North South Trade and Supervision of the Social Quality of Goods from the South

This text presents a duopolistic North/South model where the Southern firm can choose to produce ethically or not and to lie or not about the real social quality of its production. The goods from the South are assumed to be ethically unsound (i.e. dubious social content) while those from the North ethically sound. We then study the consequences of monitoring ethics in the North on the nature (fair or unfair) and the volume of North–South trade. On the one hand, an increase in the probability of inspection of goods from the South leads to an increase in imports to the North from the South. This result goes against the idea that this kind of social monitoring is akin to a protectionist measure. On the other hand, if monitoring is large enough that leads the Southern firm to produce ethically and the trade to be fair.     

Identification-robust analysis of DSGE and structural macroeconomic models

Full- and limited-information identification-robust methods are proposed for structural systems, notably DSGE models, which are valid whether identification is weak or strong, theory-intrinsic or data-specific. The proposed methods are applied to a standard New Keynesian system for the U.S. Single- and multi-equation estimation and fit are also compared. When a unique rational-expectation stable equilibrium is imposed, the model is rejected. In contrast, limited-information inference produces informative results regarding forward-looking behavior in the NKPC and precise conclusions on feedback coefficients in the reaction function, which cannot be reached via single-equation methods.     

Is Hard Brexit Detrimental to EU Integration? Theory and Evidence

Open Economies Review - In the struggle between the forces of free trade and the restrictive influence of insularism the latter recently seems to have the upper hand. This is illustrated by the...     

Short run and long run causality in time series: inference

We propose methods for testing hypothesis of non-causality at various horizons, as defined in Dufour and Renault (Econometrica 66, (1998) 1099–1125). We study in detail the case of VAR models and we propose linear methods based on running vector autoregressions at different horizons. While the hypotheses considered are nonlinear, the proposed methods only require linear regression techniques as well as standard Gaussian asymptotic distributional theory. Bootstrap procedures are also considered. For the case of integrated processes, we propose extended regression methods that avoid nonstandard asymptotics. The methods are applied to a VAR model of the US economy.     

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.     

An Argument for Deregulating the Transfer of Agricultural Technologies to Developing Countries

In the past few decades many developing countries have liberalizedtrade and investment, removing barriers to imports and allowingthe introduction of new foreign technologies. Unfortunately,agriculture often remains outside this reform process. Regulatoryobstacles continue to restrain the transfer of technologiesthrough private trade in seeds and other inputs. Industrialcountries characteristically allow the transfer of private andpublic technologies through multiple channels. Developing countriesoften force technology transfer through a single channel controlledby government agencies, with an emphasis on official performancetests. This article analyzes the institutional arrangementsgoverning the international transfer of new agricultural technologies,examining the cases of agricultural machinery in Bangladeshand seed varieties in Turkey. The analysis shows that allowingthe private transfer of technologies and refocusing input regulationson externalities could lead to significant productivity andincome gains in developing countries.     

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.     

Exact tests in single equation autoregressive distributed lag models

For hypotheses on the coefficient values of the lagged-dependent variables in the ARX class of dynamic regression models, test procedures are developed which yield exact inference for given (up to an unknown scale factor) distribution of the innovation errors. They include exact tests on the maximum lag length, for structural change and on the presence of (seasonal or multiple) unit roots, i.e. they cover situations where usually asymptotic and non-exact t, F, AOC, ADF or HEGY tests are employed. The various procedures are demonstrated and compared in illustrative empirical models and the approach is critically discussed.