Showing papers on "Purchasing power published in 2001"

Money: Understanding and Creating Alternatives to Legal Tender

Abstract: Cash. Loot. Scratch. Lucre. Bread. Coin. Scrip. Moolah. Green. We all think we know intuitively what money is, and what it can do for us. Tom Greco, director of the Community Information Resource Center, understands and explains money on an eye-popping, fundamental level. Moreover, he provides a roadmap on how to make alternatives to the "legal tender" work for individuals, communities, and local economies. Money will set your mental gears spinning with fantastic ideas. This book explains the mysteries and realities of money in clear and accessible prose, and reveals the true workings, and alarming fragility, of our existing financial system. It also describes concrete and realistic actions that individuals, businesses, social service agencies, and governments can take to enhance productivity and purchasing power, to protect local economies from the ravages of globalization, and to strengthen the bonds of community. Money is a radical critique of our existing financial system, but also a practical and inspirational how-to manual for creating a vibrant and effective community currency system. You'll learn: * the truth about how money is created, and what it actually represents; * why we're all in debt; * how the financial system is structured to inevitably transfer wealth from the poor to the rich; and * how to start a financial revolution in your local community. A retired professor of business and economics, Tom Greco has spent twenty years studying community currency systems around the world, including historical models (such as during the Great Depression), and the scores of contemporary examples now operating in the United States, Canada, Europe, South America, Australia, New Zealand, and Japan. He helped establish the Tucson Traders currency in Arizona, and he has served as a consultant for many others. No pie-in-the-sky idealist, Greco offers a realistic vision of how healthy local economies can be supplemented with flourishing community currencies. Anyone who works routinely with money needs this book--this means bankers, stockbrokers, merchants, community organizers, loan sharks, gamblers, investors, bank robbers, hedge fund operators, sports agents, and ordinary people.

Can TIPS Help Identify Long-Term Inflation Expectations?

Abstract: Investors and policymakers have long hoped that Treasury Inflation Protected Securities (TIPS) would provide an accurate measure of long-term market inflation expectations. To make informed decisions and to ensure that inflation does not erode the purchasing power of their assets, investors need to assess the rate of inflation expected by other market participants. Having an accurate measure of market inflation expectations can also help policymakers assess their effectiveness in controlling long-term inflation, as well as their credibility among market participants. Until recently, however, the only sources of information about long-term inflation expectations were surveys and the term structure of interest rates, neither of which were considered highly reliable. With the introduction of TIPS in 1997, it was hoped that a new measure of market inflation expectations-the difference in yields between conventional Treasuries and TIPS-would become available. The yield difference between conventional Treasuries and TIPS may provide an accurate measure of market inflation expectations because inflation has very different effects on the returns to the two kinds of securities. The yield on a conventional Treasury must compensate the buyer for any expected erosion in purchasing power due to future inflation. In contrast, the buyer of an inflation protected Treasury need not worry about future inflation because the principal and interest payments are both indexed to inflation. As a result, the yield difference between conventional and inflation protected Treasuries of given maturity should reveal the rate of future inflation expected by market participants. Not everyone agrees, however, that the yield difference provides an accurate measure of expected inflation. Skeptics point out that the yield difference may depend on other factors, such as the liquidity difference between the two kinds of Treasuries, making it difficult to extract information about market inflation expectations. This article examines the empirical evidence on the behavior of the yield difference and the liquidity of the TIPS market. The article finds that the yield difference has not provided a good measure of market inflation expectations because of the large and variable liquidity premium on TIPS. Still, the yield difference may become a better measure of market inflation expectations as liquidity conditions in the two kinds of Treasury markets move closer in the future. The first section of the article explains why the yield difference between conventional Treasuries and TIPS might provide a good measure of market inflation expectations. The second section examines the actual behavior of the yield difference since TIPS were introduced and points out that the yield difference appears to be influenced by factors other than market inflation expectations. The third section investigates the role of market liquidity and concludes that the difference in liquidity between the two types of Treasuries has kept the yield difference from becoming a good measure of expected inflation. The fourth section suggests that the yield difference between conventional and inflation protected Treasuries may approximate market inflation expectations better in the future. I. WHAT ARE YIELD SPREADS AND MIGHT THEY TRACK MARKET INFLATION EXPECTATIONS? As TIPS are relatively new to many investors, this section briefly describes their main features. The section then examines the different components of the yield difference, or spread, between conventional and inflation protected Treasuries. The section shows that the expected rate of future inflation is the main component of the yield spread. The section also shows, however, that other components, such as the inflation risk premium and the liquidity premium may also be important, complicating the task of extracting information about market inflation expectations. What are TIPS? Since 1997, the U. …

