Showing papers on "Commodity published in 1982"

The Theory of Economic Integration

Abstract: 1. Introduction Part 1: The Statics of Economic Integration 2. Commodity Movements: Production Aspects 3. Commodity Movements: Consumption and Welfare Aspects 4. Factor Movements Part 2: The Dynamics of Economic Integration 5. National Frontiers and Economic Growth 6. Economies of Scale 7. External Economies 8. Further Dynamic Factors Part 3: Integration and Economic Policy 9. Regional Problems in a Common Market 10. Harmonization of Social Policies 11. Fiscal Problems in a Union 12. Monetary Unification and the Balance of Payments

Search and Consumer Theory

Abstract: A consumer faces list prices for commodities, but can buy one at a discount. Discounts vary randomly between sellers. The number of quotations sought depends on list prices, search costs and wealth. This function is homogeneous of degree zero, and, provided some sufficient conditions are satisfied, is; increasing in wealth; decreasing in search cost; independent of the list price of the discounted commodity if indirect utility is multiplicatively separable; increasing in the list price if the commodity is a necessity; increasing in the list price of substitutes. Slutsky's equation is generalized to include search.

Chapter 9 Consumer theory

Abstract: Publisher Summary The main objective of consumer theory is to determine the impact on observable demands for commodities of alternative assumptions on the objectives, on the behavioral rules of the consumer, and on the constraints that they faces while making a decision. The chapter explains that the traditional model of the consumer takes preferences over alternative bundles to describe the objectives. Commodities can be divided into goods and services. Each commodity is completely specified by its physical characteristics, location, and date at which it is available. In studies of behavior under uncertainty, an additional specification of the characteristics of a commodity relating to the state of nature occurring is added, which leads to the description of a contingent commodity. The behavioral rule consists of maximization of these preferences under a budget restriction, which determines the trading possibilities. The principal results of the theory consist of the qualitative implications on observed demand of changes in the parameters, which determine the decision of the consumer. The historical development of consumer theory indicates a long tradition of interest of economists in the subject, which has undergone substantial conceptual changes over time to reach its present form.

The Efficiency of Housing Search

Abstract: Previous research in the housing market has largely focused on housing market outcomes (e.g., the quantity of housing services demanded or supplied or the determination of equilibrium prices); scant attention has been directed at the processes producing these outcomes. Recently, economists have developed models of buyer and seller search processes in housing markets [6; 22], but almost no empirical testing of these models has been done.' The importance of search in economic markets has been discussed by Lippman and McCall [15]. The difficulties encountered by deterministic theories of economic markets in explaining different prices for "identical" commodities and persistent positive levels of "unemployed" resources are overcome when search is introduced. Search may be of even greater importance in housing markets than in most other economic markets. Housing generally accounts for the largest item of consumption for most households; for homeowners, housing is usually the household's largest asset. Housing is a heterogeneous commodity that is traded in highly decentralized markets.2 The costs of moving can be substantial, reducing the gains from relocation. The consumption of housing also involves externalities that add to the heterogeneity of the consumption bundle. Finally, recent theoretical work by Courant [6] suggests that the rational search behavior of households facing discrimination in housing markets might act to perpetuate adverse market conditions facing such households. Given the importance of housing as a consumption commodity and as an asset and the above characteristics of housing and housing markets, previous descriptive examinations

State Trading and the Theory of International Trade

Abstract: Direct participation by the state in international trading activities is only one of very many forms of state intervention in the flow of commodities across national borders. All forms of intervention distort the pattern of trade from what it would have been in the absence of intervention. There is a well-developed theory of intervention which quantifies the magnitude of government interventions and predicts their effects on the quantities traded, consumed and produced of commodities. Somewhat surprisingly, in view of its significant share of total global commodity trade,l state trading has not been widely analysed in the terms of international trade theory. The only extensive analyses of state trading, as far as I am aware, are those of Meade (1955) and Humphrey (1959).2 Most of the literature on state trading has been concerned with trade in which either the Soviet Union and other centrally-planned economies or the developing countries provide at least one of the trading partners. This seems to have promoted a tendency to regard state trading as a problem in compara­tive systems, even though state trading is widespread (see Kostecki, 1978, 1979).3

A political economic theory of the dental care market.

