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.

Spatial and supply/demand agglomeration economies: State- and industry-linkages in the U.S. food system

Abstract: Cost-impacts of spatial and industrial spillovers on economic performance are evaluated by incorporating activity level measures for nearby states and related industries into a cost function model. We focus on localization and urbanization economies for state level food processing industries, from activity levels of similar industries in neighboring states, agricultural input suppliers, and final product demand. We find significant cost-savings from proximity to other food manufacturing centers, and areas with high purchasing power. Cost savings from locating near an agricultural area are also evident, although it seems costly to be located within a rural agricultural state, implying thin market diseconomies. Marginal production costs instead appear higher in more urban, and lower in more rural, areas. These spillover patterns also have input composition implications; materials demand responses are the most closely tracked by the agglomeration cost effects, and capital and labor impacts vary.

Purchasing Power Disparity before 1914

Abstract: Economic historians’ Divergence debates since 2000 have asked a different question from that asked by Angus Maddison. The issue has become “when did countries’ contemporaneous purchasing powers diverge?”, not “when did countries’ productivity grow at different rates?” The two questions have different answers, especially before 1914. Using pre-1914 prices to compare real purchasing powers on six continents, this article sketches some historical geography of the departures from the conventional Maddison estimates. One underlying reason for the divergence between projections back from 1990 and direct price comparisons from long ago is that before the great 1870-1914 wave of trade globalization, consumer staples were not traded over great distances, and regions specialized in narrow luxury trade. Inter-continental price ratios for subsistence goods thus varied more widely than since 1914. The new measures open up a new economic history of international differences in purchasing power before 1914. Northwest Europe was further ahead of Asian countries than earlier measures have shown. The discrepancy stems from a Gerschenkron effect, magnified before 1914 by Engel effects as well as by Balassa-Samuelson. Yet Northwest Europe was behind America and Australia across the nineteenth century, consistent with the same accounting framework but not with Maddison’s estimates.

The Time Value of Money Concept in Islamic Finance

Abstract: The time value of money is a basic investment concept and a basic element in the conventional theory of finance. The Shari`ah does not rule out this consideration, for it does not prohibit any increment in a loan given to cover the price of a commodity in any sale contract to be paid at a future date. What is prohibited, however, is making money’s time value an element of any lending relationship that considers it to have a predetermined value. Here, the Shari`ah requires that a loan be due in the same currency in which it was given. The value (i.e., purchasing power) of paper currencies varies due to changes in many variables over which the two parties of a loan contract usually have no control. This study examines possible modus operandiof time valuation according to the Shari`ah’s precepts vis-a-vis the concept of money, and whether any value can be attributed to time while considering money’s value. For this purpose, it investigates the juristic views on such relevant issues as the permissibility of difference between a commodity’s cash and credit prices and an increase and reduction of the loan’s amount in return for early repayment.

Breaking even or breaking through : reaching financial sustainability while providing high quality standards in higher education in the Middle East and North Africa

Abstract: Higher education (HE) systems worldwide are faced with three main challenges: providing young people with the skills required by the job market; improving access to high quality services; and seeking out new sources of financing to cope with the growing student demand This document will provide evidence on the need to seek sustainable financing strategies for countries in Middle East and North Africa (MENA), whether they are high income economies, such as the oil producing countries, or low to middle income economies Chapter one presents an overall description of HE graduates and the many challenges they face in their transition into the workforce The different elements that affect this transition are discussed and special attention is given to the mismatches between labor supply and demand Chapter two analyses the current levels of spending on HE, projects the future financing gaps taking into account the need to continue expanding access and improving quality and relevance, and provides a framework for funding approaches linked to meeting access, equity, and quality goals Chapter three outlines ways of using current funds in more effective ways, emphasizing the need to align financing allocations with policy goals Innovative funding allocations that link funding to performance and demand- as well as supply-side mechanisms are discussed Chapter four discusses different ways to diversify sources of funding and presents alternative methods of cost-sharing The chapter emphasizes the equity measures needed for cost-sharing mechanisms, such as student fees, and provides an overview of student loan programs used in MENA and elsewhere Chapter five discusses the role of private provision of HE, and how this can be an alternative to increase access and quality, provided the necessary regulatory and quality controls are in place Chapter six describes an alternative source of funding not yet common in MENA, namely the use of philanthropic resources to build endowments to support HE

Food Prices, Government Subsidies and Fiscal Balances in South Mediterranean Countries

Abstract: Soaring food and energy prices sparked the revolts in Northern African countries at the end of 2010. Despite government subsidies, consumer price inflation rose, which reduced consumers’ purchasing power. This article empirically investigates the impact of world food prices on inflation and government subsidies for Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories and Tunisia during the ten-year period 2002-2011. Our findings show an asymmetry in the response of consumer price inflation to world food price shocks, in that soaring world food prices made inflation rise fast while nominal rigidities prevented inflation from falling. Moreover, this paper shows that government balances deteriorated up to 2% of GDP in 2008 and 2011 due to the incremental government food subsidies while they hardly improved in value terms when world food prices sharply fell in 2009.