The privatization of education in Argentina

Abstract: This paper intends to analyse the empirical and historical evidence, gathered by recent research, on the privatization process of the argentine educational system. In the 1960s, two main changes occurred: an increase in the private sector enrolment and an increasing deregulation of private schools along with a hyper-regulation of public schools. Additionally, a significant mutation of the demand profile served by the private and public sector can be observed. Such a mutation is closely related to the socio-economic characteristics of the families sending their children to either sector. The article suggests that the process of privatization of the argentine education meant a switch from a state quasi-monopoly system to a dual public/private system, where the social sectors with higher purchasing power are able to choose to ‘exit’ from the public sector to the private and, by doing so, consolidating an educational environment of their own.

The price of cigarettes in the European Union

Abstract: BACKGROUND—A major factor influencing tobacco use is its price. Fiscal policies on tobacco are a key ingredient of any comprehensive control strategy, as they can be used to raise prices. The European Union (EU) developed directives to ensure some harmonisation of the fiscal pressure on tobacco across its member states. OBJECTIVES—To provide a simple comparison of tobacco prices in the EU, adjusting for the purchasing power of each currency. DESIGN—For price comparisons, a 20 units pack of Marlboro was the reference product, and data refer to April 2000. Purchasing power parities (PPP) for each member state currency have been compiled. These are currency conversion rates, which convert to a common currency and equalise the purchasing power of different currencies. MAIN OUTCOME MEASURES—Nominal prices of a Marlboro pack for each member state, and a price index, estimated taking as reference the EU mean. Adjusted prices and an adjusted price index have been estimated using PPP. RESULTS—Nominal prices show wide variation, with the cheapest pack in Portugal (59) and the most expensive in the UK (196); the range of variation is three-fold. However, PPP adjusted prices reveal a different distribution. In three countries adjusted prices are outliers, but all other countries make two clusters, one around the average EU index of 100, the other around a lower value of 85. CONCLUSIONS—These results suggest that fiscal harmonisation policies in the EU do not have an even effect at reducing availability by its impact in price. Keywords: cigarette price; fiscal policy; health policy; European Union.

TIPS as an Asset Class

Abstract: In the design of investment portfolios, the authors maintain that Treasury Inflation Protection Securities should be evaluated as a separate and distinct asset class. These securities have unique characteristics that are not directly available through other investment vehicles. Their most significant benefit lies in the fact that they provide a direct hedge against one specific measure of inflation (i.e., the non-seasonally adjusted Consumer Price Index for all urban consumers, which allows investors to maintain real purchasing power and hedge against future nominal increases in the overall domestic price level. TIPS may also appeal to a broader audience by virtue of their relatively low correlation with other traditional asset classes. The authors demonstrate that TIPS offer potentially significant diversification benefits, establishing them as a viable asset class in a long-term asset allocation policy.

The Internet and Financial Market Structure

Abstract: Financial markets provide for trade in information because money is just a means of scorekeeping, a way of tallying the relative purchasing power of individuals and organizations. It can be a physical tally such as a coin made from rare metals or a paper claim on a government or other reputable agent that is difficult to counterfeit. But records of relative purchasing power also can be stored digitally as strings of ones and zeros if the storage medium is secure. Information generally is costly to produce but not to reproduce. In fact, information is perhaps too easy to reproduce once it is revealed, it is difficult to exclude others from further use of information. When the value of information mainly is strategic, as often is the case in financial markets, information producers have incentive to protect their investment by holding their cards close to the vest. But doing so obstructs trade and undermines the social interest in informationally efficient markets. Financial intermediaries promote trade in financial markets by balancing the tension between self interest and collective interests in information. Financial intermediaries endure a similar tension in their dealings w ith one another. Competition among intermediaries traditionally was fueled by the human capital of key families and individuals Morgan, Rothschild, Goldman, etc. whose names still dominate the financial landscape. Primitive information technology led early financial intermediaries to form information networks by scattering human repositories for information as widely as possible. 1 Fair dealing over time within the network led to strong relationships bound by trust through which information moved about more freely than it would have otherwise. Reputations and relationships, the foundations for trust, likewise are composites of information but information that is not so easily disembodied from its originator you can't buy a reputation. Innovation flourished in the context of close relationships and powerful intermediaries that tempered competition and thereby protected easily copied ideas and products assuring at least a fair return on investment. The internet upsets this delicate balance. We may look back on the internet as having punctuated the evolution of financial market, but its effect will most likely be interpreted as different in degree not in kind from the effects of motorized transportation, the telegraph and telephone, low-cost computers, etc. The internet is just another technological advance along a path where human capital is being transformed and in some instances displaced by information technology that codifies what previously was embodied in human intermediaries. The tension between human capital and information technology, however, has profound consequences for the organization and management of intermediary firms. The small family partnerships that dominated early financial markets provided an environment in which human capital was nurtured and passed from one generation to the next. By contrast, the modern financial firm depends far more on financial capital to support the large-scale but low margin operations that remain when intermediary functions are codified.

