Oppressive pasts and desired futures: Re-imagining India

Univocal notions of sovereign nationality have reached a dead-end in the Indian subcontinent. The fixation of state elites in preserving national security and the territorial integrity of their countries has unleased a spiral of state and societal violence that is unparallelled even in the subcontinent. This fixation with such exclusivist notions of nationality and sovereignty has its origins in a particular rendering of past Indian history. This interpretation of the past has also locked the dominant vision of the future in directions that can only compound the violence. Re-imagining the future thus involves re-creating the past in more enabling ways. Perhaps the time has come to traverse paths not taken and explore alternatives that were sidelined in the tumultous times of partition and independence in 1947.     

Estimating multiproduct and product‐specific scale economies for agricultural cooperatives

This article estimates multiproduct and product‐specific scale economies, scope economies, and cost efficiency with single and annual cost frontiers using a nonparametric approach. Multiproduct scale and scope economies are found that suggests increasing scale and product diversification can reduce cost for agricultural cooperatives. Many agricultural cooperatives experience economies of scale indicating that variable returns to scale as opposed to constant returns to scale is the appropriate technology for modeling agricultural cooperatives. Product‐specific scale economies for all outputs are close to one indicating that individual outputs are operating close to constant returns to scale. Annual frontier estimates show that cooperatives have become less cost efficient over time, but scale and scope economies remain relatively consistent across years. Further, results show that economic measures obtained from the single frontier are statistically different from those measures calculated from annual frontiers, suggesting that the cost frontier has shifted over time. The trade‐off between cost efficiency and multiproduct scale economies indicates that smaller cooperatives can reduce a higher percentage of cost by increasing the scale of operations rather than just becoming cost efficient. Because larger incentives exist for small cooperatives to increase scale, mergers will likely continue until economies of scale are exhausted in the industry.     

Conditional Policies in General Equilibrium

Obtaining lower generalized system of preferences (GSP) tariffs requires meeting costly Rules of Origin (ROOs). Growing coffee in the shade is more costly, but yields a price premium. This paper analyzes the effects of such restrictions in a general equilibrium setting and shows that such policies may have unanticipated effects. It is shown that in a world with capital mobility, the GSP could result in capital outflows rather than inflows and consumer preferences for shade grown coffee end up hurting labor in developing countries. Even small subsidies that are contingent on the use of domestic intermediates can result in specialization in the targeted good. Value added contingent policies can easily lead to multiple equilibria despite the absence of externalities or market imperfections.     

Consumption inequality in Canada, 1997 to 2009

We assess the evolution of consumption inequality in Canada over the years 1997 to 2009. We correct the imputation of shelter consumption for homeowners to allow for unobserved differences in housing quality correlated with selection into rental tenure, and we account for measurement error in this imputation. Using the annual Survey of Household Spending for years 1997 to 2009, we find that household‐level consumption inequality measured by the Gini coefficient increased from 0.251 to 0.275 over 1997 to 2006. Between 2006 and 2007, consumption inequality may have decreased, and over 2007 to 2009, consumption inequality was flat. Over the entire period of 1997 to 2009, consumption inequality increased moderately. The Gini coefficient for individual‐level consumption inequality followed a similar pattern, though the changes were smaller in magnitude. We also explore a possible correction for tail non‐response bias in inequality measurement and find that the increase in measured consumption inequality is robust to this correction.     

An Empirical Test of Environmental Kuznets Curve for Water Pollution

The Environmental Kuznets Curve (EKC) on water pollution was investigated with both semiparametric and parametric models using watershed level data for the state of Louisiana, USA. The parametric model indicated the turning points within the range $10241–$12993, $6636–$13877, and $6467–$12758 for nitrogen (N), phosphorus (P), and dissolved oxygen (DO), respectively. However, only the parameters associated with N EKC were found to be significant. Model specification tests rejected parametric models in favor of semiparametric specification for P but not for N and DO.     

Lumpy consumer durables, market power, and endogenous business cycles

Abstract.  In this paper we show that lumpy consumer durables and market power can generate endogenous cycles consistent with the facts. Past sales determine the current market size of durable goods. Larger past sales, ceteris paribus, thus naturally result in a smaller current market size and income. In this manner, the seeds of a downturn are sown in an upturn. JEL Classification: E32, E13     

Union bargaining power, employment, and output in a model of monopolistic competition with wage bargaining

This paper examines the implications of a rise in the bargaining power of workers on the real wage, income distribution, and the levels of employment and output using a macroeconomic model with monopolistic competition and worker-owner Nash bargaining at the firm level. It thereby provides optimizing microfoundations to Kalecki's macroeconomic analysis of the positive effect on output of a rise in trade-union power, and contrasts it with the neoclassical view based on the diminishing marginal productivity of labor.     

The art of conversation: eliciting information from experts through multi-stage communication

We examine the strategic interaction between an informed expert and an uninformed decision maker, extending the analysis of Crawford and Sobel (Econometrica 50 (1982) 1431). We modify their model to allow for more extensive communication between the two parties and show that face-to-face communication between the expert and the uninformed decision maker followed by a written report from the expert leads to improved information transmission. In (almost) all cases, there exists an equilibrium in our modified model that ex ante Pareto dominates all of the equilibria identified by Crawford and Sobel. This remains true even if the expert's bias is so great that in their model no information would be disclosed.