Economics Research International http://www.hindawi.com The latest articles from Hindawi Publishing Corporation © 2014 , Hindawi Publishing Corporation . All rights reserved. Phillips and Wage Curves: Empirical Evidence from Bosnia and Herzegovina Sun, 31 Aug 2014 10:42:58 +0000 http://www.hindawi.com/journals/ecri/2014/436527/ This study is an empirical examination of the existence and characteristics of the Phillips curve and the wage curve in Bosnia and Herzegovina. The findings indicate that there is no evidence of the existence of the short-term Phillips curve. Instead, the data suggests that in the short-term an increase in inflation leads to an increase in unemployment. The estimated wage curves indicate that only increases in real payment increase employment. The conclusion of this study is that increases in inflation might have a negative short-term impact on the level of employment in Bosnia and Herzegovina. Edo Omerčević and Elif Nuroğlu Copyright © 2014 Edo Omerčević and Elif Nuroğlu. All rights reserved. Rural Credit and Farms Efficiency: Modelling Farmers Credit Allocation Decisions, Evidences from Benin Thu, 28 Aug 2014 09:43:11 +0000 http://www.hindawi.com/journals/ecri/2014/309352/ This paper analyses farmers’ credit allocation behaviors and their effects on technical efficiency. Data were collected from 476 farmers using the multistage sampling procedure. The stochastic frontier truncated-normal with conditional mean model is used to assess allocation schemes effects on technical efficiency. Tobit model reveals the impact of farmers’ sociodemographic characteristics on efficiency scores. Results reveal that farm revenue (about 2,262,566 Fcfa on average) is positively correlated with land acreage, quantity of labour, and costs of fertilizers and insecticides. Farmers’ behaviors respond to six schemes which are categorized in two allocations contexts: out-farm and in-farm allocations. The model shows that only scheme (e) positively impacts technical efficiency. This scheme refers to the decision to invest credit to purchase better quality of pesticides, herbicides, fertilizers, and so forth. The positive effect of the scheme (c) may be significant under conditions of farmers’ education level improvement. Then, scheme (e) is a better investment for all farmers, but effect of credit allocation to buy agricultural materials is positive only for educated farmers. Efficiency scores are reduced by household size and gender of the household head. Therefore a household with more than 10 members and a woman as head is likely to not be technically efficient. Comlan Hervé Sossou, Freddy Noma, and Jacob A. Yabi Copyright © 2014 Comlan Hervé Sossou et al. All rights reserved. Are Eurozone Fixed Income Markets Integrated? An Analysis Based on Wavelet Multiple Correlation and Cross Correlation Thu, 28 Aug 2014 00:00:00 +0000 http://www.hindawi.com/journals/ecri/2014/219652/ This paper investigates the synchronization of fixed income markets within Eurozone countries using the new wavelet based methodology. Conventional wavelet methods that use multivariate set of variables to calculate pairwise correlation and cross correlation lead to spurious correlation due to possible relationships with other variables, amplification of type-1 errors, and results, in the form of large set of erroneous graphs. Given these disadvantages of conventional wavelet based pairwise correlation and cross-correlation method, we avoid these limitations by using wavelet multiple correlation and multiple cross correlations to analyze the relationships in Eurozone fixed income markets. Our results based on this methodology indicate that Eurozone fixed income markets are highly integrated and this integration grows with timescales, and hence there is almost no scope for independent monetary policy and bond diversification in these countries. Arif Billah Dar and Firdous Ahmad Shah Copyright © 2014 Arif Billah Dar and Firdous Ahmad Shah. All rights reserved. The Effect of Exchange Rate Movements on Trade Balance: A Chronological Theoretical Review Sun, 24 Aug 2014 09:45:18 +0000 http://www.hindawi.com/journals/ecri/2014/893170/ This paper evaluates the current state of the literature concerning the effects of exchange rate movements on trade balance. Thus, this paper is a review article and provides a survey of the alternative theories that focus on the effect of exchange rate changes on the trade balance. It systemizes the literature into four distinct reviews and approaches following the chronological order. The paper presents the (a) Standard Theory of International