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on Central and Western Asia |
| By: | Raghbendra Jha |
| Abstract: | The fragility of livelihoods and hence the vulnerability of consumption growth due to aggregate shocks in the Indian rural sector have been highlighted recently. However, as yet there exist no estimates of the vulnerability of consumption growth in rural India. This paper attempts to fill this lacuna by providing certainty equivalent growth of consumption in 14 major states of India over the period 1958-1997, corresponding to NSS Rounds 13th to 53rd. The extant debates around poverty-growth elasticities are premised on the assumption of a state of world without any risks and uncertainties. In the real world in which the poor actually live they are subject to risks - both general and idiosyncratic - which affect their welfare. Thus poverty should not be viewed in static terms but within a framework that allows for changing states of the world. This paper shows that certainty equivalent consumption growth in rural India has been much lower than average real per capita consumption growth - indeed, in some cases, it has been negative. This points to the poor performance of consumer-perceived average welfare in India’s rural sector and should be a matter of urgent policy concern. |
| Keywords: | India, Consumption Volatility, National Sample Survey, Certainty Equivalent Consumption |
| JEL: | D12 D18 D69 O12 Q18 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2006-04&r=cwa |
| By: | Jim Hight; Grant Ferrier |
| Abstract: | One of the key challenges to ensuring adequate supplies of fresh water and sanitary wastewater systems is to build the capacity of various stakeholders to manage and deliver water and sanitation services. One element of such capacity building is technological and includes the wide deployment of water quality monitoring and analysis equipment. This report explores four cases in China, India, Malaysia, and Chinese Taipei, where water-quality monitoring and protection capacity has been improved through the use of imported water-quality monitoring equipment combined with indigenous implementation. |
| Keywords: | trade, developing countries, environmental goods, Malaysia, India, water quality, China, Chinese Taipei |
| Date: | 2006–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaaa:2006/3-en&r=cwa |
| By: | Martha A. Starr (Department of Economics, American University); Rasim Yilmaz (Dumlupinar University) |
| Abstract: | Recent banking crises in emerging-market countries have renewed debates about deposit insurance. Because insurance erodes banks’ incentives to manage risks prudently, some argue that its elimination would improve bank stability. Yet eliminating insurance could be destabilizing if it recreates risks of self-fulfilling runs. This paper examines dynamics of depositor behavior during a set of runs on Turkey’s Special Finance Houses, an uninsured sub-sector of Islamic banks. Detailed data on withdrawals are analyzed in a vector-autoregressive framework that enables us to distinguish between informational and self-fulfilling elements of runs. We find that both types of dynamics were at work during the runs, suggesting a role for deposit insurance, judiciously used, in ruling out expectational problems that fuel tendencies to run. |
| Keywords: | bank runs, deposit insurance, Islamic banks, financial development |
| JEL: | G21 G28 O16 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:0806&r=cwa |
| By: | Jagadeesh Sivadasan; Joel Slemrod |
| Abstract: | We use a large dataset covering all registered plants in the manufacturing sector in India over the period 1986 to 1995 to examine the effects of a 1992 income tax law change that eliminated the double taxation of wages paid to partners in partnership firms. This tax law change provides a unique opportunity to identify the effects of tax policy changes on firm behavior in a developing country context. Since the change provided incentives for shifting income from wages to profits, it also has important implications for certain measures of wage inequality. We find an immediate and pervasive response by partnership firms to the tax law change, reflected in a significant shifting of income from profits to managerial wages. Since about 50 percent of registered manufacturing plants are incorporated in the form of partnerships (including most family-run businesses), income shifting by these firms could have a significant impact on measured wage inequality. We find a sizeable jump in the mean and median relative wage of skilled workers (which includes managers and partners) following the tax law change in 1992. This sudden increase in measured wage inequality follows major trade liberalization and deregulation reforms announced earlier (in July 1991). We find that the income shifting induced by the tax law change explains almost all of the observed increase in measured wage inequality following these reforms. This finding is robust to inclusion of controls for a number of other potential sources of post-liberalization increases in wage inequality. Our results show that firms respond strongly to tax incentives for income shifting, and highlight the need to control for the potential effects of tax incentives in studies of wage inequality. |
| JEL: | H32 H25 F14 O24 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12240&r=cwa |
| By: | Mehtap Kesriyeli (Research Department, Central Bank of the Republic of Turkey, Ankara, Turkey); Erdal Ozmen (Department of Economics, METU); Serkan Yigit (Research Department, Central Bank of the Republic of Turkey, Ankara, Turkey) |