The Role of the Safety Net and the Labor Market on Falling Cash Consumption in Russia: 1994–96 A Quintile‐Based Decomposition Analysis

Abstract: This paper investigates the relative importance of changes in social safety net support and labor market in explaining the decline in the purchasing power of Russian households that occurred during the period 1994–96. Drawing on three cross-sections of the Russian Longitudinal Monitoring Survey, we find that labor market changes have been the main cause of the observed decline in cash consumption. Among these changes, reductions in the impact of the time spent in employment and increasing frequency of wage arrears are most important, more so than increases in open unemployment or the fall in real wages among workers who were fully paid. The contribution of falling state transfers to cash consumption is nonetheless substantial. We also find that the sources of the decline in household welfare vary substantially across quintiles in the distribution.

Inflation Dynamics in Madagascar, 1971-2000

Abstract: The paper analyzes the dynamics of inflation in Madagascar in the period 1971-2000, applying cointegration analysis and error correction modeling. The empirical results, based on quarterly data, confirm that there exists a stable money demand relationship, as well as a purchasing power relationship in the long run. The former enters the short-run dynamics of inflation and money growth, while the latter affects the short-run dynamics of the exchange rate only. We also find that an appreciation has a direct negative impact on inflation and that inflation inertia is important. In addition, we conduct FIML estimation of the system and trace the impulse responses to various shocks.

Economic Development in OECD Countries during the 20th Century

Abstract: We present an analysis of economic growth and cycles in main EU, USA, Japan and other OECD countries during the period 1900-1997, and more detailed data and analysis of main economic aggregates for 25 OECD countries during the period 1964-94, including comparisons of Private and Public Consumption, Investment, External Trade and Population. The economic comparisons have into account both exchange rates and purchasing power parities. Some important aspects of demand and supply are analysed in relation with their influence both on economic growth and cycles. We use exponential rates of growth which are interesting for seeing the important influence that moderation of fertility rates have had in the increase of real GDP by inhabitant in OECD countries in comparison with other areas of the World. OECD countries have been generally advanced in education development and that has been one of the more important factors that explain their good performance during the first and second half of 20th century.

Debt Laffer Curve for South Asian Countries

Abstract: The inflow of foreign capital is generally seen as an accelerating force to economic growth, due to provision of additional resources, and these funds are considered complementary to local savings. It could also help to transfer technology and, therefore, increase productivity. Besides it enhances purchasing power of the recipients [Mullick (1988)] and as a result stimulates growth. The purpose of foreign debt is to increase real transfer of resources from the developed countries to the developing countries, so that these countries could pick up momentum of economic growth and as a result improve their welfare.1 The rapid increase in the external debt obligations of the developing countries, during the 1970s, had given rise to concerns about the dangers of increasing trend in interest and amortisation payments and, therefore, this situation posed a threat to debtor countries. The foreign debt of the developing countries has become a threat to their economic growth. The debt servicing of some of the LDC’s exceeded to their growth rates.2 Initially, most analysts believed that debt servicing problem would be temporary. It was hoped that creditworthiness and more normal growth of most of the countries would be restored with the influx of foreign resources. However, the debt crises have demonstrated that this assessment was optimistic and seemed never to be realised.3

Money, Wages, and Real Incomes in the Age of Erasmus: The Purchasing Power of Coins and of Building Craftsmen's Wages in England and the Low Countries, 1500 - 1540