Abstract: A theory of the dental care market is introduced which proposes that the vertically integrated (local/state/national) structure of the profession services as an organizational vehicle both for intra-professional debate and for developing provider-oriented dental care policy. We suggest that a special relationship exists between professionalism and professional regulation. Such regulation has functioned simultaneously to limit competition and to foster a prized consumption commodity for providers: professionalism and professional esteem. The organized pursuit of this commodity inherently dampens competition. Professionalism itself plays a crucial role in: 1) securing for organized dentistry a form of state regulation in which the providers themselves are the principal decision-makers; and 2) influencing provider and consumer market behavior in several significant respects, the net result being the formation of maintenance of a type of "leadership cartel" in the local market. Thus, a political-economic theory of the dental care market formally acknowledges professionalism as valued by established dentists and recent graduates as a central determining influence. Traditional models of pure competition and monopoly emerge as special, extreme cases of the general theory. Hypotheses are offered regarding consumer and provider behavior, market dynamics, and health policy and regulation.

Optimal Policy in the Presence of Licensed Technology from Abroad

Abstract: This paper extends the theory of international trade to analyze optimal commercial policy of a country importing technology for which royalties must be paid to foreigners. As the analysis shows, the country can maximize national welfare by combining a tax on international trade in commodities and a domestic commodity-market tax or subsidy, depending, respectively, on whether foreigners are net exporters or importers of the commodity whose technology is licensed internationally. The analysis also demonstrates that the maximum level of national welfare might be lower with than without technological imports, if the country's exportable commodity uses the foreign technology.

The socialization of commodities

Abstract: Usher (1977) provides an interesting analysis of what he terms the ‘socialization’ of commodities. Usher defines a commodity as being socialized when the ‘government appropriates the whole supply by purchase or by production in the public sector and reallocates the supply among consumers, equally or according to some nonpecuniary criterion’.’ He cites the public provision of health care and education as primary examples of socialization. Usher examines a simple general equilibrium model in which all consumers are assumed to have Cobb-Douglas utility functions with a single taste parameter that varies across individuals. The government levies a linear income tax and uses the revenues to finance the provision of equal quantities of the socialized good to all consumers. The decision to socialize the provision of the commodity is made by majority vote. Each voter compares his or her levels of utility under socialization and under competitive supply. As Usher points out, in his model, there are two factors that determine whether society will choose socialization. 2 First, under proportional taxation, people with incomes below the mean pay less than proportional shares of cost of the socialized good. Thus, poorer people tend to favor socialization, while the rich vote against it. Typically, the median income is less than the mean, and one would expect the socialization of all commodities if this factor were the only consideration in the decision to socialize. There is an opposing force, however. In a society with a diversity of tastes, individuals will desire to consume varying amounts of the good. Under socialization, as defined by Usher, all people must consume the same amount

Futures trading, risk reduction and price stabilization

Abstract: This paper concludes that futures markets offer better insurance to producers than price stabilization schemes except when the producer has a very low correlation between his output and the world price. In this case, however, a price guarantee scheme operated by a domestic Marketing Board offers such a small improvement in income insurance that such benefits will almost certainly be offset by costs of operating such a scheme. Although government intervention seems unattractive for small price taking countries, it will be attractive to large producers, since this intervention can take the form of restricting supply to increase the spot price, and of manipulating the futures market. Large producers benefit from making the futures market less attractive to small producers and, therefore, increasing their risk and reducing supply. The large producer may also find it attractive to manipulate the futures market in a predictable way to increase his profits. Ths paper shows that if all producers face pure demand risk, then large commodity producers have no special reason other than financial size for speculating in the futures market; but if all producers face correlated supply risk, then the large producer benefits from manipulating the futures market.

Use of errors of prediction in improving forecast accuracy: an application to wool in australia

Abstract: Over the past 20 years, the RAE has produced commodity forecasts in BAE Trends in Australian Agricultural Commodities, Farm Costs and Farm Incomes and other commodity outlook publications There have been several studies on the accuracy of the forecasts, either comparing RAE forecasts with naive forecasts or making simple calculations of biases and standard deviations Such approaches are not sufficiently informative in that they do not give any indication of what has caused the inaccuracies, nor of the timing of significant changes in prediction accuracy In this analysis, an attempt is made to improve upon this situation using some tools of time series analysis

Government-controlled Food Grain Markets, External Trade in Food Grains and Agricultural Development: the Case of Four Countries in East Africa

