Commodity Prices: Cyclical Weakness or Secular Decline?

Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s. The appropriate policy response to a terms of trade shock depends importantly on whether the shock is perceived to be temporary or permanent. Our results indicate that the recent weakness in commodity prices is mostly secular, stressing the need for commodity exporting countries to concentrate on export diversification and other structural policies. There is, however, scope for stabilization funds and the use of hedging strategies, since the evidence also suggests commodity prices have become more volatile.

Non-oil commodity prices: Cyclical weakness or secular decline?

Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s. The appropriate policy response to a terms of trade shock depends importantly on whether the shock is perceived to be temporary or permanent. Our results indicate that the recent weakness in commodity prices is mostly secular, stressing the need for commodity exporting countries to concentrate on export diversification and other structural policies. There is, however, scope for stabilization funds and the use of hedging strategies, since the evidence also suggests commodity prices have become more volatile.exports world demand commodity prices metals business cycle

Book Review - Birds in Iowa

Here is a book that those who are interested in birds and their distribution in Iowa will absolutely have to possess. This volume is the successor to the book Iowa Birds, which was written by the above authors together with three others and published in 1984. It brings our understanding to the number of species of birds and their relative abundance in Iowa up-to-date. Although only twelve years elapsed between the publication of the previous volume and this one, the activity of those interested in identifying birds increased enormously during those years. In addition, their ability to identify and find rare or unusual species increased as well. One obvious result of this is that the official state list of bird species seen in the state increased in those twelve years from 362 to 398, an increase of approximately 10%! So it was clearly time for a significant update of the earlier volume Iowa Birds. Birds in Iowa does a fine job in bringing our understanding of bird distribution in Iowa up-to-date

The Behavior of Non-Oil Commodity Prices

The need to understand the factors that influence the behavior of commodity prices has taken on a special urgency in recent years, as nonoil real commodity prices have been declining almost continuously since the early 1980s. Since their short-lived recovery in 1984, real non-oil commodity prices have fallen by about 45 percent, translating into a sharp deterioration in the terms of trade for most commodity-dependent exporters. As Chart 1 illustrates, in 1992 the price of non-oil commodities relative to that of manufactures reached its lowest level in over 90 years.1 The longterm behavior of real commodity prices would thus appear to lend some support to the well-known Pre bisch-Singer hypothesis.2 This pattern in commodity prices has important practical implications for policymakers. For example, the presence of a negative trend in commodity prices implies continuously worsening terms of trade for many commodity-dependent countries, and further that efforts to stabilize the incomes of producers for an extended period of time may not be financially sustainable.

Analytical aspects of the debt problems of heavily indebted poor countries

A group of heavily indebted low-income countries (HIPCs), most in Sub-Saharan Africa, has continued to experience external debt problems. Because the HIPCs'economic characteristics and external imbalances are very different from those of middle-income countries, the analysis of debt problems and debt-reduction must be modified and complemented in important ways. Therefore, the authors revisit the methodological issues underlying debt sustainability analysis, as well as theory and empirical evidence on how large debts affect economic performance. Their main question is: Should consideration be given to more upfront debt reduction for HIPCs, over and above that provided under current mechanisms, or should debts continue to be refinanced, subject to conditionality? Ongoing refinancing with conditionality reduces moral hazard and gives countries an incentive to maintain good policies. However, this approach entails transition costs, can create uncertainty, may lack credibility, and can impede local ownership of reform programs. Upfront debt reduction can create moral hazard problems and may weaken the incentives for maintaining sound policy. There are theoretical arguments about why a high level of debt can impede investment and policy reform. Although empirical evidence concerning the hypothesis that HIPCs suffer significant adverse effects from their large debt overhang is inconclusive, evidence from middle-income countries suggests that debt reduction can benefit an economy if the policy environment is right. Whether there should be further debt reduction for specific heavily indebted low-income countries depends on the facts for each case and requires quantitative analysis of data about different forces at play in the countries involved.Strategic Debt Management,Economic Theory&Research,Environmental Economics&Policies,Payment Systems&Infrastructure,Banks&Banking Reform,Strategic Debt Management,Economic Theory&Research,Environmental Economics&Policies,Banks&Banking Reform,Public Sector Economics&Finance

