Price transmission along the Lithuanian pigmeat supply chain

Introduction. The paper analyses structural changes of pig farming in Lithuania and explores price behaviour along the Lithuanian pigmeat supply chain. Materials and methods. The conducted study uses annual indicators collected by Statistics Lithuania and weekly prices published by SE ‘Agricultural Information and Rural Business Centre’ (AIRBC). Methods of comparative analysis and graphical representation allow investigating the most important changes of Lithuanian pig farming. Price behaviour is studied employing econometric tests showing the characteristics of the analysed pigmeat price series and different aspects of price relations in the short- and long-term perspective. Results and discussion. The share of small and medium-sized farms with less than 10 pigs is decreasing in the structure of pig farms, while farmer and family farms have lost their key role in pig farming, in particular between 2004 and 2018. This development direction of pig farming was caused by multiple factors, including the change of business environment after 2004, transformation of agricultural support model and aftermaths of price hikes, the impact of governmental intervention due to the integration into the Eurozone, as well as animal health issues. Price transmission analysis demonstrates that pork market had faced several critical shocks that had an impact on price behaviour and stakeholders’ welfare. Granger causality test shows price setting direction from retail to farm, while, in the long run, the hypothesis of asymmetric behaviour is not supported. Conclusions. The study confirms dramatic change of Lithuanian pig farming sector and the need of additional support mechanism to foster a structure of pig farming that allows the co-existence of different types of farms. A price transmission study shows market efficiency problems in the short-run that could have a negative impact on farmers’ welfare

Ready for the Flipped Classroom? Preliminary Experiences of The New Approach In Teaching Economics to Non-Major Students

The flipped classroom is an innovative educational model that has attracted more attention recently. In the flipped classroom, course content is delivered via online videos and/or pre-recorded lectures that can be watched by students at home. It can free up the class time that lecturers are able to devote for learner-centered activities such as problem solving and active learning. This research is motivated by the flipping model with an aim to engage students’ learning outside of the classroom as well as respond to the challenges of teaching economics to non-economics majors, which reflect difficulties in delivering all the materials given the limited time period of a class. An online tool called “EDpuzzle” is introduced to facilitate flipping the class. After four-week trial of partially flipping the classroom, we surveyed 170 students from three economics modules to gather their feedback in order to explore the possibility and potential to adopt the flipped classroom strategy at a wider scale. Our pilot analysis indicates that technologies, like EDpuzzle, can help lecturers to deliver the course content through videos and monitor the class, but more effort is needed to motivate and encourage students to participate and prepare. In addition, flipping a class also involves design of various types of activities, including in-class and out-of-class, which are all vital for an effective flipped classroom. Therefore, our study calls for further research on how to design, implement and evaluate the flipped classroom in economics teachin

Incorporating the advantages of clickers and mobile devices to teach economics to non-economists

In the twenty-first century, teaching practitioners in higher education (HE) have found themselves confronted with more challenges to help students engage in learning. Particularly, one of the main problems with the traditional lecture format to teach non-economists economics is that students tend to lack interest in the subject and therefore have a low level of engagement. Student response systems (i.e. “clickers”) have been used in classes for about 20 years and become more popular on many college campuses. Many studies reveal that clicker technology offers great promise in increasing students’ participation and engagement in lectures. Meanwhile, thanks to fast development of mobile technology, personal mobile devices can be integrated with clicker systems into teaching and learning with improved features. The programme we used and found as a very useful interactive teaching tool for learning is called Kahoot!. This paper offers a brief guidance on how to use Kahoot! to encourage active learning and engage non-economics majors in learning economics. Meanwhile, the existing relevant literature with regard to the use of clickers in HE is highlighted. In addition, the effectiveness of using Kahoot! in teaching economics to non-economists is evaluated by a student survey