Trade, (b) Elasticity Approach, (c) Keynesian Absorption Approach, and (d) Monetary Approach. The study shows that higher attention should be given for the most plausible dynamic theory in this field, known as the J-Curve. Dhakir Abbas Ali, Fuadah Johari, and Mohammad Haji Alias Copyright © 2014 Dhakir Abbas Ali et al. All rights reserved. The Effectiveness and Sustainability of the Sterilization Policy in China Wed, 20 Aug 2014 07:15:13 +0000 http://www.hindawi.com/journals/ecri/2014/509643/ The aim of this paper is to examine the sterilization policy in China. First, several indices are used to measure the status of China’s markets and to determine effectiveness and sustainability of the sterilization policy and the possible impacts it may have induced. Second, within a microeconomic framework, we incorporate the housing price variable into the target loss function of the monetary authority to explore its financial capabilities and evaluate the effectiveness and sustainability of China’s sterilization policy. The empirical results show that Chinese monetary authorities sterilize almost all of the effects of international capital inflows and increase foreign exchange reserves on the monetary base. That is, increased capital mobility does not sabotage the independence of the Chinese monetary policy. Nevertheless, analyses of the sustainability of sterilization policy indicate that the sustainability of the monetary sterilization policy has been seriously challenged since March 2008, which suggests that Chinese monetary authority has endured tremendous pressure for unsustainable sterilization. Chien-Ping Chung, Jen-Te Hwang, and Chieh-Hsuan Wang Copyright © 2014 Chien-Ping Chung et al. All rights reserved. Econometric Analysis of Landscape Preferences in Canterbury, New Zealand Sun, 17 Aug 2014 06:24:23 +0000 http://www.hindawi.com/journals/ecri/2014/259471/ The landscape of rural Canterbury, New Zealand, has evolved from tussock grasslands to one of the most productive dairying areas in the world. While these changes represent a boon for Canterbury’s economy, the visual impact of land-use change has been dramatic. In this paper, we evaluate which changes to the Canterbury landscape have been most pronounced, how people react to those changes, which aspects of the rural landscape are of greatest importance to both urban and rural residents of Canterbury, and whether cost-effective means of mitigating visual changes to the landscape exist. We find that the majority of Cantabrians hold unfavourable views of recent changes to the landscape—particularly with regard to dairying—a finding that is consistent across both urban and rural survey respondents. Using a visual assessment study with cross-classified random effect, we find that dairy cows, irrigators, and silage bales significantly reduce viewers’ subjective evaluations of landscapes while shelterbelts dramatically increase their subjective evaluations. Moreover, native New Zealand shelterbelts are preferred to exotic shelterbelts, but both are preferred to having no shelterbelts, suggesting that the negative visual impacts of dairy farming may be ameliorated by intensified tree planting. P. Brown and C. Mortimer Copyright © 2014 P. Brown and C. Mortimer. All rights reserved. Theocharis Problem Reconsidered in Differentiated Oligopoly Sun, 17 Aug 2014 00:00:00 +0000 http://www.hindawi.com/journals/ecri/2014/630351/ Oligopolies with product differentiation are examined with both quantity-adjusting and price-adjusting firms. Conditions are given for the positivity of the equilibrium outputs as well as for that of the equilibrium prices. The stability of the positive equilibria is then investigated; the positivity and stability conditions are also compared. The dependence of these conditions on the number of firms, their qualifications and the degree of relation between the goods is discussed. The analysis is given by assuming both discrete- and continuous-time scales. Akio Matsumoto and Ferenc Szidarovszky Copyright © 2014 Akio Matsumoto and Ferenc Szidarovszky. All rights reserved. The Long-Term Impact of Human Capital Investment on GDP: A Panel Cointegrated Regression Analysis Tue, 05 Aug 2014 08:11:19 +0000 http://www.hindawi.com/journals/ecri/2014/646518/ This study aims to determine the long-run impact of physical and human capital on GDP by using the panel data set of 13 developed and 11 developing countries over the period 1970–2010. Gross fixed capital formation is used as physical capital indicator while education expenditures and life expectancy at birth are used as human