, no statistically significant differences are found between no hedge and hedge strategies. However, hedging produces a nontrivial incidence of cases where liquidated foreign equity values are less than amounts sold forward. The results, robust to rising and falling dollar sub-periods, do not support forward hedging.     

Reliability criteria bolster product classification decisions: A reply to Jones

We empirically test the robustness of the Easingwood approach to classify early product life cycle forms for infrequently purchased major products. Our results indicate that the key classification parameters could be unstable to variations in the sample size used for estimation, thereby producing more than one classification for several products. We demonstrate that the problem of multiple classifications can be effectively addressed by using the more rigorous criteria of joint confidence regions (as opposed to point estimates) of classification parameters. The benefit of such rigorous classification is that it increases researcher confidence in Easingwood's classification system.     

Von Thünen's model of the dual economy

We are indebted to Heinz König, John Mellor, and Hans van Beek, and to three anonymous referees of the journal for helpful comments, and to Victoria Dalko for her able research assistance. Financial assistance from the Foerder Institute for Economic Research and the International Food Policy Research Institute is gratefully acknowledged. A version of the paper also appears as Working Paper No. 989 of the Foerder Institute and Discussion Paper No. A 269 of the University of Bonn.