Fiscal Policy and Economic Growth, Empirical Evidence in European Union

The role of Fiscal policy in the long run growth process has been crucial in macroeconomics since the appearance of endogenous growth models. Additionally, a significant debate among economists involves whether several types of spending or taxation enhance economic growth. The main objective of this paper is to highlight the relationship between fiscal policy and economic growth in the EU-15, and make an attempt to determine which of the fiscal policy instruments enhance economic growth.We deployed panel data techniques and included both sides of budget, spending and taxation, in our regressions and used the most recent dataset data for fiscal variables from Eurostat. We made a new classification of public expenditures into homogeneous groups in order to reduce the explanatory variables and increase the efficiency of our model and results since we have data for only 14 years. In our empirical analysis we included OLS, fixed effects models, random effects models and GMM estimators, the Arellano & Bond (1991) and the Arellano & Bover (1995) - Blundell & Bond (1998) estimators.On the first round of our regressions we find a negative impact of spending on human capital accumulation on economic growth. Our empirical results also indicate that an increase on government spending on infrastructure has a significant positive impact on the economy growth of a country. Additionally, in our regressions the variable government spending on property rights protections include spending on defence and spending on public order safety. Our empirical results from the first round of regressions imply a strongly negative relationship between these two variables. However, on the second round of our regressions we aggregate defence spending from spending on property right protection and we did not find any relationship between economic growth and defence spending. Moreover, we found a non-significant relationship between government spending on social protection and economic growth. On the second round of regressions, when we allow for non-linear growth effects we find a positive relationship with deficits and economic growth, which is in contrast with Ricardian Equivalence. We also included the employment growth and business investment in our model because labour and capital are very important factors of production in growth models. In our empirical results we do not find a significant impact of employment on economic growth, but when we allow for non-linear growth effects we find a strongly positive impact. However, we found that gross fixed capital formation of the private sector as a percentage of GDP in both rounds of our regressions, has no significant impact on economic growth. Finally, our empirical results do not support any evidence of relationship between openness and economic growth

A synthesis of empirical research in the sustainability of fiscal policy

In the last twenty years many developed countries have faced significant public deficits, while the ability of government authorities to deal with public deficits has been receiving rising awareness from economists and policy makers. This is an imperative topic, in provisions of economics and public policy, and it is a central subject for the EMU area; hence, they are the main motivations of this paper. Theoretically, equilibrium growth paths have to be supported by adequate fiscal policy. The risk of a default on Greek sovereign debt during the last years has worried the Euro into its first serious crisis and raised the issue of debt sustainability in Europe. There is no universally accepted definition for sustainable fiscal policy. However, economists agree that expanding public debt is not sustainable. Budget policy is constrained by the need to finance the deficit. In this paper we provide a synthesis of empirical research in the validity of the Sustainability of Fiscal Policy of the existing literature for the period 1986-2012. These studies used both time series and panel data sets and empirically examined the Sustainability of fiscal policy for a single country and for a group of countries (multi-country studies). Furthermore, there are studies using data on government expenditure at the provincial or state level. Existing studies in this topic vary in the country selection. They used data for developed, developing countries or group of both, while most of them examined developed or industrial countries. All these studies found different empirical results: support, no support or mixed results

Military Spending and economic growth in Greece and the arms race between Greece and Turkey

One of the most important reasons that led Greece to the current macroeconomic instability is the high military spending during the last decades. Thus, it is necessary to examine the impact of military spending on economic growth for the case of Greece. Furthermore, it will be very useful to examine the arms race hypothesis between Greece and Turkey in order to identify if there is an interaction between these countries that leads to the high level of military spending. In this paper we empirically test the relationship between military spending and economic growth for Greece and Turkey during 1957-2013, and examine the validity of arms race hypothesis between the two countries. We deployed unit root tests, unit root tests with structural changes, cointegration techniques and finally Granger causality tests. Granger causality tests in the case of Greece and Turkey imply that the causality runs from military spending to economic growth, however we find that there is no evidence of causality between Greek and Turkish military spending, which mean that these countries act independently

Is there a significant change in the price transmission between producer and retail prices within the British Pork industry?

