"Look at lists of “100 Things to Do Before You Die,” and you’ll find them dominated by exotic sensations of one kind or another (“Skydive”; “Shower in a waterfall”; “Eat jellied eels from a stall in London”).

Really? This is the best we can do? This is what it’s all about? These are the things that make our lives worth living? When I think about what really makes me happy, what I really crave, I come up with a very different list: concentrated, purposeful work, especially creative work; being with people I love; feeling like I’m part of something larger. Meaning, connectedness, doing strenuously what you do well: not sights, not thrills, and not even pleasures, as welcome as they are. Not passivity, not letting the world come in and tickle you, but creativity, curiosity, altruism, engagement, craft. Raising children, or teaching students, or hanging out with friends. Playing music, not listening to it. Making things, or making them happen. Thinking hard and feeling deeply."

They can grind a -11 RX into a pair of Rudy Projects?!!

"The growing importance of global value chains (GVCs) in the international organisation of production increasingly challenges the traditional way of measuring countries’ export performance and hence international competitiveness. As a result of growing production fragmentation, a country’s export bundle nowadays incorporates imports of intermediate goods representing a (large) part of its value. In this case, simply looking at the evolution of exports may misrepresent the international competitive position of a country. This paper discusses the export performance of countries along the value chain by distinguishing upstream activities (i.e. the production of intermediate inputs) and more downstream activities (e.g. the final assembly of products). The empirical analysis first shows how imports of intermediates increasingly determine the export competitiveness of countries in final products. Second, the paper analyses the developments at the intensive and extensive margins of trade and studies how structural changes in terms of geographical and sectoral composition, largely outside the influence of national policies, have contributed to countries’ export performance."

"Some authors have concluded that higher prices in agriculture augmented the rate of adoption of new technology, while others have suggested that productivity and technical efficiency are negatively related to agricultural protection. This paper examines the effects of agricultural policies on technical efficiency and Total Factor Productivity growth in 20 advanced countries during the period 1961–2002. A panel stochastic frontier regression model is used to simultaneously estimate the stochastic frontier production function and the equation of inefficiency, following the one-stage model suggested by Battese and Coelli (1995). The inefficiency model shows that technical efficiency is negatively related to farmers’ protection in both the Cobb-Douglas and Translog specifications of the model. Consistent with the previous literature, this paper finds that technical efficiency is positively associated with human capital. Countries with smaller land holdings are associated with higher efficiency (in the Cobb-Douglas model), and inequality in land distribution is negatively related to efficiency. Here, TFP growth has been estimated following Kumbhakar and Lovell (2000). The co-integration test of Westerlund (2007) leads to the rejection of the null hypothesis of no long-term relation between TFP growth and agricultural protection. Finally, as suggested by a random-effect IV regression, TFP growth is lower in countries that had past (lagged) high levels of agricultural protection to famers."

"This paper examines how prices, markups and marginal costs respond to trade liberalization. We develop a framework to estimate markups from production data with multi-product firms. This approach does not require assumptions on the market structure or demand curves faced by firms, nor assumptions on how firms allocate their inputs across products. We exploit quantity and price information to disentangle markups from quantity-based productivity, and then compute marginal costs by dividing observed prices by the estimated markups. We use India’s trade liberalization episode to examine how firms adjust these performance measures. Not surprisingly, we find that trade liberalization lowers factory-gate prices. However, the price declines are small relative to the declines in marginal costs, which fall predominantly because of the input tariff liberalization. The reason is that firms offset their reductions in marginal costs by raising markups. This limited pass-through of cost reductions attenuates the reform’s impact on prices. Our results demonstrate substantial heterogeneity and variability in markups across firms and time and suggest that producers benefited relative to consumers, at least immediately after the reforms. To the extent that higher firm profits lead to the new product introductions and growth, long-term gains to consumers may be substantially higher."