capital indicators. Panel DOLS and FMOLS panel cointegrated regression models are exploited to detect the magnitude and sign of the cointegration relationship and compare the effect of these physical and human capital variables according to these two different country groups. As a consequence of panels DOLS and FMOLS models, the impact of physical capital and education expenditures on GDP in the developed countries is determined as higher than the impact in the developing countries. On the other hand, the impact of life expectancy at birth on GDP is determined as higher in the developing countries. Ahmet Gökçe Akpolat Copyright © 2014 Ahmet Gökçe Akpolat. All rights reserved. The Collaboration of SMEs through Clusters as Defense against Economic Crisis Thu, 24 Jul 2014 00:00:00 +0000 http://www.hindawi.com/journals/ecri/2014/407375/ The aim of this paper is to present the realistic solution to the survival problem that SMEs have during the economic crisis. The role of SMEs is very important in the development of the regional and national economy of each country, particularly for small countries like Greece. On the other hand, universities also play a significant role in the national economy, since they provide Know-How and important research in the SMEs. Nevertheless, due to their small size and financial weakness, especially on the grounds of economic crisis, SMEs would not be able to cover on their own the cost of purchase of university research. The author of this working paper suggests the collaboration of SMEs in the form of clusters so as to be able to self-fund and absorb university Know-How at the same time. Ioannis Makedos Copyright © 2014 Ioannis Makedos. All rights reserved. Relationship between Fiscal Subsidies and CO2 Emissions: Evidence from Cross-Country Empirical Estimates Wed, 23 Jul 2014 06:41:30 +0000 http://www.hindawi.com/journals/ecri/2014/346139/ Countries disburse subsidies with various motivations, for example, to promote industrial development, facilitate innovation, support national champions, and ensure redistribution. The devolution of subsidies may however also encourage economic activities leading to climate change related concerns, reflected through higher greenhouse gases (GHGs) emissions, if such activities are conducted beyond sustainable point. Through a cross-country empirical analysis involving 131 countries over 1990–2010, the present analysis observes that higher proportional devolution of budgetary subsidies leads to higher CO2 emissions. The countries with higher CO2 emissions are also characterized by higher per capita GDP, greater share of manufacturing sector in their GDP, and higher level of urbanization. In addition, the empirical findings underline the importance of the type of government subsidy devolution on CO2 emission pattern. The analysis underlines the importance of limiting provision of subsidies both in developed and developing countries. Sacchidananda Mukherjee and Debashis Chakraborty Copyright © 2014 Sacchidananda Mukherjee and Debashis Chakraborty. All rights reserved. Trade Negotiation Capacity and Health Carve-Outs in Trade Agreements Wed, 23 Jul 2014 06:38:01 +0000 http://www.hindawi.com/journals/ecri/2014/505042/ There is a dearth of scholarship on the relationship between international trade and health status in countries. This paper contributes to filling this gap by proposing a formal analytical framework to study the link between the extent of health issues carved out from trade agreements by negotiating countries and their expenditure on public health. We also examine the role played by the nature of the political and fiscal regime prevalent in the country in the securing of the carve-outs. The model predicts that a higher level of carve-outs is more likely for countries that have relatively low levels of public health spending and which tend to be more politically free and fiscally liberal. We provide anecdotal evidence that supports our findings. Sheikh Shahnawaz Copyright © 2014 Sheikh Shahnawaz. All rights reserved. An Empirical Estimation of the Underground Economy in Ghana Mon, 21 Jul 2014 08:20:49 +0000 http://www.hindawi.com/journals/ecri/2014/891237/ The main aim of this paper is to estimate the size of the underground economy in Ghana during the period 1983–2003. There is no agreement on the appropriate estimation approach to adopt to measure the size of the underground activities. To this end, we employ the well-applied currency demand approach in our measurement. Parameter estimates from the estimated currency demand equation are used in quantifying the ratio