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on Central and Western Asia |
| By: | Manuela Francisco (Universidade do Minho); Michael Bleaney (University of Nottingham) |
| Abstract: | Using data for 102 developing countries, it is shown that inflation persistence is particularly high in countries with severe inflationary problems, and particularly low in countries on hard pegs. Inflation persistence is similar under floating and soft pegs. |
| Keywords: | Inflation, persistence, exchange rates |
| JEL: | E31 F41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:1/2005&r=cwa |
| By: | Mullen, Kathleen; Sun, Dongsheng; Orden, David; Gulati, Ashok |
| Abstract: | In many developing countries, governments rely on price-based measures (including border protection and subsidies on inputs and outputs) more than on budgetary payments to achieve agricultural policy objectives defined to include price stabilization or food self-sufficiency. Assessing the effects of these price-based measures is thus important to evaluating whether agriculture is being protected or disprotected by commodity or in the aggregate. This aspect of producer support estimates (PSEs) is simple to describe conceptually but difficult to evaluate well empirically. Developing countries may face higher international transport and port costs for imports and exports than developed countries or may have substantial internal handling, transportation and processing costs. Separating these structural effects on farmers from agricultural policy effects that drive a wedge between the domestic farmgate price and an adjusted international reference price requires extensive data and judgments. In this paper, we describe the PSE measurement issues and illustrate their importance. We estimate product-specific market price support, budget expenditures and PSEs for three important agricultural commodities (wheat, rice and corn) in India (1985-2002), using representative disaggregated state-level results, and for five commodities (wheat, rice, corn, soybeans and sugar) in China (1995-2001). The results for India suggest that ignoring factors such as internal transport costs, marketing margins and quality differences can result in inaccurate price support estimates and PSEs that may be of the wrong sign. We also explore how relaxing or changing certain standard PSE assumptions (such as altering the “scaling up” procedure or computing the PSE as a percentage of value of production at world reference prices) can have large impacts on the results. Finally, for commodities that are near self-sufficiency, we follow Byerlee and Morris (1993) and define a relevant adjusted reference price based on the relationship between an estimated autarky price and the import and export prices. We discuss this procedure and use the resulting reference prices to compute the market price support component of the PSE for India. Based on our three-commodity PSEs for India, support is largely counter-cyclical, rising when world prices are low (as in the late 1980s and 1990s) and falling when world prices strengthen (as in the mid 1990s). From our more preliminary five-commodity PSE estimates for China, a trend decline in disprotection is more evident. Further research is needed to confirm and elaborate on these results. |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:mtiddp:74&r=cwa |
| By: | Saint-Paul, Gilles |
| Abstract: | This Paper discusses a number of issues in the context of the debate on intellectual property in less developed countries (LDCs). It starts by discussing the consequences of IP enforcement in LDCs for global innovation and welfare in poorer countries. It then considers the costs and benefits of IP enforcement for a small, open LDC, abstracting from global issues. Finally, it discusses the protential merits of an industrial policy based on open source software. The analysis suggests that the view that it is best for LDCs to free-ride on the global IP regime is overblown. |
| Keywords: | comparative advantage; growth; innovation; intellectual property; piracy |
| JEL: | F12 F13 O30 O34 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4713&r=cwa |
| By: | Ho, Tai-Kuang; von Hagen, Jürgen |
| Abstract: | Identifying banking crises is the first step in the research on determinants of banking crises. The prevailing practice is to employ market events to identify a banking crisis. Researchers justify the usage of this method on the grounds that either direct and reliable indicators of banks’ assets quality are not available, or that withdrawals of bank deposits are no longer a part of financial crises in a modern financial system with deposits insurance. Meanwhile, most researchers also admit that there are inherent inconsistency and arbitrariness associated with the events method. This paper develops an index of money market pressure to identify banking crises. We define banking crises as periods in which there is excessive demand for liquidity in the money market. We begin with the theoretical foundation of this new method and show that it is desirable, and also possible, to depend on a more objective index of money market pressure rather than market events to identify banking crises. This approach allows one to employ high frequency data in regression, and avoid the ambiguity problem in interpreting the direction of causality that most banking literature suffers. Comparing the crises dates with existing research indicates that the new method is able to identify banking crises more accurately than the events method. The two components of the index, changes in central bank funds to bank deposits ratio and changes in short-term real interest rate, are equally important in the identification of banking crises. Bank deposits, combined with central bank funds, provide valuable information on banking distress. With the newly defined crisis episodes, we examine the determinants of banking crises using data complied from 47 countries. We estimate conditional logit models that include macroeconomic, financial, and institutional variables in the explanatory variables. The results display similarities to and differences with existing research. We find that slowdown of real GDP, lower real interest rates, extremely high inflation, large fiscal deficits, and over-valued exchange rates tend to precede banking crises. The effects of monetary base growth on the probability of banking crises are negligible. |
