How to Balance the Outcomes of the Economic Partnership Agreements for Sub‐Saharan African Economies?

Since 2002, the Sub‐Saharan African countries ( except South Africa which already has a free‐trade agreement with the EU ) have embarked on free‐trade agreement negotiations with the European Union. These arrangements will replace the Cotonou scheme, which requires these countries to eliminate their tariffs on ‘substantially’ all their European imports. Based on a general equilibrium analysis, this study estimates the potential effects of these agreements by considering different levels of reciprocity in the commitments of the Sub‐Saharan African countries. It shows that the ‘standard’ EU proposal, whereby Sub‐Saharan African countries would cut tariffs on 80 per cent of their European imports, would not be enough to balance the outcome of the Economic Partnership Agreements. As a result of the asymmetries between European and African protections and supply‐side capacities, African countries could experience a balance of trade deficit of USD 1.8 billion associated with a 0.1 per cent decrease in GDP. This proposal, which also induces an industrial restructuring to the benefit of the agro‐processing industries, will create a significant fiscal burden. A lesser level of commitment could largely mitigate these unfavourable results; by reciprocating tariff eliminations on only 60 per cent of their European imports, African countries would reduce the trade imbalance and fiscal losses induced by these agreements by 21 and 51 per cent respectively.     

Disequilibrium as the origin,originality, and challenges of Clower's microfoundations of monetary theory

Abstract

Robert W. Clower's article “A Reconsideration of the Microfoundations of Monetary Theory” (1967) deeply influenced the course of modern monetary economics. On the one hand, it questioned Don Patinkin's (1956) project to integrate monetary and Walrasian value theory. On the other hand, it was the fountainhead of the cash-in-advance models à la Robert J. Lucas (1980), one of the most widely used approaches to monetary theory since the 1980s. Despite this influence, Clower's project to integrate monetary and value theory remains an enigma. My paper intends to resolve it. This is a difficult task since Clower never completed the monetary theory outlined in his 1967 article. To overcome this difficulty, I characterise the intellectual context from which Clower's contribution emerged and have recourse to a reconstruction of his project. This reconstruction is based on the analysis of published and unpublished materials, written by Clower before and after the 1967 article. It is argued that Clower sought to elaborate a disequilibrium monetary theory whilst retaining the two pillars of Patinkin's integration, i.e., the introduction of money into utility functions and the real-balance effect. I trace the origins, account for the originality, and discuss the challenges of this project.     

The origins,development, and fate of Clower's “stock-flow” general-equilibrium programme

Before becoming the hallmark of macroeconomics à la Wynne Godley, the “stock-flow” analysis was already developed in microeconomics and general-equilibrium theory. The goal was to study the formation of economic plans and the determination of market prices when individuals were supposed to consume, produce, and hold commodities. I show that since the early 1950s, Robert W. Clower used the “stock-flow” price theory to offer microfoundations to a Keynesian business cycle model. I analyse the origins of this microfoundation programme, trace its development, and discuss its fate.     

Parking enforcement and travel demand management

This article deals with on-street, non-free parking policy. The aim is to show how parking meter violation challenges the travel demand management policy. The literature widely admits that only the increase in the enforcement effort both deters drivers from offending and contribute to moderating car use. Nevertheless, the link between parking non-compliance, enforcement effort and travel demand has never been examined. We show that when parking meter violation behaviour, fine level choice, modal split and travel demand are connected, the fine increase paradoxically supports car use and encourages parking violation in the case of large parking congestion in particular.     

Assessing Technical Efficiency of Québec Dairy Farms

The purpose of this paper is twofold. Our first objective is to measure the level of technical efficiency of Québec dairy farms. Our second objective is to gauge the robustness of our results with respect to the selection of a functional form and of a distribution for the inefficiency index. We estimate efficiency frontiers for Cobb-Douglas (C-D), translogarithmic (TL) and generalized Leontief (GL) production functions with half-normal, truncated normal and exponential distributions. Our results, based on likelihood dominance criterion (LDC) indicate that the GL production technology dominates the other two functional forms, and this ranking is robust to changes in the distribution of the inefficiency index. Efficiency scores and ranks are highly correlated for all the functional forms and distributions. The differences in the mean levels of efficiency are statistically significant across functional forms and distributions, although the magnitude of the difference is minuscule. The very high mean level of efficiency and the low standard deviation confirms that Québec dairy farms are very homogenous in terms of getting the most from their inputs. This is not surprising, given that the sector has been very stable policywise and that it has been difficult for dairy farmers to expand. To augment the comparisons, results obtained from data envelopment analysis (DEA), are added to the analysis. In this case, the correlation coefficients between DEA and parametric specifications are found to be very low.     

Emigration intentions of Roma: evidence from Central and South-East Europe

The Roma constitute the largest, poorest and youngest ethnic minority group in Europe. Over the last few years, they have attracted unprecedented attention with the fear of massive waves of emigrants to Western European countries. Using unique comparative data from 12 Central and South-East European countries, we study the pattern and determinants of Roma emigration intentions. We find that plans to go abroad are more frequent among Roma compared to non-Roma, but the ethnic gap in emigration intentions is not explained by the more disadvantaged characteristics of Roma compared to non-Roma. Among the Roma population, potential emigrants are more educated and wealthier on average. Finally, ethnic discrimination is a very influential factor that explains the intentions to emigrate within the Roma population.     

Sources of Business Cycles in a Low Income Country

We examine the role of global and domestic shocks in driving macroeconomic fluctuations for Ghana. We are able to study the impact of exogenous shocks, including productivity, credit supply and commodity price shocks. We identify the shocks using a combination of sign and recursive restrictions within Bayesian vector autoregressive models. As a benchmark we provide results for South Africa to document the difference between two economies with similar structures but at different stages of development. We find that global shocks play a more dominant role in South Africa than in Ghana. These shocks operate through three channels: trade, credit and commodity prices.     

The signaling role of policy actions

In an economy affected by shocks that are imperfectly known, the monetary instrument takes on a dual stabilizing role: as a policy response that directly influences the economy and as a vehicle for information that reveals the central bank's assessment to firms. Because mark-up shocks cannot be neutralized by monetary policy, providing firms with more information about these shocks exacerbates their reaction and creates a larger distortion. Recognizing the signaling role of its instrument, the central bank distorts its policy response in order to optimally shape firms’ beliefs. While providing firms with more information is always detrimental to the output gap, it has a more subtle effect on price dispersion depending on whether information is provided through the transparency channel or through the signaling channel. Although more transparency is always detrimental to welfare, the information that is conveyed by the monetary instrument improves welfare when firms’ coordination is highly valuable.     

Practical guidelines for the estimation and inference of a dynamic logistic model with fixed-effects

This paper shows how to simply compute one of the estimators proposed by Honoré and Kyriazidou (2000), as well as its variance, through a reshaping of the original dataset that is then used in a weighted logistic regression with clustering.