Abstract: Governments pursue two major kinds of policies that affect agricultural production and incomes. First, they control the domestic prices of agricultural commodities, which cause movements along agricultural supply curves. Second, they invest in agricultural research, education, and transportation systems, which shift agricultural supply curves over time. The first will be called 'commodity' policies and the second, 'development' policies. Positive policies of either type can increase agricultural production and, given input prices, agricultural incomes, but the means of achieving such increases, as Ricardo ( 1970 [ 1821 ], p. 79) pointed out more than 160 years ago, greatly affect the overall rate of economic development in less developed countries. This paper examines these two types of policies in the case of four countries in East Africa. Kenya, Malawi, Tanzania, and Zambia are all former British colonies that became independent between 1961 and 1964. Owing to their common geographical and historical legacy, they have similar economic and institutional structures, including their governments' interventions in domestic food grain markets. All have been blessed with stable government since independence and considerable continuity in economic policy. The four countries are an economic laboratory for studying the impact of agricultural commodity and development policies. Between 1964 and 1978which excludes the effects of the most recent drought to hit the region, beginning in 1979real GDP grew faster in Kenya and Malawi than in Tanzania and Zambia (see Table 1.) Real GDP per caput also grew faster in Kenya and Malawi. But a more striking difference between the two groups of countries is that while real private consumption per caput grew in Kenya and Malawi, it actually declined in Tanzania and Zambia. Not only did real GDP per caput grow more slowly in Tanzania and Zambia, but also government consumption grew more quickly than in Kenya and Malawi. In all four countries, real growth in GDP has been associated with a declining share of agricultural production (see Table 2). But in Kenya and

British location rents: an interpretation of the dual transportation problem for commodity flows

Abstract: The transportation problem is solved for a number of commodity flow matrices for Britain for 1972. The commodities were selected because of the likelihood of the transportation problem producing a relatively good fit. Commodities were also chosen when it was thought that accessibility was a key location factor. The rationalisation of the interpretation of the dual values as shadow prices and location rents is outlined and, after discussing the merits of alternative means of analysing and presenting the dual values, the distribution of these values are compared with the actual location of industry. Some difficulties and further implications of the approach are suggested.

Agricultural self-sufficiency: The recent history of an idea

Abstract: It has been argued that traditional Third World reliance on commodity export production and trade as a means to accumulate savings for development is increasingly perceived as flawed. Post-World War II investment in light manufacturing by Western firms in the Periphery has also been characterized as an inadequate means of capital accumulation. Nationalist and socialist academics and political leaders in the Third World are voicing interest in food agriculture as a mechanism for economic growth; internal demand for food and other basic goods is considered a potentially more lucrative source of savings than international demand for raw materials and foreign investment have proven to be. Political trends in the Core area, exemplified in Left ideologies, and in church and voluntary organizations' strategies for giving, seem to reinforce Third World fostering of food self-sufficiency as a strategy for development. It is important to recall that intellectual trends, even if broadly based, do not necessarily represent or cause social change. The idea of Third World agricultural self-sufficiency is more pervasive than is its implementation. Nevertheless, current speculation about food self-reliance and its dynamic effect on economic growth in Latin America, Asia, and Africa, is new in development theory, and therefore worthy of note. Further study may reveal the depth of present interest in agricultural self-sufficiency and its likely impact on development planning.

Agricultural protectionism and import penetration by developing countries in industrial country markets

Abstract: The industrial countries have been the most important market for most basic agricultural commodity exports. Trade in agricultural products is, however, no longer as important for developing countries as it once was. Manufactured exports have been growing much faster than agricultural exports for some years and the relative importance of agricultural trade has correspondingly declined. For all developing countries the share of agricultural commodity trade in total exports was 50% in 1965 and declined to 26% in 1978. For the low-income, oil-importing developing countries the share has declined from 61% in 1965 to 49% in 1978. Still, for some developing countries--especially those in the low-income category--agricultural exports are still an extremely important part of total trade. Moreover, usually the countries are highly dependent on one export commodity. Following an introduction in Chapter I, Chapter II of this paper considers market penetration of agricultural exports of developing countries in industrial country markets: a) processed agricultural commodities; and b) basic agricultural exports--sugar, beef and veal, tobacco, and fresh vegetables. Chapter III provides the conclusion.

The Role of State Trading in Mineral Commodity Markets

Abstract: The purpose of this paper is to examine the role played by state-trading organization (STDs) in the evolution of international minerals markets. Of particular interest are the implications regarding commodity market structure, market power and price formation. These implications are analysed here through a framework previously developed by the author.1 After a brief description of the framework, the paper addresses its application to state-trading activity in four minerals of major importance to industrialized as well as to developing economies: copper, tin, bauxite, and iron ore.