"In this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output. We make use of data drawn from the Food and Agriculture Organization of the United Nations and our study covers the period 1980-2000. Due to the non-availability of reliable input price data, the study uses data envelopment analysis (DEA) to derive Malmquist productivity indexes. The study examines trends in agricultural productivity over the period. Issues of catch-up and convergence, or in some cases possible divergence, in productivity in agriculture are examined within a global framework. The paper also derives the shadow prices and value shares that are implicit in the DEA-based Malmquist productivity indices, and examines the plausibility of their levels and trends over the study period."

": FB3-2/98-20E-PDF

This paper discusses the merits and shortcomings of alternative price indices used in constructing real effective exchange rate indices and examines the effects of different weighting schemes. It also compares selected measures of the real effective exchange rate in terms of their ability to explain movements in Canadian net exports and real output. The paper argues that, although different weighting schemes may at times provide useful and complementary information, the choice of a weighting scheme does not, in general, significantly affect on measures of Canada's competitiveness."

"This 2012 report provides an economic overview of the Canadian agriculture and agri-food system. It is meant to be a multi-purpose reference document to provide:

•an introduction to the agriculture and agri-food system;
•a snapshot of structural changes that are occurring throughout the system in response to various factors; and
•background data and information to inform public discussions on challenges and opportunities facing the Canadian agriculture and agri-food system."

"Trade deficits and surpluses are sometimes attributed to intentionally low or high exchange rate levels. The impact of exchange rate levels on trade has been much debated but the large body of existing empirical literature does not suggest an unequivocally clear picture of the trade impacts of changes in exchange rates. In addition, much of the evidence on this subject considers currencies of large economies, and overwhelmingly the United States.

This study examines the impact of exchange rates and their volatility on trade flows in two small, open economies – Chile and New Zealand – with three major trading partners, in two broadly defined sectors – agriculture on the one hand and manufacturing and mining on the other. It finds that exchange volatility impacts trade flows in the small, open economies more than was found for larger economies. Findings do not clearly indicate the direction of the impact, i.e. whether this volatility increases or decreases trade in all countries and sectors. Exchange rate levels, on the other hand, affect trade in both agriculture and manufacturing and mining sectors although their magnitude differs depending on the trading partner and sector. Moreover, this study indicates that a depreciation in the exchange rates in Chile and New Zealand would not lead to a strong change in their trade balances with three main trading partners across the board."

"This paper examines the degree to which world price signals have been transmitted into domestic prices for eight countries and ten commodities, a total of 31 country/commodity pairs. The main characteristic of these countries was that they all undertook substantial policy reforms during the mid-1980s to early 1990s. The paper investigates the effect of reforms on the speed at which signals were transmitted to domestic markets and on the extent of price transmission. We find that Chile, Mexico, and Argentina are the only countries whose domestic commodity markets were integrated with world markets. For the remaining cases (Ghana, Madagascar, Indonesia, Egypt, and Colombia) in only a few country/commodity pairs is there some passthrough of world price changes. In terms of the effects of policy reforms, in the majority of the cases the hypothesis of a structural break following the reform year is rejected. "

"The study, conducted for the Committee on Trade and Investment (CTI) to measure the extent to which trade transaction costs were reduced under APEC’s Second Trade Facilitation Action Plan (TFAP II), found that there has been a 5% reduction in total trade transaction costs across the APEC region from 2006 through 2010, resulting in total savings of USD 58.7 billion. Although total fees and charges rose in real terms by USD 6.3 billion, an increase of 4.8%, total time taken to complete trade-related procedures fell 6.2% for a savings of USD 65.0 billion."

"This month, James Robinson and Daron Acemoglu, two American academics, published a thought-provoking book entitled Why Nations Fail. This examines dozens of countries around the world and proposes two key factors that determine whether a society prospers, or not. First, is there a centralised power structure that can implement decisions? And second, is this government system sufficiently “inclusive” to create “buy-in” from the poorer masses?"

"During the 1990s, reductions in tariffs resulting from free trade agreements led to an expansion of trade between Canada and the United States and to an increase in the export intensity of manufacturing plants. In contrast, the worldwide resource boom post-2000 led to higher prices for Canadian commodity exports, an appreciation of the Canada–US exchange rate, and a decline in the competitiveness of Canada's manufacturing sector in US markets. However, it also led to new domestic opportunities in the domestic resource sector. Canadian manufacturing firms adapted to these circumstances in different ways."