of “underground” to “measured” output/income for the Ghanaian economy. The estimated long-run average size of the underground economy to GDP for Ghana over the period is 40%. The underground economy is found to vary from a high of 54% in 1985 to a low of 25% in 1999. Estimates may represent lower bound estimates. Edward Asiedu and Thanasis Stengos Copyright © 2014 Edward Asiedu and Thanasis Stengos. All rights reserved. Determinants of Household Savings in India: An Empirical Analysis Using ARDL Approach Wed, 16 Jul 2014 06:00:11 +0000 http://www.hindawi.com/journals/ecri/2014/454675/ Indian economy witnessed significant transformations in the postreform period both in terms of change in policy paradigm adopting greater market orientation and overall macroeconomic performance with development of a broad-based financial market and increasing global integration. Guided by the fact that domestic savings play a critical role in augmenting capital accumulation and contributing to achieve and sustain high economic growth, an attempt to review and reassess the role of various factors influencing domestic savings under the changed environment is quite relevant for sustaining the growth momentum. In this backdrop, the present study empirically analyzed the role of various determinants of household savings in India with the latest available data. It employed ARDL approach for this purpose due to its suitability for estimating an equation with a mix of stationary and nonstationary variables of order (1) and address potential endogeneity problems. The estimated results revealed that GDP, dependency ratio, interest rate, and inflation have statistically significant influence on household savings in India, both in the long run and short run. As regards policy implications, we suggest that ensuring price stability and avoiding any disruption to the growth process will be useful for augmenting savings and sustaining the savings-growth spiral in India. Amaresh Samantaraya and Suresh Kumar Patra Copyright © 2014 Amaresh Samantaraya and Suresh Kumar Patra. All rights reserved. Domestic Investment, Foreign Direct Investment, and Economic Growth Nexus: A Case of Pakistan Sun, 29 Jun 2014 08:00:28 +0000 http://www.hindawi.com/journals/ecri/2014/592719/ This study aims to find dynamic interaction between domestic investment, foreign direct investment, and economic growth in Pakistan for the period 1976–2010. Phillips and Perron (PP) test is used to assess unit root in the concerned data series. Johansen cointegration approach applied to examine the long run relationship and Toda-Yamamoto causality approach is exercised to evaluate causal linkages. Besides foreign direct investment inflow to Pakistan and domestic investments variables, this study also used GDP as a third variable in order to avoid misspecification problems in the model and also to know the interrelationship between the variables. The empirical findings of this study reveal the existence of long run relationship between domestic investments, foreign direct investment, and economic growth, further supported by Toda-Yamamoto causality, and bidirectional causality has been found between FDI and domestic investment implying that both domestic investment and FDI cause each other. Irfan Ullah, Mahmood Shah, and Farid Ullah Khan Copyright © 2014 Irfan Ullah et al. All rights reserved. Bankruptcy Problem Allocations and the Core of Convex Games Wed, 25 Jun 2014 07:56:31 +0000 http://www.hindawi.com/journals/ecri/2014/517951/ A well-known result related to bankruptcy problems establishes that a vector is a bankruptcy allocation if and only if it belongs to the core of the associated O’Neill’s bankruptcy game. In this paper we show that this game is precisely the unique TU-game based on convex functions that satisfies the previous result. In addition, given a bankruptcy problem, we show a way for constructing bankruptcy games such that the set of bankruptcy allocations is a subset of their core or their core is a subset of the set of bankruptcy allocations. Also, we show how these results can be applied for finding new bankruptcy solutions. William Olvera-Lopez, Francisco Sanchez-Sanchez, and Iván Tellez-Tellez Copyright © 2014 William Olvera-Lopez et al. All rights reserved. Regional Convergence in Greece (1995–2005): A Dynamic Panel Perspective Wed, 25 Jun 2014 05:55:04 +0000 http://www.hindawi.com/journals/ecri/2014/385038/ This paper discusses the issue of regional convergence in Greece during the period 1995–2005. Following the theoretical concept of Barro and Salla-i-Martin, 1990 (- and -convergence