Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

The Pharmaceutical Industry and World Intellectual Property Standards

Abstract: When I was a high school student during the late 1940s, the first so-called "wonder drugs"-initially penicillin and then the broad-spectrum antibiotics such as tetracycline-were entering the U.S. market. From their profitable experience developing the broadspectrum antibiotics, the leading pharmaceutical companies of America and Europe acquired a strong research orientation that led to a cascade of new therapeutic entities, including additional antiinfectives, vaccines, diuretics, and then other agents to reduce heart attack risks, tranquilizers, antidepressants, birth control pills, anti-fungal agents, immunosuppressants, cortico-steroids, AIDS inhibitors, powerful pain relief agents, and many other agents effective against specific diseases. Thanks to this pharmaceutical revolution, life spans have been prolonged, the incidence and duration of hospital stays have been reduced, and the quality of countless citizens' lives has been enhanced.1 The benefits of modern pharmaceutical therapy have accrued mainly to the citizens of the world's more prosperous nations. United Nations staff have estimated that average purchases per capita of modern pharmaceutical products (excluding traditional medicines) in 1990 (calculated at prevailing exchange rates) in diverse parts of the world were as follows:2 North America $123.90 European Community 102.90 Other Western Europe 85.70 Japan 276.60 South and East Asia 5.00 China 4.80 Latin America 20.30 Sub-Saharan Africa 3.30 A rough extrapolation of these figures reveals that the 73 percent of the world's 1990 population located in south and east Asia, including China, Sub-Saharan Africa, and Latin America, consumes only 16.2 percent of modern pharmaceutical output by dollar volume. One consequence of the inadequate purchasing power that limits such nations' ability to consume pharmaceuticals is a higher rate of morbidity and debility, which in turn impairs the growth of income so that pharmaceuticals can be afforded-a vicious cycle. Nearly all of the research-oriented pharmaceutical companies responsible for innovations in drug therapy have their home bases in the United States, the European Community nations, or Japan, where demand is most intense and highly able scientists interacting with first-rate universities are at hand. Excepting those of Japan, the research-oriented pharmaceutical companies are among the most multinationally oriented enterprises in the world. Discovering a new drug and carrying it through the tests required to obtain marketing approval from regulatory agencies in the United States and Europe costs upwards of $100 million per successful new chemical entity. Once such a large investment has been made, there are powerful incentives to obtain requisite regulatory approvals in other nations and sell the product as widely as possible. Foreign markets are served both by exporting, often from a tax haven such as Puerto Rico, Ireland, or Singapore, and through direct plant investment in consuming nations. According to United Nations estimates, pharmaceutical imports averaged 8.2 percent of domestic consumption during 1989 in developed nations and 19.8 percent in less-developed nations.3 In 1980, approximately 27 percent of the world's d,:mand was satisfied through local production by foreign-owned companies.4 Since then, the extent of multinational operation has increased, in part due to numerous crossborder mergers. In 1995, members of the Pharmaceutical Research and Manufacturers of America trade association recorded prescription drug sales of $65 billion within the United States and $37 billion outside the United States.5 Most of the R&D outlays incurred by pharmaceutical companies are made to discover therapeutically interesting molecules and prove their efficacy and safety through extensive human trials-i.e., to create knowledge that approximates what economists call a pure public good. …

The political economy of infant mortality in São Paulo, Brazil.

Abstract: After the military took power in Brazil in 1964, the government adopted a wide range of policies designed to stimulate economic growth. A central aspect of the Brazilian model of development was the control of wages. From 1964 to 1975 this strategy caused the purchasing power of the minimum wage in the city of Sao Paulo to fall. The decline in the real wage index was associated with a rise in infant mortality during the period. When real wages rose after 1974, the death rate dropped off. The infant mortality trend cannot be explained by other factors that affect the actual or the reported death rate, such as changes in cityward migration, shifts in the distribution of income, and improvements in the quality of vital statistics. The findings of this study indicate a causal relationship between the infant mortality trend and changes in the purchasing power of the urban poor. Additional data on nutrition, changes in household behavior, and shifts in the cause structure of mortality support this conclusion.