| Keywords: | conditional logit model; events method; identification of banking crises; index of money market pressure |
| JEL: | C43 E44 G21 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4651&r=cwa |
| By: | Banerjee, Abhijit; Piketty, Thomas |
| Abstract: | This Paper presents data on the evolution of top incomes and wages from 1922 to 2000 in India using individual tax returns data. Our data shows that the shares of the top 0.01%, the top 0.1% and the top 1% in total income shrank substantially from the 1950s until the early-to-mid 1980s but then went back up again, so that today these shares are only slightly below what they were in the 1920s-1930s. We argue that this U-shaped pattern is broadly consistent with the evolution of economic policy in India: The period from the 1950s to the early-to-mid 1980s was also the period of ‘socialist’ policies in India, while the subsequent period, starting with the rise of Rajiv Gandhi, saw a gradual shift towards more pro-business policies. Although the initial share of this group was small, the fact that the rich were getting richer had a non-trivial impact on the overall income distribution. In particular, its impact is not large enough to fully explain the gap observed during the 1990s between average consumption growth in survey-based NSS data and the National accounts based NAS data, but is sufficiently large to explain a non-negligible part of it (between 20% and 40%). |
| Keywords: | income distribution |
| JEL: | J12 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4632&r=cwa |
| By: | Dorward, Andrew; Fan, Shenggen; Kydd, Jonathan; Lofgren, Hans; Morrison, Jamie; Poulton, Colin; Rao, Neetha; Smith, Laurence; Tchale, Hardwick; Thorat, Sukhadeo; Urey, Ian; Wobst, Peter |
| Abstract: | "This paper draws together findings from different elements of a research project examining critical components of pro-poor agricultural growth and of policies that can promote such growth in poor rural economies in South Asia and Sub-Saharan Africa. Agricultural growth, a critical driver in poverty reducing growth in many poor agrarian economies in the past, faces many difficulties in today's poor rural areas in South Asia and Sub-Saharan Africa. Some of these difficulties are endogenous to these areas while others result from broader processes of global change. Active state interventions in 'kick starting' markets in 20th century green revolutions suggest that another major difficulty may be current policies which emphasize the benefits of liberalization and state withdrawal but fail to address critical institutional constraints to market and economic development in poor rural areas. This broad hypothesis was tested in an analysis of the returns (in agricultural growth and poverty reduction) to different government spending in India over the last forty years. The results reject the alternate hypothesis underlying much current policy, that fertilizer and credit subsidies, for example, depressed agricultural growth and poverty reduction in the early stages of agricultural transformation. The results show initially high but then declining impacts from fertilizer subsidies; high benefits from investment in roads, education and agricultural R&D during all periods and varying benefits from credit subsidies over four decades; low impacts from power subsidies; and intermediate impacts from irrigation investments. These findings demand a fundamental reassessment of policies espousing state withdrawal from markets in poor agrarian economies. Given widespread state failure in many poor agrarian economies today, particularly in Africa, new thinking is urgently needed to find alternative ways of 'kick starting' markets ways which reduce rent seeking opportunities, promote rather than crowd-out private sector investment, and allow the state to withdraw as economic growth proceeds. Authors' Abstract |
| Keywords: | Agricultural growth ,Poverty, Rural ,South Asia Rural poor ,Africa, Sub-Saharan ,Agrarian economies ,Globalization ,Green Revolution ,Poverty alleviation ,Government spending policy India , |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:dsgddp:15&r=cwa |
| By: | Rao, P. Parthasarathy; Birthal, P. S.; Joshi, P. K.; Kar, D. |
| Abstract: | Indian agriculture is diversifying during the last two decades towards High-Value Commodities (HVCs) i.e., fruits, vegetables, milk, meat, and fish products. The pace has been accelerated during the decade of 1990s. HVCs account for a large share in the total value of agricultural production. Supply and demand side factors coupled with infrastructural development and innovative institutions drive these changes. In this paper, the focus is on diversification towards HVCs in the context of urbanization. Group of urban districts (districts with >1.5 million urban population) have a higher share of HVCs compared to the urban-surrounded (near urban districts) and other districts (districts in the hinterland). Among the HVCs, vegetables and meat products have a higher share in urban districts compared to the other two groups. Milk production is more widespread due to excellent network of co-operatives and infrastructure facilities. Using GIS (geographic Information System) approach it was found that urban-surrounded districts with better road network connection to urban centers have been able to diversify towards HVC's to meet the demand in the urban centers. Model results further confirm these findings. Thus, urbanization is a strong demand side driver promoting HVCs. Since urban population is growing at more than 3% per annum, demand for HVCs will drive their production. The analysis has also brought out regional variations in HVCs across different districts in the country that has implications on regional development and planning, and consequently on public and private sector investment strategies. |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:mtiddp:77&r=cwa |