concepts), several tests are conducted to test for conditional or unconditional convergence across Greek regions including GMM estimation of Barro regressions. The results indicate absence of convergence across NUTS II regions while there is evidence of convergence at prefectural level (NUTS III). The effect of agriculture industry and services sector is examined and services are found to have significant impact on growth and convergence. Finally, we examine the effect of the implementation of the European funding programs in some detail. Mike Tsionas, Stylianos Sakkas, and Nikolaos C. Baltas Copyright © 2014 Mike Tsionas et al. All rights reserved. Optimal Penalties on Deviations from Budgetary Targets Mon, 02 Jun 2014 09:18:53 +0000 http://www.hindawi.com/journals/ecri/2014/572909/ Beyond traditional arguments justifying the introduction of fiscal rules, this paper analyses their potential contribution to an indirect budgetary coordination between the member countries of a monetary union. Indeed, thanks to appropriate fiscal penalties, the noncooperative and decentralized equilibrium could get closer to the optimal equilibrium where the budgetary authorities cooperate. Our macroeconomic model shows that whatever penalty on the structural budgetary deficit would be optimal in case of asymmetric shocks. A moderate penalty on the excessive indebtedness level would be optimal in “normal times,” or in case of asymmetric shocks if openness to trade and price flexibility are sufficiently high, whereas the share of public consumption in GDP, taxations rates, and indebtedness levels is sufficiently weak in the monetary union. Besides, in case of symmetric shocks, a fiscal penalty would be useful to decrease the excessive budgetary activism, even if it doesn’t allow reaching the optimal and first-best equilibrium. Furthermore, the fiscal penalty should always be an increasing function of the share of public consumption in GDP and of taxation rates but a decreasing function of the strength of automatic stabilizers, of openness to trade, and of price flexibility in the member countries of the monetary union. Séverine Menguy Copyright © 2014 Séverine Menguy. All rights reserved. The Remittances-Output Nexus: Empirical Evidence from Egypt Thu, 22 May 2014 08:27:59 +0000 http://www.hindawi.com/journals/ecri/2014/965240/ This paper examines the long-run causal link between remittances and output in Egypt for the period 1977–2012. The long-run causal link is examined using the autoregressive distributed lag (ARDL) bounds test for cointegration, along with a vector error-correction model to estimate the short- and long-run parameters of equilibrium dynamics. Results show that remittances and GDP are cointegrated, with a statistically significant, positive causality running from remittances to output, while output is found not to be a long-run forcing factor of remittances in Egypt. The findings of this paper shed light on the importance of remittances for promoting economic growth in Egypt. Governmental policies that attract more remittance inflows, along with their efficient use, could promote economic growth in Egypt. Mesbah Fathy Sharaf Copyright © 2014 Mesbah Fathy Sharaf. All rights reserved. Risk Management at the Macroeconomy Level and Development in Developing Countries Mon, 19 May 2014 10:51:52 +0000 http://www.hindawi.com/journals/ecri/2014/505230/ This paper examines the impact of risk management at the macroeconomy level on economic development in developing countries. Based on data from the World Bank, we use a sample of sixty-three developing economies and find that selected indicators related to risk management at the macroeconomy level do have a statistically significant effect on economic development in these countries. We observe that high inflation rates do not seem to statistically affect economic development even though the coefficient estimate of this variable does have the anticipated negative sign. Regression results show that almost sixty percent of cross-developing country variations in purchasing power parity per capita gross national income can be explained by its linear dependency on the share of international reserves in the GDP and the Worldwide Governance Indicators average. Statistical results of such empirical examination will assist governments in developing countries identify risk management strategies at the macroeconomy level that may be used as powerful instruments for economic development. Minh Quang Dao Copyright © 2014 Minh Quang Dao. All rights reserved. Segmented Labor Markets and the Distributive Cycle: A