The impact of jump risks on nominal interest rates and foreign exchange rates

This article investigates the relationship between the nominal interest rate and inflation and also the forward exchange rate under a general specification of the underlying processes govering the foreign exchange rate. There are three distinct risks that affect the relation between the real rate of interest and the nominal rate namely, consumption risk, diffusion risk, and the existence of jump risks of inflation. Jump risks lower the nominal interest rate because of jump hedging of a nominal bond. The forward exchange rate depends on the expected depreciation of the domestic currency as well as these three risks. As the domestic jump risks increase, the domestic nominal interest rate decreases and the forward exchange rate decreases.     

Consumer Behavior, Public Policy, and Country-of-Origin Labeling

Recent work by agricultural economists has failed to adequately identify why consumers desire country-of-origin labeling, a key piece of information needed to determine whether a market-failure exists. This paper brings to the attention of agricultural economists a sizable body of literature on country-of-origin effects from the marketing and business disciplines. Based on this literature, we draw a distinction between several consumer motivations for origin labels and we identify which of these is cause for public policy. We propose several research questions that require answers if the consequences of country-of-origin labeling policy are to be fully understood.     

Research returns redux: a meta-analysis of the returns to agricultural R&D

A total of 289 studies of returns to agricultural R&D were compiled and these provide 1821 estimates of rates of return. After removing statistical outliers and incomplete observations, across the remaining 1128 observations the estimated annual rates of return averaged 65 per cent overall — 80 per cent for research only, 80 per cent for extension only, and 47 per cent for research and extension combined. These averages reveal little meaningful information from a large body of literature, which provides rate-of-return estimates that are often not directly comparable. This study was aimed at trying to account for the differences. Several features of the methods used by research evaluators matter, in particular assumptions about lag lengths and the nature of the research-induced supply shift.     

Some policy implications of bank participation in small business administration lending programs

This study examines the relationship of bank participation in SBA guaranteed lending programs to bank characteristics and market demographic characteristics. Band SBA lending is related to per capita income in the bank's market area, membership in a bank holding company, the loan-deposit ratio of the bank, the percent business loans of the bank, and the total assets of the bank. In markets of 50,000 or less, greater SBA lending is associated with lower per capita income levels. Accordingly, it appears that the economic development function of bank SBA lending is linked to a greater extent with market areas of less than 50,000.