Diversification and stabilization in a resource-exporting country

The costs and benefits of export diversification in an old non-oil commodity exporting country are the subject matter of the following analysis. In chapter 2 the causal nexus from commodity price fluctuations to domestic disturbances is developed from well-established macro- and microeconomic theory-. As both structural change and multiple distortions are central to the argument, the analysis is promising only in a quantitative multisectoral general equilibrium framework applied to some appropriate country. The case of copper-exporting Chile will be studied here. The country model is described in chapter 3 and documented in the appendix. The model experiments used for determining the costs and benefits are also designed in chapter 3. The results are presented and discussed in chapter 4 and conclusions are drawn in chapter 5.

Exogenous sources of food insecurity in an open developing country

The vagaries of nature and of world grain markets, causing domestic food production and food import prices to fluctuate, are commonly considered the major external sources of food insecurity in developing countries. The need for steady domestic food production, and for stable world grain prices or international assistance in meeting a fluctuating grain import bill, are accordingly emphasized by the authors. Food self-sufficiency and commodity reserves are also stressed, given barriers to trade. Recent events in Latin American and African countries seem to suggest that erratic capital flows and export earnings, supposedly caused by instabilities of world financial and world primary commodity markets, can be just as detrimental to the maintenance of appropriate food consumption levels. If these claims of additional exogenous sources are subtantiated, the priorities of a food security strategy might need to be reconsidered.

A structural policy model for the Federal Republic of Germany

In this paper we present a structural policy model of the comparative- static general equilibrium type. Our model for the Federal Republic of Germany closely resembles the Australian ORANI model (Dixon et al., 1982) which in turn has its origin in Johansen's pioneering work for Norway (Johansen, 1960). An attractive trademark of Johansen-models is that they are written as a set of structural equations which are linear in all growth rates. Exogenous and endogenous variables can be exchanged easily and solutions require no more than simple matrix operations. This makes for a highly flexible instrument of policy analysis. A consequence of linearisation, of course, is that model solutions provide only for linear approximations. However, a method has been developed to correct for the linearisation error in case of large policy changes.

The determinants of European agricultural trade interference

First World politicians ascribe an exceptionally high social value to the well-being of domestic farmers, apparently without being penalized by political setbacks. In the European Community (EC) , they fix domestic prices on most agricultural commodities above world market prices, sustain these prices through variable import levies and export restitutions, subsidize production and factor use and dampen price fluctuations, all with the purpose of raising the levels and improving the stability of farmers1 incomes. While agricultural policymakers in the United States (US) and in most other OECD countries do not always intervene in the same commodity markets, they generally rely on the same set of instruments . Given the fairly inelastic demand and supply responses among Second World planners and the limited flexibility among Third World producers and consumers, the effect of agricultural policies adopted in the First World is to lower the levels of world agricultural prices and to amplify their oscillations . World welfare' is reduced as a result.

The causes and consequences of steel subsidization in Germany

The purpose of this essay is to investigate the possible economic consequences of the recent German steel subsidy program and assess to what extent those consequences conform with the objectives which motivated that program's adoption. The paper is organized as follows: Particular developments in the steel industry are briefly described in section II, while in section III, the political economy of protection in Germany is examined to determine the primary beneficiaries of previous protectionist policies. Both serve as a basis for identifying the revealed political objectives behind the current steel program. The next step is to simulate the economic consequences of a decline in the world market price of steel in the absence of any government intervention, using a multi-sectoral general equilibrium model of an open economy that resembles Germany. The economic impacts of a sectoral policy response and a regional policy response are then likewise examined and compared. This occurs in section V. The main elements and assumptions of the model used are outlined in section IV; the complete model specification is presented in an appendix. Conclusions are drawn in section VI.

Growth and employment in Mexico: A quantitative analysis of policies

Mexico has sustained unusual rates of real income growth (6.4 % of average annual GDP growth between 19 50 and 1970) by following an economic policy giving first priority to manufacturing industries. Import substitution has been the dominating trade strategy since the late 1940s with only cautious steps to a more export oriented strategy since the mid-1960s. Mexico has not been spared the well known problems of regional and sectoral imbalances, a skewed personal income distribution and unemployment accompanying the industrialization of other developing countries. Beginning with the presidentship of Diaz Ordaz (1966-70) the attenuation of imbalances and inequities is proclaimed as a specific policy goal in plan documents, while employment creation is added to the list in the Echeverrîa administration. Although based on another stratum of the Mexican political economy the stepwise execution of a massive land reform has obvious complementary effects to the industrial policy. The agricultural sector absorbs much of the fast growing labor force which cannot be employed in the more capital-intensive industries under socially acceptable conditions. The land reform allows for a minimum wage and a working conditions policy in urban regions without increasing the urban unemployment to a level where it would disrupt the political system. Land reform and minimum wages help to keep political stability despite the social strains created by rapid industrialization as well as population growth.