Roadmap towards Inclusive Growth Wed, 30 Apr 2014 07:18:00 +0000 http://www.hindawi.com/journals/ecri/2014/218353/ The paper builds on the Goodwin (1967) model which describes the distributive cycle of capitalist economies whereby mass unemployment is generated periodically through the conflict about income distribution between capital and labor. We add to this model a segmented labor market structure with fluid, latent, and stagnant components. The model exhibits a unique balanced growth path which depends on the speeds with which workers are pushed into or out of the labor market segments. We investigate the stability properties of this growth path with segmented labor markets and find that, though there is a stabilizing inflation barrier term in the wage Phillips curve, the interaction with the latent and stagnant portions of the labor market generates potentially (slowly) destabilizing forces if policy measures are absent that regulate these labor markets. We then introduce an activating labor market policy, where government in addition acts as employer of last resort thereby eliminating the stagnant portion of the labor market, whilst erecting benefit systems that partially sustain the incomes of workers that have to leave the floating/latent labor market of the private sector of the economy. We show that such policies guarantee the macrostability of the economy’s balanced growth path. Matthieu Charpe, Peter Flaschel, Florian Hartmann, and Christopher Malikane Copyright © 2014 Matthieu Charpe et al. All rights reserved. The Government Subsidy Strategy Choice for Firm’s R&D: Input Subsidy or Product Subsidy? Tue, 15 Apr 2014 00:00:00 +0000 http://www.hindawi.com/journals/ecri/2014/632176/ To encourage enterprises to conduct technology innovation, the government needs to formulate appropriate subsidies policy. This paper compares two R&D subsidy policies in a supplier-manufacturer supply chain, in which the manufacturer conducts R&D activity for quality improvement. By means of game theory, we investigate the optimal decisions of the players under the two R&D subsidy policies, that is, input subsidy policy and product subsidy policy. Finally, we compare the profits and welfare to explore the better R&D subsidy policy and provide decision support for government to formulate subsidy policy. The results show that under input subsidy policy the optimal production output, quality improvement, profits, government subsidies, and social welfare are all lower than those of product subsidy policy. Therefore, the government should use product subsidy strategy to encourage enterprise R&D activities. Zhiying Liu and Qinqin Li Copyright © 2014 Zhiying Liu and Qinqin Li. All rights reserved. Bioeconomics of Commercial Marine Fisheries of Bay of Bengal: Status and Direction Thu, 03 Apr 2014 00:00:00 +0000 http://www.hindawi.com/journals/ecri/2014/538074/ The fishery of the Bay of Bengal (BOB) is assumed to be suffering from the overexploitation. This paper aims to assess the sustainability of current level of fishing effort as well as possible changes driven by anthropogenic and climate driven factors. Therefore, the commercial marine fishery of BOB for the period of 1985/86 to 2007/08 is analyzed by applying Gordon-Schaefer Surplus Production Model on time series of total catch and standardized effort. Static reference points such as open-access equilibrium, maximum economic yield, and maximum sustainable yield are established. Assumptions about potential climatic and anthropogenic effects on r (intrinsic growth rate) and K (carrying capacity) of BOB fishery have been made under three different reference equilibriums. The results showed that the fishery is not biologically overexploited; however, it is predicted to be passing a critical situation, in terms of achieving reference points in the near future. But, on the other hand, economic overfishing started several years before. Higher fishing effort, and inadequate institutional and legal framework have been the major bottlenecks for the proper management of BOB fisheries and these may leads fishery more vulnerable against changing marine realm. Thus, the present study calls for policy intervention to rescue the stock from the existing high fishing pressure that would lead to depletion. Ahasan Habib, Md. Hadayet Ullah, and Nguyen Ngoc Duy Copyright © 2014 Ahasan Habib et al. All rights reserved. Exchange Rate Movement and Foreign Direct Investment in Asean Economies Sun, 30 Mar 2014 09:34:44 +0000 http://www.hindawi.com/journals/ecri/2014/320949/ The inflows of foreign direct investment (FDI) are