Agricultural markets and risks - management of the latter, not the former

The authors review the historical relationship between the work of applied economists, and policymakers, and the institutions that came to characterize the commodity, and risk markets of the 1980s. These institutions were a response to the harmful consequences of commodity market volatility, and declining terms of trade. But the chosen policies, and instruments relied on market interventions, to directly affect prices, or the distribution of prices in domestic, and international markets. For practical, and more fundamental reasons, this approach failed. The authors next discuss how a growing body of work, contributed to a change in thinking that moved policy away from stabilization goals, toward policies that emphasized the management of risks. They distinguish between the macroeconomic effects of volatile commodity markets, and the consequences for businesses, and households. The authors argue that both sets of problems remain important development issues, but that appropriate policy instruments are largely separate. Nonetheless, because governments, households, and firms must all respond to a wide range of sources of risk, they emphasize the role for an integrated policy by government. Increasingly, alternative approaches have come to rely on market-based instruments. Such approaches accept the market view of relative prices as immutable, but address directly the negative consequences of volatility. As traditional risk markets (such as futures and insurance markets) expand, and new parametric markets emerge, the practicality of applying market-based instruments to traditional risk, and development problems increases. The authors show the change in approaches to risk, and the reliance on old, and new market instruments, with new, and sometimes experimental programs, with special emphasis on programs at the World Bank.Labor Policies,Payment Systems&Infrastructure,Health Economics&Finance,Environmental Economics&Policies,Insurance&Risk Mitigation,Environmental Economics&Policies,Insurance&Risk Mitigation,Health Economics&Finance,Banks&Banking Reform,Financial Intermediation

Generalized mathematical models in design optimization

The theory of optimality conditions of extremal problems can be extended to problems continuously deformed by an input vector. The connection between the sensitivity, well-posedness, stability and approximation of optimization problems is steadily emerging. The authors believe that the important realization here is that the underlying basis of all such work is still the study of point-to-set maps and of small perturbations, yet what has been identified previously as being just related to solution procedures is now being extended to study modeling itself in its own right. Many important studies related to the theoretical issues of parametric programming and large deformation in nonlinear programming have been reported in the last few years, and the challenge now seems to be in devising effective computational tools for solving these generalized design optimization models

How policy changes affected cocoa sectors in sub-Saharan African countries

Structural adjustment programs in sub-Saharan African countries in the 1980s removed trade restrictions, price controls, and export taxes and abolished state-owned commodity marketing bodies. The authors studied the effects of these policy changes on the coca sector, using a global econometric model specifying major producer countries through the vintage-capital approach. They focused on Ghana and Nigeria (major cocoa producers that undertook structural adjustment programs), as well as on Cote d'Ivoire and Cameroon. The impact on world cocoa prices of structural adjustment programs in Ghana and Nigeria was relatively small. The results imply that, without structural adjustment programs in Ghana and Nigeria, world cocoa prices in the late 1980s would have been about US$1,060/ton (in 1985 constant dollars), instead of US$850/ton. So, without the structural adjustment programs, 1989-90 world prices in real terms would have been about 45 percent lower than they were in the early 1980s, compared with an actual decline of 55 percent. Much more important in depressing prices in this period was the rapid increase in production in Brazil, Cote d'Ivoire, Indonesia, and Malaysia (which together accounted for about 75 percent of the increased production in that decade). That increased production resulted largely from tree planting in response to higher world cocoa prices in the late 1970s -- and subsequent increases in productivity. The results of counterfactual simulations suggest that cocoa production in Ghana would have been at almost half its 1989-90 level if Ghana had not implemented its structural adjustment program. The producers'surplus would have been lower without the program, and the government's budget deficit would have been unsustainable. The effects of the structural adjustment program in Nigeria are mixed. The simulation results show lower cocoa production but higher government revenue without the reforms. But the program was evaluated only three years after the reforms, so the full effects on production had not been realized. The structural adjustment programs in Ghana and Nigeria had a negative effect on other cocoa-producing countries in sub-Saharan Africa and the rest of the world -- producing an estimated loss (in government revenue from cocoa exports and producer surplus) of about 15 percent in other sub-Saharan African countries. Results show that both Cote d'Ivoire and Cameroon would have been better off had they set export taxes at a higher level (closer to an estimated"optimal"level) at the same time that they depreciated the real exchange rate. Producer prices could have been sustained at their earlier higher level, or even raised, without hurting government revenues. Structural adjustment programs in Ghana and Nigeria had a negative effect on producers in other countries, but not adopting such policies would have been economically irrational, contend the authors.Environmental Economics&Policies,Economic Theory&Research,Economic Stabilization,Access to Markets,Markets and Market Access

Can one count the shape of a drum?