The purpose of this study is to examine price transmission between the producer and retail in the UK pork industry. It aims to find the direction of causality in the long and short-run, and whether there is a long-run relationship between producer and retail prices. This study used monthly time series data for producer and retail prices ranging from 1988-2016. Econometric tests were used such as the Augmented Dickey-Fuller (1979) and Phillips-Perron (1988) Unit Root tests; Bai-Perron (1998) Unit Root test allowing for multiple structural breaks; Johansen (1991) and Engle-Granger (1987) Co-integration tests; Granger (1988) Causality, and the Error Correction Model showing the speed of recovery in the long-run relationship after a shock. The results of the Unit Root tests found both producer and retail prices to be integrated of order one I(1). Three structural breaks were found occurring in the years of 1996, 2002 and 2012. The Co-integration tests found that there is one long-run relationship between producer and retail prices. The Error Correction Model showed the return to a new equilibrium after a shock was 9% per month totalling over 11 months for a full recovery from a shock. The Granger (1988) Causality test indicated that producer prices do Granger cause retail prices in the short-run. In this study the latest econometric techniques were used including structural breaks which some previous studies overlooked. This study into the producer and retail prices in the UK pork industry is the latest study of this kind since the Brexit decision

A synthesis of empirical research on the validity of Wagner’s Law

In this paper we provide a synthesis of empirical research in the validity of Wagner’s law of the existing literature for the period 1969-2014. Wagner’s law attracted the interest of many authors and is still being discussed by policy makers and economists in relation to government spending expansion since it was applied by Adolph Wagner in the 1880s. There are two different hypotheses about the expansion of state activity. Firstly, the size of government activity is tested in endogenous growth models, while the second suggest that the economic activity is exogenous to the economic growth (Keynesian view). Additionally, we will present the previous empirical work in this topic. Since the translation of Wagner’s “law” in 1950’s, a large number of authors tested various specifications of the law. These studies used both time series and panel data sets and empirically examined the law for a single country and for a group of countries (multi-country studies). Furthermore, there are studies using data on government expenditure at the provincial or state level. Existing studies in this topic vary in the country selection. They used data for developed, developing countries or group of both, while most of them examined developed or industrial countries. Finally, there are studies examined the Wagner’s against Keynesian hypothesis. All these studies found different empirical results: support, no support or mixed results. Conflicting findings in this field are not surprising because of the diverse theoretical predictions and also because countries may be at different stages of economic development; thus, the debate about the relationship between government spending and economic growth remains an unresolved issue

Price transmission: the case of the UK dairy market

The UK milk market has faced major economic difficulties over the last 20 years, seeing the smallest milk producers exit the industry. The key objective of this study is to examine price transmission within the UK milk market to understand the market’s efficiency and influences. An Augmented Dickey–Fuller unit root test identified all the examined series were stationary at the first difference. A modified Dickey–Fuller test allows for levels and trends that differ across a single break date and Bai–Perron test identified multiple structural breaks, including January 2012, July 2015, and November 2017. The Johansen cointegration test identified one cointegrating factor. The Error Correction Model results identified that prices would regain equilibrium at 14%, roughly 7 months after a price shock. Granger Causality identified the producer to granger cause retailer prices. The Threshold Autoregressive model suggests the dataset is symmetric. Econometric research into the UK’s liquid milk market is limited. As such, this study will provide an understanding as to whether current econometric policies are working, alongside the potential to aid the improvement or development of new policies while the UK exits the EU. Additionally, this study includes structural breaks as previous studies have failed to do so, which has led to a mixture of results

Towards better understanding of vegetable market functioning: The Lithuanian cases of fresh tomatoes and cucumbers

The efficiency of the European Union vegetable market depends on the ability of Member States to identify and solve market functioning problems of particular agricultural commodities. The goal is to investigate the vertical price transmission along the fresh tomato and cucumber supply chains in Lithuania. The article contributes to the scarce research on the Lithuanian vegetable market, enriching the previous studies with fresh tomato and cucumber cases. The study employs unit root tests, the Johansen and the Engle–Granger co-integration tests, describes error correction model coefficients and provides results of the Granger causality test and momentum threshold autoregressive test for asymmetry. Results of price transmission analysis show the presence of the long-run asymmetry within the studied value chains suggesting that the markets are not efficient; however, the market of cucumbers returns to an equilibrium quicker. Finally, the study confirms that in both cases, there are long-term relationships between retail and farm prices, while the causality is running from farm to retail level in both markets