important for a country's economic development, but the world market for FDI has become more competitive. This paper empirically analyses the exchange rate movements and foreign direct investment (FDI) relationship using annual data on ASEAN economies, that is, Malaysia, the Philippines, Thailand, and Singapore. By employing ARDL bounds test approach, the empirical results show the existence of significant long-run cointegration between exchange rate and FDI for the case of Singapore, Malaysia, and the Philippines with all countries recording negative coefficient implying that the appreciation of Singapore dollar, Malaysian ringgit, and the Philippine peso has a positive impact on FDI inflows. Using the ECM based ARDL approach for causality test, both Singapore and the Philippines show long-run bidirectional causality between exchange rate and FDI whereas long-run unidirectional causality running from the exchange rate to FDI in Malaysia. Furthermore, this study also found that short-run unidirectional causality running from the exchange rate to FDI exists in Singapore. Jaratin Lily, Mori Kogid, Dullah Mulok, Lim Thien Sang, and Rozilee Asid Copyright © 2014 Jaratin Lily et al. All rights reserved. Predictable Dynamics in the Small Stock Premium Thu, 20 Feb 2014 08:34:52 +0000 http://www.hindawi.com/journals/ecri/2014/405231/ We start this paper by providing a detailed study of how the mean monthly return on the Small-Minus-Big (SMB) Fama-French factor is affected by the January effect and the stock market return during the preceding month and preceding calendar year. We then proceed to building a predictive model for the monthly SMB factor return that incorporates the January effect and the dependence on both the market return during the preceding month and preceding calendar year. Our findings suggest that a positive small stock premium appears mainly during the years following the years with a negative return on the market as the result of a delayed and stronger reaction of small stocks to good news and a stronger January effect. We also argue that the January effect constitutes a much lesser part of the size effect than it was previously supposed. Valeriy Zakamulin Copyright © 2014 Valeriy Zakamulin. All rights reserved. Evaluation of the 2006–2008 Food Crisis on Household Welfare: The Case of the Sultanate of Oman Sun, 16 Feb 2014 15:31:51 +0000 http://www.hindawi.com/journals/ecri/2014/581638/ The objective of this paper is to evaluate the impact of high food prices during the 2006–2008 food crisis period on the welfare of households in the Sultanate of Oman. The welfare impacts of price changes are estimated using the Hicksian compensating variation (CV) methodology. The compensating variation was estimated for 4 different income household groups as well as two location groups (urban-rural). Results suggest that all household groups suffered welfare losses due to the food crisis. On average, Omani households need to be compensated about 10.3% of their income for the price increase they experienced during the 2006–2008 period. Rural households are more affected than urban households with a required compensation of 12.4% and 9.87%, respectively. In all cases most of the impact is felt on the first round where no consumption adjustment is made; the second round effect is comparatively small compared to the first-order effect. Total compensation required to compensate all households amounts to O.R. 266 M, that is, a 1.14% of GDP, whereas a compensation targeted to the low-income quartile amounts only to O.R. 26.7 M representing 0.1% of GDP. Houcine Boughanmi, Ahmed Al Shamakhi, Msafiri Mbaga, and Hemesiri Kotagama Copyright © 2014 Houcine Boughanmi et al. All rights reserved. Contribution of Co-Skewness and Co-Kurtosis of the Higher Moment CAPM for Finding the Technical Efficiency Thu, 16 Jan 2014 10:00:12 +0000 http://www.hindawi.com/journals/ecri/2014/253527/ The objective of this paper is to present the technical efficiency of individual companies and their respective groups of Bangladesh stock market (i.e., Dhaka Stock Exchange, DSE) by using two risk factors (co-skewness and co-kurtosis) as the additional input variables in the Stochastic Frontier Analysis (SFA). The co-skewness and co-kurtosis are derived from the Higher Moment Capital Asset Pricing Model (H-CAPM). To investigate the contribution of these two factors, two types of technical efficiency are derived: (1) technical efficiency with considering co-skewness and co-kurtosis (WSK) and (2) technical efficiency without considering co-skewness and co-kurtosis (WOSK). By comparing