| By: | Abou-Ali, Hala (Department of Economics, School of Economics and Commercial Law, Göteborg University); Belhaj, Mohammed (IVL) |
| Abstract: | This paper analyzes the welfare effects of a 50 percent reduction in air pollution caused by road traffic in both Cairo (Egypt) and Rabat-Salé (Morocco) using a contingent valuation method with identical elicitation questions. Despite the fact that both the numbers of inhabitants and vehicles are higher in Cairo the willingness to pay to reduce the impacts of vehicle emissions is higher in Rabat-Salé although incomes are rather similar in both cities. This paper shows that the relatively often-used benefit transfer frequently leads to biases where damage costs are under- or overestimated. <p> |
| Keywords: | Air pollution; Benefit transfer; Contingent valuation; Willingness to pay |
| JEL: | C25 Q53 |
| Date: | 2005–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0158&r=cwa |
| By: | Arslan Razmi (University of Massachusetts Amherst); |
| Abstract: | This study applies the Balance of Payments Constrained Growth (BPCG) model to India, a large developing country with a relatively low trade to GDP ratio. Rather than assuming similar elasticities of substitution between goods produced in different regions, the study extends the model to relax these assumptions. Johansen’s cointegration technique is employed to estimate trade parameters. Short-run adjustments are explored within a vector error correction framework. The average growth rates predicted by various forms of the BPCG hypothesis are found to be close to the actual average growth rate over the period 1950-1999, although individual decades display substantial deviations. JEL Categories: F43, F14, E12 |
| Keywords: | Balance of payments-related constraints, real exchange rates, Johansen’s cointegration technique, strong form, weak form, trade multiplier, import compression. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2005-05&r=cwa |
| By: | Ajai Nair |
| Abstract: | The major form of microfinance in India is that based on women’s Self Help Groups (SHGs), which are small groups of 10–20 members. These groups collect savings from their members and provide loans to them. However, unlike most accumulating savings and credit associations (ASCAs) found in several countries, these groups also obtain loans from banks and on-lend them to their members. By 2003, over 700,000 groups had obtained over Rs.20 billion (US$425 million) in loans from banks benefiting more than 10 million people. Delinquencies on these loans are reported to be less than 5 percent. Savings in these groups is estimated to be at least Rs.8 billion (US$170 million). Despite these considerable achievements, sustainability of the SHGs has been suspect because several essential services required by the SHGs are provided free or at a significantly subsidized cost by organizations that have developed these groups. A few promoter organizations have, however, developed federations of SHGs that provide these services and others that SHG members need, but which SHGs cannot feasibly provide. Using a case study approach, Nair explores the merits and constraints of federating. Three SHG federations that provide a wide range of services are studied. The findings suggest that federations could help SHGs become institutionally and financially sustainable because they provide the economies of scale that reduce transaction costs and make the provision of these services viable. But their sustainability is constrained by several factors—both internal, related to the federations themselves, and external, related to the other stakeholders. The author concludes by recommending some actions to address these constraints. This paper—a product of the Finance and Private Sector Development Unit, South Asia Region—is part of a larger effort in the region to study access to finance in India. |
| Keywords: | Domestic Finance; Poverty; Rural Development; Social Development |
| Date: | 2005–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3516&r=cwa |
| By: | Botticini, Maristella; Eckstein, Zvi |
| Abstract: | This Paper documents the major features of Jewish economic history in the first millennium to explain the distinctive occupational selection of the Jewish people into urban, skilled occupations. We show that many Jews entered urban occupations in the eighth-ninth centuries in the Muslim Empire when there were no restrictions on their economic activities, most of them were farmers, and they were a minority in all locations. Therefore, arguments based on restrictions or minority status cannot explain the occupational transition of the Jews at that time. Our thesis is that the occupational selection of the Jews was the outcome of the widespread literacy prompted by a religious and educational reform in the first century CE, which was implemented in the third to the eighth century. We present detailed information on the implementation of this religious and educational reform in Judaism based on the Talmud, archeological evidence on synagogues, the Cairo Geniza documents, and the Responsa literature. We also provide evidence of the economic returns to Jewish religious literacy. |