| Abstract: | This paper investigates the causes and balance sheet effect consequences of the liability dollarisation of non-financial sectors in Turkey using the Company Accounts database compiled by the Central Bank of Turkey. The results from the panel EGLS and GMM procedures suggest that both sector-specific (tangibility, leverage ratio, export share) and macroeconomic condition variables (inflation, real exchange rate change, budget deficits and confidence) are significant in explaining the corporate sector liability dollarisation. Firms are found to match only partially the currency composition of their debt with their income streams making them potentially vulnerable to negative balance sheet affects of real exchange rate depreciation shocks. Consistent with this argument, real exchange rate depreciations are found to be contractionary, in terms of investments and profits, for sectors with higher liability dollarisation. Macroeconomic instability, as proxied by budget deficits and inflation, appears to have a significant negative affect on the performance of the firms in the non-financial sectors, in terms of their investments, sales and profits. Our results also stress the importance of strong macroeconomic policy stance and price stability for an endogenous dedollarisation process along with regulatory measures to limit vulnerabilities caused by dollarisation. |
| Keywords: | Balance sheet effects, Capital structure, Corporate sector, Debt composition, Liability dollarisation, Turkey |
| JEL: | E22 F31 G32 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:met:wpaper:0507&r=cwa |
| By: | Raghuram G |
| Abstract: | The Jawaharlal Nehru Port Trust (JNPT), an autonomous body under the Major Port Trusts Act, 1963, was commissioned on 26th May, 1989. The port was originally planned to decongest the Mumbai port and serve as a hub port for container handling for the region. JNPT became the first Indian port to handle more than 1 million TEUs (twenty foot equivalent unit, the measure used for container traffic) in 2000-01. In view of the increasing containerised trade, a third container terminal was tendered in October 2002 and awarded in August 2004 to Gateway Terminals of India Private Limited (GTIPL). GTIPL has begun the construction and operations are expected to begin by early 2006. As stated by the Department of Shipping, “The increased volume of container traffic has put a lot of strain on the existing (landside) infrastructure, leading to the problem of frequent congestion in the port.” The author was approached by the Ministry of Commerce for a diagnostic study of JNPT. The study was carried out during February to April 2005. As part of the study, it was decided to keep in perspective three scenarios of traffic: (i) upto 2.5 million TEUs, ie the current levels, (ii) upto 4 million TEUs, ie from mid 2006 as GTIPL becomes operational and (iii) beyond 4 million TEUs, when the fourth box terminal is made operational. This paper presents the analysis and recommendations of the study. |
| Date: | 2006–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2006-04-09&r=cwa |
| By: | Takahiro Ito; Takashi Kurosaki |
| Abstract: | This paper investigates the effects of weather risk on the offfarm labor supply of agricultural households in India. Faced with the uninsurable risk of output fluctuations, poor farmers in less developed countries have various options to smooth income. One of these options is to diversify labor allocation across activities, which this paper focuses on. A key feature of this paper is that it pays particular attention to differences in the covariance between weather risk and agricultural wages on the one hand and between weather risk and nonagricultural wages on the other. We develop a theoretical model of household optimization, which predicts that the impact of weather risk on the offfarm labor supply is larger in the case of nonagricultural wage work than in the case of agricultural wage work when agricultural wages off the farm are positively correlated with own farm income. To test this prediction, we estimate a multivariate tobit model of labor allocation using household data from rural areas of Bihar and Uttar Pradesh, India. The regression results show that the share of the offfarm labor supply increases with the weather risk, and the increase is much larger in the case of nonagricultural wage work than in the case of agricultural wage work. Simulation results based on the regression estimates show that the sectoral difference is substantial, implying that empirical and theoretical studies on farmers' labor supply response to risk should distinguish between the types of offfarm work involved. |
| Keywords: | corvariate risk, non-farm employment, self-employment, food security, India |
| JEL: | Q12 O15 J22 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d06-161&r=cwa |
| By: | Arslan Razmi (University of Massachusetts Amherst) |
| Abstract: | This study empirically investigates the presence of crowding out effects emerging from intra-developing country competition in export markets for manufactured goods. Export equations are estimated for a panel consisting of twenty major developing country exporters of manufac- tures, after developing weighted price and quantity indexes based on their exports to thirteen major industrialized countries. The results indicate that in spite of an increase in the elasticity of industrialized country expenditures on imported products, crowding out effects became much more significant in the 1990s. The estimated crowding out effects vary across time periods, SITC categories, and levels of technological sophistication of exports. JEL Categories: F10, O01, F42 |
| Keywords: | Crowding out, export displacement, real exchange rates, intra-developing country competition, dynamic panel data techniques, generalized method of moments. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2006-05&r=cwa |