The short-run impact of fluctuating primary commodity prices on three developing economies: Columbia,Ivory Coast and Kenya

Computable general equilibrium models are used to study the short-run impact of fluctuating primary commodity prices on the economies of Columbia, Ivory Coast and Kenya. The results indicate that these economies are destabilized by primary commodity price fluctuations unless governments act to hold real domestic absorption constant. To achieve this, however, would require foreign exchange reserves in excess of the level normally available to these governments for the purpose of stabilizing domestic economic activity.     

Anchoring effects in experimental discount rate elicitation

Discount rates are often elicited using incentivized or hypothetical multiple price lists. We conduct two multiple price lists according to Coller and Williams (Experimental Economics 2: 107–127, 1999) with varying ranges of larger–later payments. Participants carry out both tasks and are randomly assigned to a task order as well as to a payment or no-payment treatment. Our results indicate that the range of the first completed task anchors discount rate decisions. Participants who begin the task with the lower range of the larger–later payments stated lower discount rates than participants who start with the task containing a wider range. Paying monetary incentives does not influence the detected anchor effect.     

The impact of the European Novel Food Regulation on trade and food innovation based on traditional plant foods from developing countries

The stringent food safety assessment for novel foods required by the European Union’s Novel Food Regulation (NFR) places a high burden of proof on those bringing traditional food products to the EU market not consumed in the EU prior 1997. The regulation has emerged as a non-tariff trade barrier for heritage foods from developing countries that are viewed as “exotic” from the EU perspective. We show how the regulation has discouraged investment in supply chains and market development, and how this negatively affects income generation and rural poverty alleviation in developing countries. Focusing on plant-derived foods, this paper proposes to recognize traditional exotic foods in current EU law as a food category sui generis with food safety evidence requirements being proportionate to the risks they may pose. We argue that development activities promoting export food chains must increasingly accommodate legitimate food safety concerns about neglected food species in project design and seek to generate data to enhance regulatory acceptance in target markets.     

Emerging Markets and the Global Monetary System: The Challenge of Rising Inflation

While spillovers of the present financial turmoil in mature economies to emerging economies have so far largely been contained, the monetary policy implications of the financial turbulence present a challenge to the approach pursued by emerging markets in integrating into the global monetary system following the crises of the mid to late 1990s. Specifically, the period of a smooth coexistence between meeting inflation targets and maintaining a high degree of exchange rate stability is likely to come to an end. * At the time of writing this paper, the second author was an advisor at the Deutsche Bundesbank on secondment from the European Central Bank. The views expressed are solely those of the authors. They wish to thank Karlheinz Bischofberger, Ulrich Grosch and Sabine Herrmann for their valuable comments and suggestions, as well as Livia Chitu for excellent research assistance.