Antitrust and Liberalization in developing countries

A number of developing countries around the world have recently liberalized once highly protected regimes through privatization programs and by reducing impediments to market trade. Many of these countries have adopted an antitrust policy as an integral component of their market reforms. Recent assessments of trade liberalization programs show disappointing results. Such outcomes contradict long-held beliefs that free trade is sufficient to generate competitive outcomes in small economies. Antitrust advocates view these underwhelming achievements as further justification for extensive antitrust enforcement. We argue instead that the failure of liberalization suggests not the correctness but the inappropriateness of the enactment of antitrust policies. The continuance of market power after liberalization is due primarily to lobbying activities by producer interest groups to establish nontariff barriers rather than to collusive practices among producers. Interest groups find cartelization and rent seeking as substitutes in raising prices above competitive levels. Accordingly, the establishment of antitrust serves to improve the relative attractiveness of seeking nontariff barriers. Antitrust policies are ineffective in challenging the emergence of nontariff barriers and thus may have the unintended consequence of promoting anticompetitive activities.     

A Complete Nonparametric Event Study Approach

Event studies have been used to examine the direction, magnitude, and speed of security price reactions to various phenomenon. Concerns over the lack of normality in stock return distributions motivated the introduction of nonparametric test statistics in the event study literature. A parametric procedure (OLS), however, has been extensively employed in the estimation of parameters for the market model. This paper, in contrast, applies Theil's nonparametric regression in the estimation of abnormal returns; an approach which is distribution free and provides a complete nonparametric approach for the detection of abnormal performance. Simulation results indicate Theil's estimation procedure offers a slight improvement in power in the detection of abnormal performance over the traditionally employed methodology. The results suggest employing Theil's nonparametric estimation procedure combined with the rank statistic. This complete nonparametric combination offers similar power with fewer underlying assumptions.     

Oil prices and economic activity: evidence for G-7 economies based on a wavelet approach

This study examines the relationship between oil prices and economic activity in the G-7 economies during the period 1960M1–2014M07 using a wavelet approach. The results show significant differences in the relationship between these two variables depending on the frequencies. Furthermore, we find that oil price shocks affect economic activity at low frequencies (long run) in all G-7 countries, while the effect at high frequencies (short run) is limited to a few countries.     

Carbon sequestration and farm income in West Africa: Identifying best management practices for smallholder agricultural systems in northern Ghana

The interest in agricultural soils as global storage of carbon has increased in recent years, along with the prospect of farmers' participation in payment schemes under the Clean Development Mechanism of the Kyoto protocol. Thus, a better understanding of agricultural practices that can increase soil carbon and enhance the livelihoods of farmers is necessary, particularly in smallholder farming systems of West Africa. This study evaluates different crop management strategies both by their capacity to sequester carbon in agricultural soils and by their contribution to household income. A case study in Wa, Upper West Region of Ghana is used to test 48 different cropping strategies by means of a crop simulation model and a household-level multiple-criteria optimisation model. Each cropping strategy is evaluated after a 20-year simulation period by its capacity to accrue carbon in the soil, by its economic performance at the plot-level, and by its contribution to the farm income with and without carbon payments. A set of best management practices that concomitantly increase soil carbon and farm income are identified and classified by their cost of investment.     

A simple Keynesian model of inflation and unemployment under rational expectations

Zusammenfassung Ein einfaches keynesianisches Modell der Inflation und der Arbeitslosigkeit bei rationalen Erwartungen. — Dieser Aufsatz entwickelt ein einfaches makro?konomisches Modell keynesianischer Struktur, in dem eine lang-same Anpassung der Nominall?hne das gleichzeitige Bestehen von Inflation und Arbeitslosigkeit zul?βt. Die Preise der Fertigwaren sind vollst?ndig flexibel, und die Erwartungen hinsichtlich der zukünftigen Preisbewegungen werden rational ge-bildet, so daβ sie alle Informationen über institutionelle Beschr?nkungen des Arbeits-marktes und über die w?hrungs- und fiskalpolitischen Regeln der Regierung ent-halten. Es wird gezeigt, daβ es trotz kurzfristiger Starrheit der L?hne m?glich ist, die Volkswirtschaft sofort bei Zielgr?βen für Inflation und Besch?ftigung zu stabili-sieren, wenn man die Maβnahmen so kombiniert, wie R. Mundell (1971) vorgeschla-gen hat, d.h. die Rate der monet?ren Expansion sollte sich nach der angestrebten Inflationsrate richten und die Fiskalpolitik dem Besch?ftigungsziel dienen.

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Résumé Un simple modèle Keynesien d’inflation et de ch?mage sous des expectatives rationelles. — Ce papier développe un simple modèle macroéconomique de la structure Keynesienne où l’ajustement lent des rémunérations nominales permet la coexistence de l’inflation et du ch?mage. Les prix des biens finaux sont complètement flexibles et les expectatives concernant les mouvements futurs des prix sont formées rationellement en manière qu’elles incorporent toutes les informations regardant les restrictions institutionelles sur le marché du travail aussi bien que les règles de la politique monétaire et fiscale du gouvernement. Nous démontrons que, malgré de la rigidité salariale à court terme il est possible de stabiliser immédiatement l’économie sur le niveau des buts d’inflation et de ch?mage supposé que la combinaison des politiques recommandée par R. Mundell ({dy1971}) soit pour-suivie, c’est-à-dire que le taux de l’expansión monétaire devrait être lié au but d’inflation et la politique fiscale au but de ch?mage.

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Resumen Un modelo keynesiano simple de inflación y desempleo bajo expec-tativas racionales. — En este artículo se desarrolla un modelo macroeconómico simple de una estrutura keynesiana, donde un ajuste lento de los salarios nominales permite la coexistencia de inflación y desempleo. Los precios de los bienes finales son completamente flexibles y las expectativas referentes a movimientos futuros de precios se forman racionalmente, de tal manera que ellas incorporan toda la información referente a limitaciones institucionales en el mercado del trabajo, como también las reglas gubernamentales de las políticas monetaria y fiscal. Se muestra, que a pesar de la rigidez de corto plazo de los salarios, es posible estabilizar instan-tàneamente la economia a niveles establecidos como metas para la inflación y el desempleo, siempre que se aplique la mezcla de politicas recomendada por R. Mundell (1971), p.ej.: la tasa de expansión monetaria debe ser ajustada a la tasa de inflación asignada como meta y la política fiscal a la tasa de desempleo asignada como meta.