Abstract: This comparative study of money, coinages, prices, and wages in southern England and the southern Low Countries had its origins in a series of appendices and footnotes for the first twelve volumes of the Correspondence of Erasmus (1484-1527), part of the Collected Works of Erasmus, which the University of Toronto Press has been publishing since 1974. The questions first put to me were: can we identify and evaluate the various silver and gold coins that appear in Erasmus's correspondence, and references to his travels over an arc running from England, the Habsburg Netherlands, France, the Rhineland, Switzerland, and Italy? What were these coins in terms of their precious metal contents and exchange rates, with each other, and in relation to the moneys of account of England, France, and the Low Countries? The more economically interesting questions that developed were: (1) What was the purchasing power of these various coins in terms of everyday commodities? (2) What was the real value of the various benefices and stipends that Erasmus received from his benefactors: was he really so ill-paid, as he frequently intimated? (3) How would his 'standard of living' compare with that of skilled master craftsmen -- a mason or carpenter in Oxford and in Antwerp of this era - at least in terms of the purchasing powers of their money incomes? This study covers the Golden Age of Erasmus (1466-1536) in the first four decades of the sixteenth century, an era that also marked the onset of the famous Price Revolution, perhaps the most significant inflationary era in European economic history. It commences with an analysis of the original sources for the price and wage data utilized in this study, and the problem of 'wage stickiness', so that real wages were essentially a function of changes in the price level (rather than in the MRP of the craftsmen). The next part analyses the nature of relative price changes and of inflation during the first decades of the Price Revolution era, discussing the role of both demographic and monetary changes, but offering essentially a monetary explanation of that inflation. Then follows detailed analyses of the actual changes in the gold and silver coinages of England, France, and the Habsburg Netherlands from 1500 to 1540; changes in the coined money supplies and changes in credit, with the origins of a genuine financial revolution in the early 16th-century Netherlands. The rest of this paper focusses on the purchasing power of both coins and of building craftsmen's wages in England and the southern Netherlands over this four-decade period, in terms of the following commodities: wine, butter, beef, herrings, cod fish, eggs, wheat, peas, loaf sugar, paper, tallow candles, woollen, worsted, and linen textiles. For both regions, various estimates of these craftsmen's real wages and real incomes are made: in terms of these commodities and of a more broadly based 'basket of consumables'; and of the price indices derived from them for Brabant (Van der Wee) and England (Phelps Brown and Hopkins, as amended by my own research on their working papers in the LSE Archives). The comparative purchasing power of these wages is made for similar commodities in each region, estimating for which the English craftsmen was the gainer or loser in relation to his counterparts in the Antwerp-Lier-Brussels region. If English craftsmen, suffering a greater degree of wage-stickiness, thus suffered a greater fall in real incomes with the onset of the Price Revolution, they were not necessarily worse off in absolute terms by the late 1530s. The final table 17 compares their incomes with those of Erasmus, in terms of references to his various stipends and benefices mentioned in his correspondence for the year 1526, a tabulation that is far from complete. But that tabulation indicates that these incomes -- when Erasmus had been a Professor of Greek and Divinity at Cambridge -- amounted to the annual wage incomes for 82 Antwerp master masons and carpenters or 93 Oxford masons/carpenters. Today senior professors at the University of Toronto earn about 2.5 times the annual wage incomes of master carpenters. A very golden age for Erasmus indeed.

Coverage and Targetting in the Indonesian Social Safety Net Programmes

Abstract: I. Introduction The Government of Indonesia established a series of new and expanded programmes in early 1998 to mitigate the adverse social impacts of the economic crisis which began in mid-1997.(1) These programmes are widely known as the Social Safety Net or JPS programmes, an acronym of its Indonesian name, Jaring Pengaman Sosial. The programmes are intended to help protect the traditionally poor and the newly poor suffering from the crisis in three ways: ensuring the availability of food at affordable prices for the poor, supplementing purchasing power among poor households through employment creation, and preserving the access of the poor to critical social services such as health and education. Loans provided by the World Bank, the Asian Development Bank, and bilateral donors (both directly through project support, and indirectly through programme loans which provide budget support) were the main sources of funding for the expansion of these various social safety net programmes. The disbursement of these funds accumulates into Indonesia's foreign national debt, which has increased rapidly since the crisis. Insofar as these funds contribute to raising the national debt, and would eventually have to be repaid, the need to ensure that these programmes are effective, efficient, and meet their stated objectives is further strengthened. This study is a preliminary evaluation of how effective the JPS programmes have been in reaching the poor and the needy. This is done by assessing firstly, coverage of the programmes among the poor, and secondly, the distribution of benefits of the programmes between the poor and the non-poor. The rest of the article is organized as follows. Section II briefly explains the source of the data for this study, and the method used in evaluating the effectiveness of the programmes. Section III discusses the main findings of this study, namely the coverage of the programmes and the effectiveness of their targetting (how much of the benefits are going to the poor). Section IV summarizes these findings and compares relative performances across districts. Finally, Section V concludes. II. Data and Methods Data: 100 Village Survey The data used in the analysis in this study were collected through the December 1998 round of the 100 Village Survey (Survei Seratus Desa or SSD) by the Statistics Indonesia (Badan Pusat Statistik or BPS). Data were collected from 12,000 households in December 1998. The survey, which was sponsored by the United Nations Children's Fund (UNICEF) and carded out by BPS, covered 100 villages (desa) located in ten districts (kabupaten) and spread across eigth provinces.(2) The SSD sample, while quite large, was not designed to be statistically representative of the country. The 100 villages were geographically quite concentrated, located in only ten of the country's over 300 districts. The survey areas were chosen in 1994, based on a purposive sampling approach to capture various types of villages that were "representative" of various parts of the rural economy. Since the survey areas were chosen before the crisis, there would be no reason to suggest the sampling was influenced by the crisis. On the other hand, this survey was meant to focus on rural and relatively poor areas, so it is clearly not representative of the entire country. It is also difficult to determine how representative it is of the changes caused by the recent economic crisis.(3) For this reason we focus on the district-by-district analysis. As a consequence, it would be necessary to note that the conclusions reached are valid only for this sample. Methods: Programme Coverage and Targetting The social safety net programmes are intended to help the traditional poor -- and the newly poor suffering from the economic crisis -- in coping with the impacts of the crisis. It is hoped that through the implementation of various social safety net programmes, the worst effects of the crisis such as widespread hunger, poverty, unemployment, increased school drop-out rates, and malnutrition could be prevented, or at least reduced. …