"One of the major problems with the data.gc.ca site, as with the CANSIM site, is that there are so many series, and the most useful series do not always rank highly in search results. Allowing users to flag the most useful series, and keeping track of downloads, would be a way to improve the quality of the search results."

yes!!

"In recent years, the agenda to support trade growth has moved beyond trade policy to embrace a wider set of 'behind the border' issues, focused on establishing an environment conducive to the emergence of firms that are competitive in both export and domestic markets. At the operational level, policymakers are increasingly requesting analytical support to understand the factors impacting competitiveness in current traded sectors, along with the prospects for diversification. In this context, the International Trade Department (PRMTR) has developed a Trade Competitiveness Diagnostic Toolkit (TCD)"

The future of food retailing?

"Africa trades too little with itself. This column argues that what is needed is an approach that reforms policies that create non-tariff barriers; puts in place appropriate regulations that allow cross-border movement of services suppliers; delivers competitive regionally integrated services markets; and builds the institutions that are necessary to allow small producers and traders to access open regional markets."

Appendix 2
Policy Measures Adopted in Bangladesh and India

"Abstract: South Asia is arguably the most vulnerable region to increasing food inflation given the large segment of the population living below or near the poverty line. This paper deals with the problems related to food price inflation in South Asian in a comprehensive manner. An in-depth empirical analysis of the possible factors that could explain the increase in food inflation is presented in the paper, and the impact of food price inflation on poverty and macroeconomic stability in South Asia has also been covered. Some practical policies are proposed to address the situation including a discussion on how regionalism may provide one of the solutions to food inflation."

"The flavour of the month among merger and acquisition bankers is companies that trade and market. Since last Friday, shares in Viterra, the Canadian grain trader, have jumped more than one-quarter after it said that it had received multiple takeover approaches. Glencore may be interested , so could up to seven other global agri-trading groups. A potential deal sent ripples as far away as Australia, where shares in Graincorp - which also looks vulnerable as a takeover target - rose 4 per cent. This all comes just two months after the acquisition of the Canadian grain handling facilities of Great Northern Grain by Richardson International.

With several possible acquirers looking at Viterra, an auction looks certain and the final price could outstrip current estimates. Viterra's earnings before interest, tax, depreciation and amortisation are forecast to be C$672m this year. An enterprise value/ebitda multiple of 10 - similar to other North American agribusiness deals - gives a value of C$6.7bn. Removing net debt of about C$1.1bn leaves an equity value of about C$5.6bn - about 8 per cent higher than it currently sits.

Investors who have jumped into Viterra's stock are being cautious. The competitive landscape after Canada ends its grain monopoly in August is uncertain. From then on, Canadian farmers will be able to choose to whom they sell their grain. As trading groups scramble to establish share in response to the changing market, they may have to raise the price they pay for grain. That will put more pressure on margins already squeezed by the one-third fall in the wheat price since its peak last year. The intense interest in the grain industry reflects its long-term outlook. But with too many unknowns in an industry undergoing a seismic shift, short-term investors could be left with a sour taste in their mouths."

"Abstract: A key open question in economics is the practical, portable modeling of bounded rationality. In this short note, I report ongoing progress that is more fully developed elsewhere. I present some results from a new model in which the decision-maker builds a simplified representation of the world. The model allows to model boundedly rational dynamic programming in a parsimonious and quite tractable way. I illustrate the approach via a boundedly rational version of the consumption-saving life cycle problem. The consumer can pay attention to the variables such as the interest rate and his income, or replace them, in his mental model, by their average values. Endogenously, the consumer pays little attention to interest rate but pays keen attention to his income. One consequence of this is that Euler equations will be biased, and the intertemporal elasticity of substitution will be biased toward 0, in a manner that is quantitatively important."

As agricultural production has shifted to farms with larger sales, so too has the distribution of commodity-related program payments.

"By 2009, half of commodity-related program payments went to farms operated by households earning over $89,540, a quarter went to farms operated by households with incomes greater than $209,000 and 10 percent went to farms operated by households with incomes of at least $425,000."