| Keywords: | first millennium; human capital; Jewish economic history; migration; occupational choice; religion and social norms |
| JEL: | J10 J20 N30 O10 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4604&r=cwa |
| By: | Cohen-Goldner, Sarit; Paserman, Daniele |
| Abstract: | This Paper studies the impact of mass migration from the Former Soviet Union to Israel on natives’ probability of moving from employment to non-employment in a segmented labour market that is defined by various combinations of schooling, occupation, industry, district of residence and experience. We find that the share of immigrants in a given labour market segment is generally positively associated with the probability of natives to move from employment in that segment to non-employment, both for males and females. When segment fixed-effects are added, this effect all but disappears for females, and is substantially reduced for males. We conclude that immigrants are negatively selected into occupations with high turnover and that natives were not facing higher probability to exit employment due to immigrants’ presence in a certain occupation. Allowing the effect to vary across natives with different levels of education and experience reveals that, young men, educated men and workers in the private sector are adversely affected by the presence of immigrants. |
| Keywords: | immigration; labour demand and supply; segmented labour markets |
| JEL: | F22 J00 J21 J30 J61 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4629&r=cwa |
| By: | Cohen-Goldner, Sarit; Paserman, Daniele |
| Abstract: | This Paper studies the dynamic impact of mass migration from the Former Soviet Union to Israel on natives’ labour market outcomes. Specifically, we attempt to distinguish between the short-run and long-run effects of immigrants on natives’ wages and employment. The transition of immigrants into a new labour market is a gradual process: the dynamics of this process come from immigrants’ occupational mobility and from adjustments by local factors of production. Natives may therefore face changing labour market conditions, even years after the arrival of the immigrants. If immigrants are relatively good substitutes for native workers, we expect that the impact of immigration will be largest immediately upon the immigrants’ arrival, and may become smaller as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives because of their lack of local human capital, the initial effect of immigration is small, and the effect increases as immigrants acquire local labour market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel’s Labor Force and Income Surveys from 1989 to 1999. We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a given labour market segment. A 10% increase in the share of immigrants lowers natives’ wages in the short run by 1 to 3%, but this effect dissolves after 4 to 7 years. This result is robust to a variety of different segmentations of the labour market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the long run. |
| Keywords: | immigration; labour demand; labour supply; segmented labour markets |
| JEL: | F22 J00 J21 J30 J61 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4640&r=cwa |
| By: | Neuman, Shoshana; Ziderman, Adrian |
| Abstract: | This study examines the extent, duration and timing of employment breaks amongst a large representative sample of Jewish workers in Israel over the 13-year time period, 1983-95. Work histories are constructed from a new joint database, unique in Israel, which was derived from a linkage of 1995 Population Census data with monthly employment records of the National Insurance Institute. The Paper focuses on gender differences in work history patterns and, within each gender, breakdowns are provided by ethnic origin, marital status, age and education level. While most of the results are both expected and compatible with current economic theories of household behaviour, some of the findings of the study are less expected, particularly those relating to the considerable amount of intermittent employment found amongst Israeli male workers. Also, women’s labour market attachment is stronger than is generally presumed. Gender differences in employment interruptions are greater for younger than older workers. |
| Keywords: | age; education; employment; ethnicity; gender; marital status; non-employment; spells |
| JEL: | J12 J15 J16 J21 J22 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4708&r=cwa |
| By: | Neuman, Shoshana; Oaxaca, Ronald L |
| Abstract: | The purpose of this Paper is to investigate wage structures of professional workers in the Israeli labour market, using data from the most recent 1995 Census and correcting for selectivity at the stage of entrance into the occupation. The sample of professionals is decomposed into several subsamples: men and women, and within each gender a distinction is made between Easterners (originating from Asian/African countries) and Westerners (from European/American countries of origin). Comparisons by gender and ethnicity can then be made. Characteristics (endowments) and wage structures of the four groups are presented.Wage equations include the Inverse of Mill's Ratio as a regressor to correct for selection into the professional occupations. Wage differences are then examined and decomposed into three components: endowments (human capital), discrimination and selectivity. Following the methodology presented in Neuman and Oaxaca (2004), four alternative decompositions are suggested and discussed. |
| Keywords: | age; education; employment spells; ethnicity; gender; marital status; non-employment |
| JEL: | J12 J15 J16 J21 J22 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4709&r=cwa |