Markets and Power: The 21st Century Command Economy

Abstract: List of Tables and Figures Chapter 1: Introduction Chapter 2: Power and Economics Chapter 3: Business Power I - Monopoly Chapter 4: Business Power II - Networks and Finance Chapter 5: Employer Power Chapter 6: Purchasing Power Chapter 7: Conclusion Bibliography Index About the Author

Money and Inflation

Abstract: It is a popular notion that money and output are separate and autonomous entities. Money and Inflation argues that this idea can neither explain the purchasing power of money nor its variations over time, and a new theory is therefore presented in its place.

The Dairy Sector in the Central European Candidate (CEC) Countries - The Status of Restructuring and Future Challenges -

Abstract: The dairy sector in the CEC countries had to cope with tremendous adjustment pressures in the 90ies. Privatization and liberalization contributed to intense competition on the CEC countries' dairy mar- ket. Major problems that impede the competitiveness of this sector are a considerable fragmentation of the dairy processing industry, pronounced excess capacities, high seasonality of milk production and low investment activities. The latter delays the modernization of processing technologies and thus hinders quality improvements and the adjustments of hygienic conditions as well as product and process standards to EU norms. These problems are common to all CEC countries, though to different degrees. In addition, especially in Bulgaria and Romania, but also in Poland, Lithuania and Latvia the dairy industry is burdened by the low quality of the raw material and high milk collecting costs. Improving technical as well as economic efficiency in the primary and processing sector and seeking strate- gic alliances are necessary to secure the competitiveness of the CEC countriesdairy industry in EU and world markets. price subsidies, decline in real purchasing power of the population, privatization and restructuring in the primary, processing and distribution sector as well as the liberaliza- tion of trade led to very difficult times for the dairy industry far into the second half of the 90ies. Only during recent years some stability began to show up for this industry. However, at present the sector seems to be confronted with even greater challenges, since the aspired membership in the EU requires the implementation and enforcement of the acquis communautaire. In addition, the dairy sectors in the CEC countries have to be able to compete with producers in the present member countries. Given this state of transition of the dairy sector the aim of the paper is threefold. Firstly, for the CEC countries a brief overview with respect to the restructuring process and its main driving forces in the dairy industry will be provided. This includes a discussion of the forms and procedures used in privatizing this sector as well as an analysis of agricul- tural policy reforms and changes taking place in input and consumer markets. Secondly, based on the present state of restructuring competition within and competitiveness of the dairy sector will be analysed using the economic theory of industrial organization. This will cover issues such as own- ership and market structure, vertical integration as well as quantitative and qualitative performance indicators includ- ing productivity and profit measures, the level of capacity utilization and market shares. A discussion of the impor- tance of foreign direct investment (FDI) for the industry's development is going to complement this part of the analy- sis. Thirdly, based on the results obtained, the study identi- fies those economic conditions that impede competitiveness and discusses adjustments in the private and policy arena necessary to reach global competitiveness. For the analysis, the dairy sector has been selected be- cause it plays a decisive role in the CEC countries in food industry output and employment 2 ). In addition, the restruc- turing process has been especially pronounced in this sec- tor. Finally, it is probably the area in the agriculture and food arena that faces in most of the CEC countries the greatest pressure towards adjustments prior to accession.

Policy response to poverty and inequality in the developing world: where should the priorities lie?

