Factors Affecting Technical Efficiency among Coffee Farmers in Côte d’Ivoire: Evidence from the Centre West Region

This paper presents measures of technical efficiency for a sample of 81 peasant farmers in the low‐income region of Côte d’Ivoire. DEA techniques were used to compute farm‐level technical efficiency (TE) measures. The analysis reveals average levels of technical efficiency equal to 36 per cent and 47 per cent respectively for the CCR ( Charnes et al., 1978 ) and BCC ( Banker et al., 1984 ) models. These results suggest that substantial gains in output and/or decreases in cost can be attained given existing technology. In a second step analysis, two‐limit Tobit regression techniques were used to examine the relationship between TE and various farm/farmer characteristics. From a policy point of view, an important conclusion stemming from the analysis of our sample is that family size, membership to farmer's club or association and the origin of the farmer are the variables found to be most promising for action. The analysis suggests that policymakers should foster the development of the formal farmers’ club or association by building the capacity of the farmers. Our analysis also supports the argument for public sector involvement in the provision of information on labour force management to peasant farmers as a means to improve efficiency levels, and thus household incomes.     

Can the Euro Survive?

One of the fascinating aspects of the European debt crisis has been the resilience of the euro. For much of 2011, the euro was a key reserve currency, oblivious to the chaos ravaging European economies. Now, however, the gravity of the crisis is finally dragging down the euro. As the Euro zone debt crisis enters its third uncertain year, the question about whether the euro can survive rises. This paper argues that the euro can survive given policymakers still have in hand various tools. These tools include creating exit rules, implementing new stabilisation rules and instruments, adopting new fiscal policy, introducing conditional Eurobonds, using inflation differentials and providing more independence to the European Central Bank.     

Inflation dynamics and the cost channel of monetary transmission

Evidence from vector autoregressions indicates that the impact of interest rate shocks on macroeconomic aggregates can substantially be affected by the so-called cost channel of monetary transmission. In this paper, we apply a structural approach to examine the relevance of the cost channel for inflation dynamics in G7 countries. Since firms’ costs of working capital increase with interest rates, we augment a (hybrid) New Keynesian Phillips curve by including the short-run nominal interest rate. We find significant and varying direct interest rate effects for the majority of countries, including member countries of the EMU. Simulations further demonstrate that the estimated interest rate coefficients can substantially affect inflation responses to monetary policy shocks, and can even lead to inverse inflation responses, when the cost channel is - relative to the demand channel - sufficiently strong.     

An analysis of decentralized collection and processing of end-of-life products

In this study, we analyze decentralized collection and processing operations for end-of-life products in durable goods industries. We consider a durable end-of-life product from which a particular part can be dismantled and remanufactured, and the remainder of the product can be further processed for part and/or material recovery. Both the quantity of end-of-life products available and the demand for remanufactured parts are price-sensitive. We develop models to determine the optimal acquisition price of the end-of-life products and the selling price of the remanufactured parts in centralized as well as remanufacturer- and collector-driven decentralized channels. We discuss how the decentralized channels can be coordinated to attain the end-of-life product collection rate that can be achieved in the centralized channel. In the presence of environmental regulations that require an original equipment manufacturer (OEM) of durable goods to collect and process its end-of-life products, we identify when and why the OEM would prefer a remanufacturer- or a collector-driven channel, i.e., outsource the processing or the collection activity, respectively. From a practical perspective, we show that the OEM should prefer a collector-driven channel to increase the collection rate, when end-of-life products are homogenous. However, we also show that the OEM would prefer a remanufacturer-driven channel under certain conditions. We also examine how the OEM can increase the quantity of used products collected, when the collection rate in the preferred channel setting falls short of the collection rate mandated by the environmental regulation. When end-of-life products are heterogeneous, we observe that the collection rate for all quality groups can be positive in a remanufacturer-driven channel, whereas the collection rate for some quality groups may be zero. This indicates that the OEM must pay more attention to its outsourcing decision in this case, if the environmental regulation in effect specifies target collection rates for individual quality groups.     

Federal reserve policy viewed through a money supply lens

Federal Reserve nonborrowed reserve supply systematically responded to changes in inflation and in the output gap over the period 1969-2000. While the feedback from output gap is always negative, the response of money supply to changes in inflation varies considerably across time. Nonborrowed reserves decreased with inflation in the post-1979 period and increased in the pre-1979 period. Applying a standard macro-model, the estimated reaction functions are shown to ensure equilibrium determinacy. Viewed through the money supply lens, Federal Reserve policy substantially changed over time, but has never allowed for endogenous fluctuations, which contrasts conclusions drawn from federal funds rate analyses.     

Structural changes,competition and bank stability in Malaysia’s dual banking system

This paper assesses Malaysia’s competition landscape and its risk implications subsequent to conventional banking consolidation and Islamic banking penetration in the aftermath of the 1997/1998 Asian financial crisis. Employing a panel sample of conventional and Islamic commercial banks, it arrives at the following conclusions. First, the consolidation exercise, which has led to a significant reduction in the number of domestic commercial banks, has not stifled banking competition. Second, the paper provides empirical support for the competition-stability relationship, particularly for the conventional banking sector. Islamic banking sector risk appears to be neutral to market competition or market power, although there is limited evidence that it increases with overall market concentration. Finally, the analysis uncovers the risk-increasing effect of the Islamic banking market structure on the conventional banking sector. By contrast, conventional banking market concentration tends to reduce the credit risk of Islamic banks.     

The causality between FDI and sector-specific production in Turkey: evidence from threshold cointegration with regime shifts

This article considers bidirectional nonlinear cointegration relation between FDI and industrial output in Turkey. The data cover the monthly period 2005:1–2013:10 for the time series of total industrial production, 36 sub-industrial sectors’ production and FDI. Following nonlinear threshold cointegration and VECMs, the article yields that (i) total industrial production and nine sub-industrial productions have positive long-run impact on FDI with significant error corrections, (ii) six sub-industrial productions have short-term influence on FDI, (iii) FDI has long-run positive impulse on total industrial production and nine sub-industrial productions with some significant error corrections and (iv) FDI affects four sub-industrial productions in the short run as well as in the long run. The results of VECMs from (i) also reveal that the all short-term adjustment parameters are found significant and powerful in 10 typical regimes (Regime-1s) and in 5 extreme regimes (Regime-2s). Finally, the outcome of VECMs from (iii) yields that short-term adjustment parameters are found significant and powerful in two typical regimes and in four extreme regimes. Eventually, considering FDI’s positive impact in the short and long run, this article suggests that policymakers promote specifically the FDI inflows to the sectors of intermediate goods, manufacture of beverages, manufacture of rubber and plastic and manufacture of other nonmetallic mineral products.     

Export externalities and economic growth

Feder formulated the first model with an explicit mechanism connecting international trade and economic growth. We present new econometric estimates of this unique model for 30 developing countries studied by Feder. We replicate Feder's 1964?–?73 cross-section estimates for 1974?–?83 and 1984?–?93 and find that the export variables lose significance and that the model has less explanatory power overall. We also try to improve on time-series estimates by Ram and find that the coefficient of Feder's total factor productivity differential in favour of the export sector was positive and significant for 18 of the 30 countries. The export externality coefficient proved to be positive and significant in 13 countries although significant multicollinearity occurs in the regressions for eight of the 13. Comparisons of the results among countries suggest that the impact of exports on growth depends on population size, trade orientation, and the importance of manufacturing.