STRUCTURAL DEVELOPMENTS IN THE MEXICAN LIVESTOCK SUBSECTOR: THE CASE OF FEEDER CATTLE AND BEEF PRODUCTION

Livestock Production/Industries,

Nonparametric estimation for Levy processes with a view towards mathematical finance

Nonparametric methods for the estimation of the Levy density of a Levy process are developed. Estimators that can be written in terms of the ``jumps'' of the process are introduced, and so are discrete-data based approximations. A model selection approach made up of two steps is investigated. The first step consists in the selection of a good estimator from a linear model of proposed Levy densities, while the second is a data-driven selection of a linear model among a given collection of linear models. By providing lower bounds for the minimax risk of estimation over Besov Levy densities, our estimators are shown to achieve the ``best'' rate of convergence. A numerical study for the case of histogram estimators and for variance Gamma processes, models of key importance in risky asset price modeling driven by Levy processes, is presented.Comment: 68 pages, 19 figures, submitted to Annals of Statistic

DOES HUMAN CAPITAL STIMULATE INVESTMENT IN PHYSICAL CAPITAL? EVIDENCE FROM A COST SYSTEM FRAMEWORK

The direct effect of human capital on economic growth has been widely analysed in the economic literature. This paper, however, focuses on its indirect effect as a stimulus for private investment in physical capital. The methodological framework used is the duality theory, estimating a cost system aggregated with human capital. Empirical evidence is given for Spain for the period 1980-2000. We provide evidence on the indirect effect of human capital in making private capital investment more attractive. Among the main explanations for this process, we observe that higher worker skill levels enable higher returns to be extracted from investment in physical capital.

Explaining the distribution of manufacturing productivity in the EU regions

Regional inequalities in product per capita and labour productivity in the EU are large and persistent. Building on a model in which aggregate increasing returns is the result of the increase in the number of varieties of composite services, under competitive manufactures, we derive a simple and empirically tractable reduced form linking manufacturing productivity growth to the growth of manufacturing output. This specification is used to simulate the equilibrium distribution of labour productivity in the EU regions, that is compared with "virtual" distributions obtained by equalizing, for instance, the amount of returns to scale and the stock of human capital across regions. This way, the impact of some growth determinants on the whole EU regional equilibrium distribution can be assessed.

Regional returns to physical capital: are they conditioned by educational attainment?

This paper provides novel empirical evidence of the indirect effect of educational attainment on regional economic growth, through its influence on the profitability of investment in physical capital. We test the hypothesis that the regional heterogeneity of the return to physical capital can be directly related to the existing heterogeneity in the educational attainment of workers. The results for the Spanish case support our hypothesis that the higher the educational attainment of workers the greater the returns on investment in physical capital. In fact, this effect seems to be sufficiently strong to have counterbalanced the traditional mechanism of decreasing returns to capital accumulation.returns to capital, human capital, productivity, cost system

THE UNCERTAIN FUTURE OF THE MEXICAN MARKET FOR U.S. COTTON: IMPACT OF THE ELIMINATION OF TEXTILE AND CLOTHING QUOTAS

Accounting for about 20% of U.S. total cotton exports in recent years, the Mexican market has become a key destination for U.S. cotton production. Simultaneously, the U.S. market is critical for the Mexican textile/clothing sector absorbing almost 50% of its total output. This strong North American integration process, in part a result of NAFTA, might be jeopardized by the approaching implementation of the Agreement on Textiles and Clothing (ATC) in 2005. This paper presents the results of an econometric and simulation model that allows for the assessment of potential implications of the ATCÂ’s quota elimination on MexicoÂ’s cotton consumption and U.S. cotton exports to Mexico. It incorporates the growing interdependence between the U.S. and MexicoÂ’s cotton and textile industries and summarizes some plausible scenarios for the impact of the 2005 textile and clothing final quota elimination on U.S. markets.International Relations/Trade,

Tango with the Gringo: the hard peg and real misalignment in Argentina

Between 1990 and 2001 the Argentine peso appreciated by 80 percent in real terms, and its overvaluation has been singled out as one of the main suspects in the debate on the causes of the Argentina collapse of late 2001. This paper assesses the degree of real misalignment in Argentina over the Convertibility period using a model in which the equilibrium real exchange rate is defined as the value consistent with (i) a balance of payments position where any current account imbalance is financed by a sustainable flow of international capital (external equilibrium), and (ii) traded/nontraded sector productivity differentials (internal equilibrium). Empirical implementation of the model suggests that the initial real appreciation of the peso, between 1990 and 1993, was consistent with the productivity increases that Argentina enjoyed following the stabilization of the economy after the hyperinflation of the late 1980s. But after 1996 a widening gap opened between the observed real exchange rate and that consistent with a sustainable net foreign asset position. Our estimates indicate that in 2001 the peso was overvalued by over 50 percent. The model allows us to assess how much of the overvaluation resulted from Argentina's inadequate choice of anchor currency and how much from a divergence of fundamentals between the U.S. and Argentina, ultimately due to the maintenance of policies inconsistent with the peg. We find that both factors played a role in the overvaluation accumulated between 1977 and 2001 that preceded the collapse of the Convertibility regime.Fiscal&Monetary Policy,ICT Policy and Strategies,Environmental Economics&Policies,Payment Systems&Infrastructure,Economic Theory&Research,Economic Stabilization,Macroeconomic Management,Economic Theory&Research,Environmental Economics&Policies,Fiscal&Monetary Policy

Dynamic Credit Investment in Partially Observed Markets

We consider the problem of maximizing expected utility for a power investor who can allocate his wealth in a stock, a defaultable security, and a money market account. The dynamics of these security prices are governed by geometric Brownian motions modulated by a hidden continuous time finite state Markov chain. We reduce the partially observed stochastic control problem to a complete observation risk sensitive control problem via the filtered regime switching probabilities. We separate the latter into pre-default and post-default dynamic optimization subproblems, and obtain two coupled Hamilton-Jacobi-Bellman (HJB) partial differential equations. We prove existence and uniqueness of a globally bounded classical solution to each HJB equation, and give the corresponding verification theorem. We provide a numerical analysis showing that the investor increases his holdings in stock as the filter probability of being in high growth regimes increases, and decreases his credit risk exposure when the filter probability of being in high default risk regimes gets larger

Do innovation and human capital explain the productivity gap between small and large firms?

Empirical evidence is compelling that large firms are more productive than small firms. The hypothesis in this paper is that the productivity differences between small and large firms are associated with two of the main determinants of a firm’s performance: the human and technological capital that firms incorporate. We suggest that the contribution of these factors in explaining the size of the productivity gap might not only be due to the fact that large firms make a more extensive use of them, but also because large firms obtain higher returns from their investment in human and technological capital. The evidence we obtain for a comprehensive sample of Spanish manufacturing firms (1990-2002) supports this hypothesis, which has important implications for the effectiveness of policies designed to improve productivity in SMEs by stimulating innovation and the use of more skilled workers.total factor productivity; innovation; skilled labour; firm size.