Abstract: By the most common measuring rods for economic progress (per capita income or purchasing power, satisfaction of basic needs) there has been a striking decline in the incidence of poverty in the Third World, and hence in the world as a whole, over the past half century for which fairly adequate data are available. With a constant poverty line of 20

Personal Saving and Social Security in Italy: Fresh Evidence from a Time Series Analysis

Abstract: The paper provides an econometric analysis of the aggregate saving function of Italian households in the vein of the life cycle theory. Results from an ECM representation based on yearly data for 1951-1998 point to depressive effects on private consumption of recent reforms of social security, actual and expected for next few years. In order to compensate for both reductions in actual pension payments and increased uncertainty about their future claims, households stepped up accumulation of real and financial assets since the beginning of the nineties. First estimates of capital gains do not show a significant impact on consumption demand, in the short and in the long period: their high volatility has likely hindered a fair assessment of their contribution to personal purchasing power on the part of households. Demographic changes, while in the long run not seemingly determined in conjunction with the economic variables we consider, turn out to play a significant role in the evolution of consumption demand.

Wage Restraint, Employment, and the Legacy of the General Theory’s Chapter 19

Abstract: The role of wages in the determination of aggregate employment remains one of the most hotly debated public policy issues in many European countries, and in Germany in particular. This is not surprising in view of the high-profile collective bargaining process in which organized labor and emloyers negotiate over wages under conditions of persistent high unemployment. Of course, neither side wishes to be seen as merely pursuing its narrow self-interest. Both employers and unions make every effort to argue as convincingly as possible that their respective bargaining positions are conducive to employment growth and macroeconomic stability. Employers invoke neoclassical labor market theory to reject any demands for wage increases in excess of labor productivity growth. Such wage increases, they argue, mean rising labor costs and hence cause job losses. Unions, in contrast, emphasize demand-side repercussions and appeal to the Keynesian notion of the circular flow of income. They maintain that any attempt to boost employment through wage restraint is doomed to fail, mainly because this would reduce the purchasing power of consumers and thus domestic demand. Accordingly, they tend to put the blame for high unemployment on misguided fiscal and monetary policies. In contrast, the mainstream consensus regards the longer-term trends of output and employment as supply-determined and, therefore, rejects demand-side explanations of unemployment, except for the very short-run cyclical movements.

Wages and Structural Adjustment in the New German States

Abstract: Rarely have modern labor markets witnessed wage increases so rapid as in Eastern Germany following the events of November 1989. In the first five years after the unification, nominal wages rose by more than 200 percent and doubled in purchasing power. Measured in terms of the output that labor is used to produce, wages rose by almost 350 percent. Substantial disagreement continues to characterize the discussion of the effects of high wages in the five new German states. On the one hand, the Bundesbank, the Sachverst andigenrat (Council of Economic Advisors), and major economic research institutes have argued that moderate wage settlements would have been essential for accelerating the process of structural change. According to this position, steep wage increases retarded the retooling of the eastern German economy. Trade unions, in contrast, have replied that high wages were necessary precisely to guarantee that the forces of structural change were brought to bear on industry and to promote investment in skills.

Creating and Expanding Trade Partnerships Within the Chicago Metropolitan Area: Applications Using a Miyazawa Accounting System

Abstract: Consider the following scenario; a business news report highlights the discovery of a new country in which wage and salary income amounts to slightly less than $10 billion. This country has escaped notice by entrepreneurs since very little was known about it — including its location. In addition, the news report continues that a second country with purchasing power exceeding $8 billion has been found close by. How could this be possible in an age of globalization, internet, and rapid diffusion of information? The cause for these countries being overlooked is due, in part, to lack of information about their location but the greater problem is due to casual dismissal of the size of their markets — based on little or no information.