The demand for money in developing countries: Assessing the role of financial innovation

Traditional specifications of money demand have been commonly plagued by persistent overprediction, implausible parameter estimates, and highly autocorrelated errors. This paper argues that some of those problems stem from the failure to account for the impact of financial innovation. We estimate money demand for ten developing countries employing various proxies for the innovation process and provide an assessment of the relative importance of this variable. We find that financial innovation plays an important role in determining money demand and its fluctuations, and that the importance of this role increases with the rate of inflation.money demand inflation currency substitution dollarization financial innovation

The demand for money in developing countries : assessing the role of financial innovation

Traditional specifications of money demand have commonly been plagued by persistent overprediction, implausible parameter estimates, andhighly autocorrelated errors. The authors argue that some of these problems stem from the failure to account for the impact of financial innovation. They estimate money demand for ten developing countries, using various proxies for financial innovations. They also assess the relative importance of this variable, finding financial innovation can be better modeled as a stochastic (random-walk) trend rather than a deterministic (time) trend. Financial innovation plays an important role in determining fluctuations of the demand for money. The importance of this role increases with the rate of inflation.Economic Theory&Research,Environmental Economics&Policies,Fiscal&Monetary Policy,Inequality,Energy and Environment

A global evaluation of forest interior area dynamics using tree cover data from 2000 to 2012

Context Published maps of global tree cover derived from Landsat data have indicated substantial changes in forest area from 2000 to 2012. The changes can be arranged in different patterns, with different conse- quences for forest fragmentation. Thus, the changes in forest area do not necessarily equate to changes in forest sustainability. Objective The objective is to assess global and regional changes in forest fragmentation in relation to the change of forest area from 2000 to 2012. Methods Using published global tree cover data, forest and forest interior areas were mapped in 2000 and 2012. The locations of forest interior change were compared to the locations of overall forest change to identify the direct (pixel level) and indirect (landscape level) components of forest interior change. The changes of forest interior area were compared to the changes of total forest area in each of 768 ecological regions. Results A 1.71 million km2 (3.2 %) net loss of global forest area translated to a net loss of 3.76 million km2 (9.9 %) of forest interior area. The difference in loss rates was consistent in most of the 768 ecological regions. The indirect component accounted for 2.44 million km2 of the net forest interior change, com- pared to 1.32 million km2 that was attributable to the direct component. Conclusion Forest area loss alone from 2000 to 2012 underestimates ecological risks from forest fragmen- tation. In addition to the direct loss of forest, there was a widespread shift of the remaining global forest to a more fragmented condition.JRC.H.3-Forest Resources and Climat

The Impact of Social Deprivation on Paranoia, Hallucinations, Mania and Depression: The Role of Discrimination Social Support, Stress and Trust

The negative implications of living in a socially unequal society are now well documented. However, there is poor understanding of the pathways from specific environmental risk to symptoms. Here we examine the associations between social deprivation, depression, and psychotic symptoms using the 2007 Adult Psychiatric Morbidity Survey, a cross-sectional dataset including 7,353 individuals. In addition we looked at the mediating role of stress, discrimination, trust and lack of social support. We found that the participants' neighbourhood index of multiple deprivation (IMD) significantly predicted psychosis and depression. On inspection of specific psychotic symptoms, IMD predicted paranoia, but not hallucinations or hypomania. Stress and trust partially mediated the relationship between IMD and paranoid ideation. Stress, trust and a lack of social support fully mediated the relationship between IMD and depression. Future research should focus on the role deprivation and social inequalities plays in specific manifestations of psychopathology and investigate mechanisms to explain those associations that occur. Targeting the mediating mechanisms through appropriate psychological intervention may go some way to dampen the negative consequences of living in an unjust society; ameliorating economic injustice may improve population mental health

Non-oil commodity prices: Cyclical weakness or secular decline?

Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s. The appropriate policy response to a terms of trade shock depends importantly on whether the shock is perceived to be temporary or permanent. Our results indicate that the recent weakness in commodity prices is mostly secular, stressing the need for commodity exporting countries to concentrate on export diversification and other structural policies. There is, however, scope for stabilization funds and the use of hedging strategies, since the evidence also suggests commodity prices have become more volatile