Marketing cooperative vs. commission agent: The Turkish dilemma on the modern fresh fruit and vegetable market

In Turkey, the Wholesale Markets Law was enacted in 1995 to facilitate small-scale growers’ access to the fresh produce market. Cooperatives and commission agents have thus become the main marketing structures available to small-scale fresh produce growers, to supply supermarkets and comply with their new requirements. In this paper, we question the advantages and disadvantages that confront small farmers with respect to those marketing structures to allow for market matching or quality upgrading. Drawing on ownership and transaction cost arguments, we use an analytical framework to identify and compare the costs of these marketing organizations. Based on data collected through a large number of interviews with stakeholders, we show that commission agents and credit cooperatives tend to be more efficient than traditional cooperatives as regards sales performance and decision costs. However, the lack of apparent competition between commission agents does not allow for sufficient provision of incentives for producers to invest in high-quality production. Consequently, credit cooperatives are the only structure progressively turning to strategies of quality upgrading and supermarket supply. The flipside of such strategies is that they may lead to the marginalization of small-scale farmers.     

Trade policy and quality leadership in transition economies

Trade policy and quality leadership in transition economies are analyzed in a duopoly model of trade and vertical product differentiation. We first show that the incidence of trade liberalization is sensitive to whether firms in transition economies are producers of low or high quality. Second, we find that neither free trade nor the absence of a domestic subsidy are optimal: Both a tariff and a subsidy increase price competition and while the former extracts foreign rents the latter results in quality upgrading. Third, there exists a rationale for a government to commit to a socially optimal policy to induce quality leadership by the domestic firm when cost asymmetries are low. Finally, we establish an equivalence result between the effects of long-run exchange rate changes and those of trade policy on price competition (but not on social welfare).     

Dummy variables and predictive tests for structural change

We propose a dummy variable interpretation and an alternative proof of the predictive Chow test; we further show that it provides useful additional information on structural changes. We apply this approach to the St. Louis equation.     

The Cochrane-Orcutt procedure numerical examples of multiple admissible minima

We present two numerical examples of multiple admissible minima obtained by using the Cochrane-Orcutt iterative technique: a forgotten and somewhat farfetched example, constructed by Hildreth and Lu, and a new example, based on more typical economic data.     

Price and Volatility Transmission across Borders

Over the past forty years, financial markets throughout the world have steadily become more open to foreign investors. With open markets, asset prices are determined globally. A vast literature on portfolio choice and asset pricing has evolved to study the importance of global factors as well as local factors as determinants of portfolio choice and of expected returns on risky assets. There is growing evidence that risk premia are increasingly determined globally. An important outcome of this force of globalization is increased comovement in asset prices across markets. This survey study examines the literature on the dynamics of comovements in asset prices and volatility across markets around the world. The literature began in the 1970s in conjunction with early theoretical developments on international asset pricing models, but it blossomed in the late 1980s and early 1990s with the availability of comprehensive international stock market databases and the development of econometric methodology to model these dynamics.     

How integrated is the world economy?

This paper develops a methodology to measure the degree of economic integration between nations that are members of an integrated area. We show that a fully integrated economic area (IEA) is characterized by three properties regarding the distribution of member shares of total IEA output and total IEA stocks of physical and human capital. We then show that the expected distribution of member shares within a fully IEA is a harmonic series, with the share distribution depending only on the number of IEA members. This property is then used to develop a composite indicator of the degree of economic integration within an IEA that indicates the distance between the theoretical and actual distribution of shares: the closer is the actual distribution to the expected distribution, the greater the degree of integration. We empirically compute our degree of integration for US states, and alternative regional trading agreements (e.g., EU countries, MERCOSUR, Bangkok Agreement, etc.) and a “world” comprising 64 countries.     

Are labels effective against child labor?

In this paper, we investigate the impact of introducing a label certifying the absence of child labor in the export production of the South. When most eligible producers in the South can obtain the label, its impact is considerably reduced by a displacement effect whereby adult workers replace children in the export sector while children replace adults in the domestic sector. The label is then unable to create a price differential in the South between goods produced under the label and those produced without it.When only a small fraction of eligible producers have access to the label, the South exports both labeled and unlabeled goods to the North. In this case, labeled producers generally gain while those without a label generally loose from the introduction of the label. Ex ante welfare may fall in the South if the probability of getting a label when one qualifies is small. The impact on child labor is in general ambiguous.     

Exchange Rate Passthrough to Export Prices: Assessing Cross‐Country Evidence*

A growing empirical literature reports evidence of a decline in exchange rate passthrough to import prices in a number of industrial countries. Our paper complements this literature by examining passthrough from the other side of the transaction; that is, we assess the exchange rate sensitivity of export prices (denominated in the exporter's currency). We find that the prices charged on exports to the United States are more responsive to the exchange rate than are export prices to other destinations, which is consistent with results in the literature that import price passthrough in the US market is relatively low. In addition, the exchange rate sensitivity of export prices over time has been significantly affected by country‐ and region‐specific factors, including the Asian financial crisis (for emerging Asia), deepening integration with the United States (for Canada), and the effects of the 1992 ERM crisis (for the United Kingdom).