Categories of Time Use for Forensic Economics

Abstract: There is an old saying that “Time is money.” The meaning of this saying is that time can be sold if you have a valuable service to provide, such that wasting time is wasting the opportunity to make money. Time, as such, is the ultimate scarce resource in life. It is the scarcity of time that gives it value. None of us has as much of it as we would like, though perhaps none of us would really like to have an infinite amount of time available. However, time is not really equivalent to money in several very important senses. Of greatest importance to forensic economists, not all time is equal in value—unlike money, which has constant purchasing power, at least within short time frames. The reasons why all time is not of equal value are based on three factors: energy, scheduling constraints and investment in human capital. (1) When an individual has high energy, time is more valuable than time when an individual is tired and has less energy (Ireland, 1982). (2) Time when an individual is under no specific scheduling constraints may be more valuable than time that is subject to precise scheduling constraints (Caragonne, 1997). If a forensic economist arrives at an attorney’s office 15 minutes before an appointment, that extra 15 minutes might or might not have as much value as 15 minutes on a Sunday afternoon with no scheduling pressure (Mason and Fabritius, 1997). (3) Time spent improving one’s own human capital can increase the value of time in the future relative to time in the present (Becker, 1993). Another general difference between time and money is that time must be spent to maintain the value of time. One of the most important uses of time is for sleep. An individual who sleeps eight hours a night spends one-third of his or her life sleeping. Time spent sleeping is needed to maintain the energy and health that makes waking time more valuable. Likewise, time spent on exercise and other health-producing activities such as seeing physicians and dentists and even on relaxation activities may be necessary to maintain the value of other time spent on labor-market activities, non-market services, human capital investments, or true leisure activities. One can think of such uses of time as maintenance activities necessary to maintain the optimum value of time during an individual’s lifetime. The “whole-time” concept in forensic economics deals with the valuation of lost time due to a tortious action. This concept is generally relevant in personal

Spatial and supply/demand agglomeration economies: an evaluation of state-and-industry-linkages in the u.s. food system

Abstract: Author(s): Cohen, Jeffrey P.; Morrison Paul, Catherine J. | Abstract: In this paper we postulate, measure, and evaluate the importance of cost-impacts from spatial and industrial spillovers for analysis of economic performance. To accomplish this, we incorporate measures of "activity levels" of related states and industries in a cost function model, and estimate their associated thick market and agglomeration effects in terms of shadow values and elasticities. We focus on the food processing sector, the proximity of own-industry activity in neighboring states, and the supply- and demand- side "drivers", associated with urbanization and localization economies (represented by the GSP and agricultural intensity in the own and neighboring states). We find significant cost-savings benefits to a states' food processing sector of being close to other food manufacturing centers (high levels of food processing activity in neighboring states). We also find it beneficial to be in a state with high purchasing power (demand), and to have neighboring states that are agriculture-based (supply). However, it also seems costly to actually be located in a heavily agricultural or rural state, possibly due to diseconomies from "thin markets" associated with infrastructure support and labor markets.

Currency Portfolios and Currency Exchange in a Search Economy

Abstract: We develop a dual currency search model to study equilibrium currency exchange and the determination of nominal exchange rates. Agents hold portfolios consisting of two distinct currencies. We study equilibria in which the two currencies are identical and equilibria in which the two currencies differ according to their relative purchasing power risk. We use numerical methods to solve for the steady-state distributions of currency portfolios, nominal exchange rates and value functions. When one of the currencies is 'risky', equilibria exist in which the safe currency trades for multiple units of the risky currency with the observed ratio being the nominal exchange rate. However, due to the decentralized trading environment, we obtain a steady state distribution of nominal exchange rates. The mean and variance of the nominal exchange rate distribution are based on the fundamentals of the model and change in predictable ways when the fundamentals change.

Accessibility of Aquaculture Products in Thailand

Abstract: The paper first reviews the aquaculture sector in Thailand and focuses on the development of freshwater fish. The government has promoted freshwater fish culture mainly to supply domestically. The development policies that influence markets and access have been stated. It then highlights fish consumption by region. As a result of increased demand for freshwater fish, marketing plays an increasing vital role and is left in the hand of private sector. Marketing practices including market structure, marketing channel and marketing margins are analyzed and discussed. It is found that the private assembly markets as well as the retail outlets have been developed significantly to serve the increase in both the supply and the demand of cultured freshwater fish. Marketing margin varies among species. Obstacles to market a ccess is not observed apparently. The shift in production centers close to the big consuming center with high purchasing power in the past two decades may benefit some group of consumer. However, the consumer in other regions can access to freshwater fish through the effective and efficient marketing system. The paper concludes with the discussion and analyzes of future domestic market potential in view of existing and evolving consumption pattern and marketing development, and measures required to realize the potential.

Inflation Dynamics in Madagascar, 1971-2000

Abstract: The paper analyzes the dynamics of inflation in Madagascar in the period 1971-2000, applying cointegration analysis and error correction modeling. The empirical results, based on quarterly data, confirm that there exists a stable money demand relationship, as well as a purchasing power relationship in the long run. The former enters the short-run dynamics of inflation and money growth, while the latter affects the short-run dynamics of the exchange rate only. We also find that an appreciation has a direct negative impact on inflation and that inflation inertia is important. In addition, we conduct FIML estimation of the system and trace the impulse responses to various shocks.