Some Political Economy Aspects of Macroeconomic Linkages with Agriculture

Abstract: Though the political process leading to the 1985 farm bill has shunned proposals for significant policy change, commentators on U.S. food and agricultural policy continue to characterize the current policy environment as arriving at a turning point where fundamental realignment of policy is possible. Among the factors indicating a need for change, macroeconomic linkages have been singled out as primary sources of increasing difficulty in agricultural policy management. Implicit in this view is the idea that a heightened importance of macroeconomic factors represents a structural change in long-term patterns of development for the sector that has rendered current policies anachronistic. To advance such an idea is to ignore the historical record. Macroeconomic disturbances and their links to the agriculture sector are central in any historical account of the policy developments leading to direct federal government intervention in the agriculture sector. For example, the organized agricultural interest groups that emerged during the Populist protest of the late nineteenth century were motivated, in part, in response to the monetary restriction associated with the Greenback period and the return to fixed exchange rates under the gold standard in 1879 (Friedman and Schwartz). Continued price deflation into the mid-1890s and real interest rates that are estimated to have averaged 8.5% in the period 1870-89 (Summers, p. 212) proved particularly burdensome to debtridden farmers. The demands of the various farmer movements thus consisted of easy money (or an "elastic currency") created by government action, government funds for farm mortgages, and the subtreasury scheme for creation of government paper money with stored crops as collateral. The discontent voiced by farmers over the macroeconomic policies of the nineteenth century can be associated with later institutional changes that organized the Federal Reserve in 1913 and created the Federal Land Banks in 1916. Agricultural price support through provision of loans against crops was not achieved until 1933 with the creation of the Commodity Credit Corporation (Reiter and Hughes, pp. 1415-16). That policy change, along with other provisions for federal government intervention included in the Agricultural Adjustment Act, followed a farm crisis that had its origins in macroeconomic adjustments after World War I. Exports of agricultural products had expanded rapidly in the United States to supply the wartime needs of Europe. Rapid inflation accompanied the export expansion, and land prices and farm mortgage debt increased. This exacerbated farm sector adjustments when production was restored in Europe and when world liquidity was restricted as U.S. lending to Europe was curtailed. Overcapacity in world primary-product markets persisted and the combination of raw material overproduction and monetary deflation that occurred has been cited as a factor generating the broader economic collapse of the 1930s (Kindleberger, pp. 98-107). Unified political activity by farmers was also intense in the aftermath of World War I. The congressional farm bloc coalition of Republicans and Democrats came into existence in 1921 and sponsored legislation (e.g., the Capper-Volstead Act of 1922 and the Agricultural Credit Acts of 1923) aimed at improving farm conditions through promotion of cooperatives and expansion of credit. However, as the relative purchasing power of farmers continued to decline through the 1920s, the farm lobby organized around the theme of equality for agriculture and demanded more Margaret S. Andrews is a resident fellow, National Center for Food and Agricultural Policy, Resources for the Future; Gordon Rausser is a professor, Department of Agricultdral and Resource Economics, University of California, Berkeley. Giannini Foundation Paper No. 785.

Comprehensive Analysis of Power and Handloom Market Failures and Potential Regrowth Options

Abstract: Millions of individuals in our nation’s rural and urban regions have access to work prospects thanks to the handloom, a traditional industry in India. The handloom business has suffered since modernization. The creations of new technology capitalist rule, a decline in salaries, a rise in the price of yarn, as well as other issues, are the concerns. This current study is mainly textual. The handloom industry has significant marketing related challenges. In selling the fabric to the consumer, intermediaries are important. Due to improper market- ing, the cotton industry has supplanted the handloom industry’s traditional market in India, where it dominates textile manufacturing. This handloom industry needs to develop a comprehensive marketing plan. Our research deals with doing a descriptive analysis of a comparable organization that aspires to conserve Thanjavur’s hand woven legacy. The inquiry would encourage research on the benefits it provided for the weavers and the existing environ- ment, specifically identifying their degree of happiness with their employment in modern society. To gather the basic data, scheduling was employed. To create a preliminary research sample, 75 weavers were selected.

Residential Land Price Changes in Mexican Cities and the Affordability of Land for Low-income Groups

Abstract: This research demonstrates that the price of residential land in Mexico declined significantly in real terms during the 1980s. Land prices appear to follow a cyclical trend which tracks Mexico's macro-economic performance. Data derived from advertised plot prices in newspapers, and from a large sample of household interviews conducted in low-income settlements in three intermediate-sized Mexican cities, suggest that, for the poor, real wage levels are the key determinant of changing affordability. The erosion of real wages has led to some decline in affordability, but this has largely been offset by multiple-earning strategies within households through which purchasing power may be maintained.