these two types of technical efficiency, it is noticed that the technical efficiency of WSK is higher than the technical efficiency of WOSK for the individual companies and their respective groups. As per available literature in the context Bangladesh stock market, no study has been conducted thus far to measure technical efficiency of companies and their respective groups by using the risk factors which are derived from the H-CAPM. In this research, the link between H-CAPM and SFA is established for measuring technical efficiency and it is believed that the findings of this study may be applied to other emerging stock markets. Md. Zobaer Hasan and Anton Abdulbasah Kamil Copyright © 2014 Md. Zobaer Hasan and Anton Abdulbasah Kamil. All rights reserved. Economics of Bioenergy Tue, 31 Dec 2013 08:51:44 +0000 http://www.hindawi.com/journals/ecri/2013/154928/ Amani Elobeid, Miguel Carriquiry, Silvia Secchi, and Tun-Hsiang (Edward) Yu Copyright © 2013 Amani Elobeid et al. All rights reserved. Biofuel Expansion, Fertilizer Use, and GHG Emissions: Unintended Consequences of Mitigation Policies Mon, 30 Dec 2013 11:58:30 +0000 http://www.hindawi.com/journals/ecri/2013/708604/ Increased biofuel production has been associated with direct and indirect land-use change, changes in land management practices, and increased application of fertilizers and pesticides. This has resulted in negative environmental consequences in terms of increased carbon emissions, water quality, pollution, and sediment loads, which may offset the pursued environmental benefits of biofuels. This study analyzes two distinct policies aimed at mitigating the negative environmental impacts of increased agricultural production due to biofuel expansion. The first scenario is a fertilizer tax, which results in an increase in the US nitrogen fertilizer price, and the second is a policy-driven reversion of US cropland into forestland (afforestation). Results show that taxing fertilizer reduces US production of nitrogen-intensive crops, but this is partially offset by higher fertilizer use in other countries responding to higher crop prices. In the afforestation scenario, crop production shifts from high-yielding land in the United States to low-yielding land in the rest of the world. Important policy implications are that domestic policy changes implemented by a large producer like the United States can have fairly significant impacts on the aggregate world commodity markets. Also, the law of unintended consequences results in an inadvertent increase in global greenhouse gas emissions. Amani Elobeid, Miguel Carriquiry, Jerome Dumortier, Francisco Rosas, Kranti Mulik, Jacinto F. Fabiosa, Dermot J. Hayes, and Bruce A. Babcock Copyright © 2013 Amani Elobeid et al. All rights reserved. Insider Power and Average Labor Demand When Recessions Are Prolonged Mon, 25 Nov 2013 18:53:58 +0000 http://www.hindawi.com/journals/ecri/2013/653731/ This paper examines how insider power in wage negotiations affects average labor demand when recessions are more persistent than booms. It shows that the effect of insider power on average labor demand is more contractionary the greater is the persistence of troughs relative to booms. This analysis is a contribution to the discussion of why the existence of dual labor markets (in which insider power is strong) is negative for employment in the current situation of more prolonged troughs. Pilar Díaz-Vázquez Copyright © 2013 Pilar Díaz-Vázquez. All rights reserved. The Impact of US Biofuels Policy on Agricultural Production and Nitrogen Loads in Alabama Sun, 24 Nov 2013 10:48:10 +0000 http://www.hindawi.com/journals/ecri/2013/521254/ The Energy Independence Security Act aims to increase the production of renewable fuels in order to improve the energy efficiency of the United States of America. This legislation set the biofuel production goal at 136.3 million m3 by 2022, with approximately 79 million m3 derived from advanced biofuels or renewable fuels other than corn ethanol. A bioeconomic model was used to assess the potential impact of the biofuel mandate in terms of nitrogen loss associated with corn production in northern Alabama considering the El Nino Southern Oscillation phases. From simulations conducted at the watershed level, the expansion in biofuel production would increase the production of corn by 122.89% with associated increase in nitrogen loss of 20%. Furthermore, nitrogen loss would be more severe in climatic transition towards La Nina. Ermanno Affuso and Leah M. Duzy Copyright © 2013 Ermanno Affuso and Leah M. Duzy. All rights reserved.