SMEs Contribution to the Creation of the Euro-Mediterranean Region

Abstract: The paper focuses on the manufacturing sector of 10 Mediterranean Partners, in particular on the industrial structures and their relationship with the market. The Euro-Mediterranean Partnership, and in particular the project of the free trade area, is placing the North-South relationship in a new context. Several studies have demonstrated that the liberalization of the regional markets and increasing competition from European imports will have dramatic effects on the Mediterranean partner countries at both the macro and the micro levels. At the same time, export opportunities and technological spillovers from the forecasted increase in foreign investments can contribute to the upgrading of the Southern Mediterranean production systems, but this depends upon both the type of learning capability and the structure of the Southern Mediterranean countries production system. More than 90% of the total industrial units are family businesses concentrated in traditional sectors utilizing low technology equipment, and supplying to the local markets. They are facing a shrinking purchasing power with changing patterns of consumption. Industrial modernization and export-oriented strategies can have an effect only on a particular type of SME while excluding the majority of the enterprises. The features of the local markets show that development strategies should take increasingly into account the structural characteristics of the production systems and of the markets in which they are embedded.

International comparative studies on monetary purchasing power indices in the era of knowledge economy

Abstract: With the help of emergy theories, this paper uses the emergy/dollar ratio to measure the purchasing power of dollar in China and compares it with with that of the United States and other slected countries. The results show that Chinese emergy/dollar ratio is much higher than that of the U.S., Japan and the average ratio of the world, leading to much emergy wealth loss in the process of international trading and loaning. In order to meet the challenge of economic globalization, China should speed up cycling of Chinese currency, increase more currency in the process of economic development, and make active financial policy.

Merchants in the temple?, the implications of the GATS and NAFTA for Canada's health care system

Abstract: "My temple should be a house of prayer, But you have made it a den of thieves. Get out! Get out!" (Lyrics from Jesus Christ Superstar) Introduction Canada's publicly funded health care system, "Medicare," is the country's most cherished social program. It is a near-sacred institution, comparable to the temple in the New Testament story from which Jesus drove the merchants who had set up shop. Many believe that international trade agreements threaten to flood Canada's sacred institution with unwanted merchants of its own in the form of foreign for-profit investors. (1) They fear that these agreements will force Canada to open its health care system to entry by foreign service providers and insurers, causing a slide into a US-style system of health care driven by for-profit providers and insurers. (2) A contrasting view has been presented by the federal government, which has assured the public that international trade agreements pose no threat to the integrity and sustainability of Medicare. (3) The two trade agreements that have received the most critical attention are the North American Free Trade Agreement (NAFTA) and the General Agreement on Trade in Services (GATS). The NAFTA is an agreement implemented in 1994 between the federal governments of Canada, the US and Mexico that aims to create a free trade area between the territories of the three countries. The GATS is an agreement for liberalization of trade in services implemented in 1994 that imposes rules on all member countries of the World Trade Organization (WTO). In this article, I provide a brief overview of the implications of the NAFTA and GATS for Medicare with the objective of determining the reality behind the contrasting views discussed above. (4) I will do so by examining: * The values underpinning international trade agreements; * Key characteristics of Canada's health care system; and * The key provisions and potential implications of the NAFTA and GATS for Canada's health care system. International Trade Agreements and Health Care--Conflicting Values? The key objective of most international trade agreements, including the NAFTA and GATS, is trade liberalization through the reduction of barriers to trade. The rationale is that trade unhindered by government interference will result in the best allocation of scarce resources, and improved economic growth and welfare. The success of trade liberalization is largely dependent on the presence of an open market within each of the trading partners. In an open market, goods and services are allocated on the basis of purchasing power and there is no concern with equity of distribution. On its face therefore, trade liberalization is incompatible with the goals of the Canadian health care system where the free market gives way to high levels of government intervention in order to achieve goals of distributive justice. Canada's Health Care System Before looking at the provisions of the NAFTA and GATS, it is essential to understand the fundamental nature of Canada's health care system. Medicare is sacred to Canadians because it seeks to achieve goals of distributive justice, that is, the provision of health care services to all based on need regardless of the ability to pay. Yet, while popularly described as a "single-payer public system," Canada's health care system is in fact characterized by a wide range of public/private relationships. At the core of the system, "medically necessary" hospital and "medically required" physician services are fully publicly funded. Outside of this core, a number of increasingly important services are not fully publicly funded, including prescription drugs used outside of hospitals, home care, alternative care (e.g., services provided by chiropractors, homeopaths, naturopaths), dental care and some vision care. While provincial governments provide some of these service (e.g., through publicly funded home care programs), people often have to buy private insurance or pay out of their own pocket for these services. …