From weed to wealth? Prospects for medic pastures in the Mediterranean farming system of north-west Syria

Medic (Medicago spp.) pastures are widely grown in rotation with dryland cereal crops in Mediterranean climate zones of Australia. Attempts since the 1960's to introduce this system to Mediterranean west Asia and north Africa (the native region of medic) have not lead to significant adoption; farmers in the region recognize medic, but as a weed and natural pasture plant. This first detailed economic evaluation of the rotational medic system was conducted using a whole-farm linear programming model based on the agricultural system of north-west Syria. The model represents in detail impacts of rotation on yields, labor requirements of alternative farm activities, availability of family and hired labor, subsistence income requirements, livestock feed sources and uses at different times and a choice of sheep stocking rates. Biological data for the analysis are based on a large six-year cropping and grazing experiment near Aleppo on terra-rossa soil with rainfall mainly in winter and averaging about 330 mm annually. The trial compared a dryland medic-wheat system and traditional two-year rotations of wheat with: fallow, watermelon, lentil and vetch. Results indicate that, given current prices and yields from the trial, medic is less profitable than traditional rotations. The model was used to investigate situations in which medic would be economically preferred. Selection of a medic rotation by the model was found to be particularly sensitive to the area of the farm and the price of labor. On small farms, labor availability per hectare is high, favouring the production of labor intensive crops such as lentil and watermelon. On larger farms, labor costs of these enterprises are substantial, increasing the relative profitability of medic, especially if labor prices increase. Interestingly, the relative desirability of medic is more sensitive to its impact on subsequent wheat crops than to the level of pasture production. We also found that modest increases in the prices of sheep products (especially milk) have a major impact on the economic performance of medic. These insights will allow improved focusing and targeting of future research and extension activities.     

Monetary shocks, the exchange rate, and the trade balance

This paper investigates the response of the exchange rate and the trade balance to monetary policy innovations for the US economy during the period 1973:01–1993:12. The empirical findings indicate that contractionary monetary policy shocks lead to transitory appreciations of the real and the nominal exchange rate. Exchange rate appreciations that are caused by a temporary contractionary shock to monetary policy are correlated with a short-lived improvement in the trade balance which is then followed by a deterioration, giving support to the J-curve hypothesis.     

Are some taxes different than others? An empirical investigation of the effects of tax policy in Canada

This paper investigates the response of major macroeconomic variables to four different types of tax policy innovations in Canada within a VAR framework. The positive tax multipliers documented in the previous literature are found only for corporate tax innovations. Our results indicate that different taxes affect output differently, and imply that the composition of total taxes may be a major factor behind cross-country variation in the sign and magnitude of total tax multipliers.

Beggar thy Neighbor? The Transmission of Fiscal Shocks from the US to Canada

This paper investigates how innovations in income taxes and government expenditures originating in the US affect the US economy, and how these effects are transmitted to the Canadian economy. Using a semi-structural VAR model and data for both countries for the 1961:1–2004:3 period, we find that fiscal policy innovations originating in the US are transmitted to the Canadian economy by international trade and capital flows through interest rate and exchange rate channels. Unanticipated shocks to US government expenditures have beggar thy neighbor effects on Canada. US output increases and Canadian output decreases in response to a positive shock to US government expenditures. In response to an unanticipated increase in US income taxes, US output declines while US and Canadian real interest rates rise. The response of Canadian output, however, is not significantly different from zero.

Anstieg der Altersarmut?

The development of old-age poverty has become an important topic in Germany. Contrary to most studies, a recent report written by the scientifi c advisory council at the German Federal Ministry of Economy asserts that old-age poverty will not become a large socio-political problem in Germany in the future. The authors of this paper warn against downplaying the problem of old-age poverty, and they plead in favour of further reliable research on the issue.     

Für eine Rentenanpassung mit Sicherungsziel

Mit der Rentenreform 2001 wurde das Ziel der Lebensstandardsicherung der bundesdeutschen gesetzlichen Rentenversicherung (GRV) aufgegeben. Stattdessen sollte die Sicherung des Lebensstandards im Alter auf „drei S?ulen“ ruhen. Im Lichte dieses grundlegend ver?nderten Sicherungsziels muss die Frage der Rentenanpassungssystematik neu diskutiert werden. Eine Rentenanpassung ohne Sicherungsziel ist — das zeigen die vergangenen zehn Jahre — letztlich diskretion?r und intransparent. In dem vorliegenden Beitrag wird daher für eine vereinfachte Anpassungsformel mit integriertem Sicherungsziel pl?diert.     

The Behavior of the Real Exchange Rate Under Fixed and Floating Exchange Rate Regimes

This article investigates the behavior of real exchange rates under fixed and flexible exchange rates. Using data from both the Bretton Woods and the modern floating periods, we decompose real exchange rate movements into components attributable to supply shocks, real demand shocks, monetary shocks, capital flows shocks, and real oil price shocks. Empirical results show that real demand shocks are an important source of real exchange rate movements under both fixed and flexible rates, while monetary shocks are negligible. Supply and oil price shocks seem to be more important under Bretton Woods, while capital flows shocks seem to explain a relatively higher proportion of real exchange rate movements under the modern floating period.     

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.     

NONLINEAR GROWTH EFFECTS OF TAXATION: A SEMI‐PARAMETRIC APPROACH USING AVERAGE MARGINAL TAX RATES

One of the major challenges of empirical tax research is the identification and calculation of appropriate tax data. While there is consensus that average marginal tax rates are most suitable for studying the effects of tax policy on economic growth, because of data limitations the calculation of marginal tax rates has been limited to the USA and the UK. This paper provides calculations of average marginal tax rates for the four Scandinavian countries using the methodologies of Seater (1982, 1985) and Barro and Sahasakul (1983, 1986). Then, by pooling the newly calculated tax rates for the Scandinavian countries with the data for the USA and the UK, we investigate the effects of tax policy shocks on the per capita GDP growth rate. Our results suggest that an increase in average marginal tax rates has a negative impact on economic growth. Employing additive mixed panel models with penalized splines as estimation approach, we show that changes in tax rates have nonlinear effects. Increasing average marginal tax rates turn out to be the most distorting at relatively moderate tax rates. Copyright © 2013 John Wiley & Sons, Ltd.