The agricultural marketing agenda for the eighties

Abstract: The agenda for marketing research in the 1980s, to a great extent, has already been set by the events of the 1970s. Agriculture is in a period of transition in which commodity surpluses are expected to be less of a problem area. International markets are expanding, and the delivery systems have become complex in both structure and in the functions performed. The dynamics of the marketplace obviously influence the research agenda.Before looking at the changing research needs for agricultural marketing, a definition of the concept is needed. For the context of this paper, marketing research is defined to be the process of assimilation and creation of information on the economic performance of potential and existing arrangements that facilitate the assembling, distribution, and consumption of foods, fibers, and ornamentals. (This abstract was borrowed from another version of this item.)

The theory of customs unions: a general survey1

Abstract: Publisher Summary This chapter presents a survey of the development of customs-union theory. In general, the tariff system of any country may discriminate between commodities and/or between countries. Commodity discrimination occurs when different rates of duty are levied on different commodities, while country discrimination occurs when the same commodity is subject to different rates of duty, the rate varying according to the country of origin. The theory of customs unions may be defined as that branch of tariff theory that deals with the effects of geographically discriminatory changes in trade barriers. The theory of customs union has been confined mainly to a study of the effects of customs unions on welfare rather than, for example, on the level of economic activity, the balance of payments, or the rate of inflation. These welfare gains and losses, which are the subject of the theory, may arise from a number of different sources.

Simple Theoretical Analysis of International Commodity Agreements

Abstract: Publisher Summary This chapter presents a simple theoretical analysis of the international commodity agreements. Advocates of international commodity agreements recognize that stabilization of export revenues probably is of much more interest to the developing countries than is stabilization of prices. In principle, a buffer stock authority might buy and sell with the intent of stabilizing revenues. Such an operation would be much more difficult than price stabilization, however, for several reasons. The theoretical considerations presented in the chapter give important insights into the arguments for and against international commodity agreements. They suggest that the developing country producers of the 10 UNCTAD core commodities may be advocating such agreements because the chances of success of producers' cartels for these commodities are not high. They also indicate that normative arguments against international commodity agreements on the grounds of efficiency or social welfare maximization are not well based. Moreover, they imply that whether producers or consumers gain from the international commodity agreements and whether or not there is a tradeoff between the level and instability of producers' revenues cannot be established on the basis of economic theory.

National Policies towards Commodity Exports

Abstract: The purpose of this essay is to analyse the alternative policies which less developed countries might adopt at a national level with regard to their commodity export sectors, in matters closely connected with the attempt to establish a new international economic order (NIEO). The policies in question relate principally to the problem of the instability of primary product exports.

Recent Trends in U.S. Trade and Investment

Abstract: This paper reviews some of the main recent developments in U.S.trade and overseas investment against the background of long-term trends.The United States, and particularly the agricultural sector, has become more linked with the rest of the world. The commodity distributionof trade has moved toward being in large part an exchange of U.S. manufactured goods for other countriest manufactures even though the shareof developed countries in U.S. trade has declined. The fall in the U.S.share of world trade which began around 1950 has slowed down or evenstopped, as has the fall in the terms of trade of the United States andother developed countries.The U.S. share of new direct investment outflows has fallen while that of Japan and Germany have increased, but the United States has become one of the major recipients of direct investment from other countries. U.S. firms have increasingly accepted less than 100 per cent or even majority ownership, but majority ownership is still the usual form,by a large margin, in industries in which technology is important.U.S.-owned affiliates in foreign countries, particularly those in the smaller Asian countries, have shifted their activities towards exporting.In most areas U.S. affiliates increased their exports more in recent years than did other firms in their host countries, thus increasing their share of exports from these countries.

Economic impacts of petroleum shortages and implications for the freight transportation industry

Abstract: The major economic impacts that result from petroleum supply interruptions and the subsequent effects on the demand for freight transportation are described The analysis involved a simulation of the effects of three different levels of fuel supply shortfall on intercity freight transportation The research included the use of three economic and transportation models to simulate the economic impacts of oil shortfalls and the resulting change in freight transportation demand as expressed in tons shipped, ton miles of travel, and fuel use Economic effects are discussed for a base case and then for 7, 14, and 23 percent petroleum shortfalls The demand for freight transportation is determined by the output of various commodity sectors that generate traffic for the truck, rail, water, air, and pipeline modes The effects of various diesel fuel price levels are also examined The analysis suggests that at low, or controlled, fuel prices the more significant impacts for freight movements will be the reduction in output in the bulk commodity sectors, which are dominated by the waterway and rail modes At high fuel prices (ie, equilibrium levels), shipping is significantly decreased in all commodity sectors, but modal shifts are likely to occur from truck to rail and even from rail to water in some corridors (Author)