Integration of rice markets: the case of southern China

In this article, integration of rice markets in southern China is analyzed using the cointegration technique and monthly price data. Results show that there is a general lack of integration among the indica rice markets in China. Poor transport facilities, government interventions, and the limited amount of grain available for arbitrage are identified as the major impediments to market integration. Policy implications are discussed.     

INFLATION STABILIZATION AND NOMINAL ANCHORS

This paper analyzes the choice of a nominal anchor in disinflation programs in chronic inflation countries. Both theory and evidence suggest several conclusions. (i) The recessionary effects associated with disinflation appear in the early stages of money-based programs but only in the late stages of exchange rate-based programs. (ii) Lack of credibility is more disruptive under fixed exchange rates than under floating exchange rates. (iii) Attempting to pursue a disinflationary policy while maintaining a given level of the real exchange rate is likely to be self-defeating. (iv) A high degree of currency substitution favors the exchange rate as the nominal anchor.     

The vision trap

At Mentor Graphics Corporation, Gerry Langeler was the executive responsible for vision, and vision, he discovered, has the power to weaken a strong company. Mentor helped to invent design-automation electronics in the early 1980s, and by the end of the decade, it dominated the industry. In its early days, fighting to survive, Mentor's motto was Build Something People Will Buy. Then when clear competition emerged in the form of Daisy Systems, a startup that initially outsold Mentor, the watchword became Beat Daisy. Both "visions" were pragmatic and immediate. They gave Mentor a sense of purpose as it developed its products and gathered momentum. Once Daisy was beaten, however, company vision began to self-inflate. As Mentor grew more and more successful, Langeler formulated vision statements that were more and more ambitious, grand, and inspirational. The company traded its gritty determination to survive for a dream of future glory. The once explicit call for effective action became a fervid cry for abstract perfection. The first step was Six Boxes, a transitional vision that combined goals for success in six business areas with grandiose plans to compete with IBM at the level of billion-dollar revenues. From there, vision stepped up to the 10X Imperative, a quality-improvement program that focused on arbitrary goals and measures that were, in fact, beyond the company's control. The last escalation came when Mentor Graphics decided to Change the Way the World Designs. The company had stopped making product and was making poetry. Finally, in 1991, after six years of increasing self-infatuation, Mentor hit a wall of decreasing indicators. Langeler, who had long since begun to doubt the value of abstract visions, reinstated Build Something People Will Buy. And Mentor was back to basics, a sense of purpose back to its workplace.     

North American economic integration and industry location

Does regional economic integration affect the location of economicactivity inside countries? Discussed in this paper is recentacademic literature on whether the movement towards free tradein North America has influenced the spatial organization ofproduction in Canada, Mexico, or the United States. In Mexico,closer economic ties with the United States appear to have contributedto a contraction of employment in the Mexico City manufacturingbelt, a rapid expansion of manufacturing employment in northernMexico, and an increase in the wage premiums paid to skilledworkers. The effects of economic integration on industry locationin Canada and the United States seem to have been much weaker.One exception to this finding is US cities on the Mexican border,whose employment growth is strongly positively correlated withexport production in neighbouring Mexican regions. The implicationof a possible hemispheric free-trade agreement are also discussed.