Sequences of nodal counts store information on the geometry (metric) of the domain where the wave equation is considered. To demonstrate this statement, we consider the eigenfunctions of the Laplace-Beltrami operator on surfaces of revolution. Arranging the wave functions by increasing values of the eigenvalues, and counting the number of their nodal domains, we obtain the nodal sequence whose properties we study. This sequence is expressed as a trace formula, which consists of a smooth (Weyl-like) part which depends on global geometrical parameters, and a fluctuating part which involves the classical periodic orbits on the torus and their actions (lengths). The geometrical content of the nodal sequence is thus explicitly revealed.Comment: 4 pages, 1 figur

Modeling the surface and interior structure of comet nuclei using a multidisciplinary approach

The goal was to investigate the structural properties of the surface of comet nucleus and how the surface should change with time under effect of solar radiation. The basic model that was adopted was that the nucleus is an aggregate of frosty particles loosely bound together, so that it is essentially a soil. The nucleus must mostly be composed of dust particles. The observed mass ratios of dust to gas in the coma is never much greater than unity, but this ratio is probably a much lower limit than that of the nucleus because it is vastly easier to remove the gaseous component by sublimation than by carrying off the dust. Therefore the described models assumed that the particles in the soil were frost covered grains of submicron basic size, closely resembling the interstellar grains. The surface properties of such a nucleus under the effects of heating and cooling as the nucleus approaches and recedes from the Sun generally characterized

An approximate dynamic programming framework for modeling global climate policy under decision-dependent uncertainty

Analyses of global climate policy as a sequential decision under uncertainty have been severely restricted by dimensionality and computational burdens. Therefore, they have limited the number of decision stages, discrete actions, or number and type of uncertainties considered. In particular, other formulations have difficulty modeling endogenous or decision-dependent uncertainties, in which the shock at time t+1 depends on the decision made at time t. In this paper, we present a stochastic dynamic programming formulation of the Dynamic Integrated Model of Climate and the Economy (DICE), and the application of approximate dynamic programming techniques to numerically solve for the optimal policy under uncertain and decision-dependent technological change. We compare numerical results using two alternative value function approximation approaches, one parametric and one non-parametric. Using the framework of dynamic programming, we show that an additional benefit to near-term emissions reductions comes from a probabilistic lowering of the costs of emissions reductions in future stages, which increases the optimal level of near-term actions

Computation by measurements: a unifying picture

The ability to perform a universal set of quantum operations based solely on static resources and measurements presents us with a strikingly novel viewpoint for thinking about quantum computation and its powers. We consider the two major models for doing quantum computation by measurements that have hitherto appeared in the literature and show that they are conceptually closely related by demonstrating a systematic local mapping between them. This way we effectively unify the two models, showing that they make use of interchangeable primitives. With the tools developed for this mapping, we then construct more resource-effective methods for performing computation within both models and propose schemes for the construction of arbitrary graph states employing two-qubit measurements alone.Comment: 13 pages, 18 figures, REVTeX

Computation of Khun-Tucker triples in optimum design problems in the presence of parametric singularities

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/76242/1/AIAA-1994-4416-414.pd

Stability and topology of scale-free networks under attack and defense strategies

We study tolerance and topology of random scale-free networks under attack and defense strategies that depend on the degree k of the nodes. This situation occurs, for example, when the robustness of a node depends on its degree or in an intentional attack with insufficient knowledge on the network. We determine, for all strategies, the critical fraction p_c of nodes that must be removed for disintegrating the network. We find that for an intentional attack, little knowledge of the well-connected sites is sufficient to strongly reduce p_c. At criticality, the topology of the network depends on the removal strategy, implying that different strategies may lead to different kinds of percolation transitions.Comment: Accepted in PR