"We build into a Ricardian model the role of trade in intermediate inputs, sectoral linkages and di¤ering productivity levels across sectors. We also propose a method to estimate sectoral trade elasticities. In our model, the trade e¤ects due to overall tari¤ reductions account for most of the observed changes in trade ‡ows for NAFTA members.
We decompose the e¤ects of NAFTA and …nd that 93% of Mexico’s, 58% of Canada’s and 55% of the United States’trade e¤ects can be attributed to NAFTA’s tari¤ reductions. Trade in intermediate inputs and input-output linkages can amplify the welfare e¤ects of tari¤ reductions."

Part of Dani Rodrik's point seems to be that the distribution of benefits from international trade tends to be a neglected aspect of pure economic analysis.

I'd add that the the distribution of benefits from ANY economic activity tends to be a neglected aspect of pure economic analysis. Political economists are far more interested in who gains and who loses from a particular policy than pure economists are. IMHO, anyone interested in exploring this subject would generally be better off turning to political economists, or institutional economists like Mushtaq Khan (redistribution of rents) and Douglass North (transaction costs in relation to benefits from trade).

SECTION 3. Managing risks across food systems

"This paper introduces a new class of multivariate volatility models which is easy to estimate using covariance targeting, even with rich dynamics. We call them rotated ARCH (RARCH) models. The basic structure is to rotate the returns and then to fit them using a BEKK-type parameterization of the time-varying covariance whose long-run covariance is the identity matrix. The extension to DCC-type parameterizations is given, introducing the rotated conditional correlation (RCC) model. Inference for these models is computationally attractive, and the asymptotics are standard. The techniques are illustrated using data on some DJIA stocks. "

"A new approach to optimizing or hedging a portfolio of nancial instruments to reduce risk is presented and tested on applications. It focuses on minimizing Conditional Value-at-Risk (CVaR) rather than minimizing Value-at-Risk (VaR), but portfolios with low CVaR necessarily have low VaR as well. CVaR, also called Mean Excess Loss, Mean Shortfall, or Tail VaR, is anyway considered to be a more consistent measure of risk than VaR. Central to the new approach is a technique for portfolio optimization which calculates VaR and optimizes CVaR simultaneously. This technique is suitable for use by investment companies, brokerage rms, mutual funds, and any business that evaluates risks. It can be combined with analytical or scenario-based methods to optimize portfolios with large numbers of instruments, in which case the calculations often come down to linear programming or nonsmooth programming. The methodology can be applied also to the optimization of percentiles in contexts outside of nance."

"Fundamental properties of conditional value-at-risk, as a measure of risk with significant advantages over value-at-risk, are derived for loss distributions in finance that can involve discreetness. Such distributions are of particular importance in applications because of the prevalence of models based on scenarios and finite sampling. Conditional value-at-risk is able to quantify dangers beyond value-at-risk, and moreover it is coherent. It provides optimization shortcuts which, through linear programming techniques, make practical many large-scale calculations that could otherwise be out of reach. The numerical efficiency and stability of such calculations, shown in several case studies, are illustrated further with an example of index tracking."

"Accurate estimates of farm-level crop yield probability density functions (PDF's) are crucial for studying various crop insurance programs and production under risk and uncertainty. Unfortunately, farm-level crop yield PDF's are difficult to estimate due to the lack of sufficient farm yield data. County yield data cover much longer time periods than farm yield data, but using county yield distributions to conjecture about farm yield distributions is dangerous. The theoretical reason is that county yield is the average of correlated farm yields, for which there is no recognizable probability density function (PDF). This paper investigates the relationship between farm and county yield distributions using both statistical theory and the Monte-Carlo simulation method. Results show that under suitable farm yield correlation and density structures, the shape of yield distribution at the farm level is similar to that at the county level. A method is then developed for estimating and simulating farm yield distributions based on county yield PDF estimates and information contained in farm yield data. Six candidate yield models: normal, beta, Weibull, inverse hyperbolic sine transformation, a mixture of normals, and kernel density estimators are applied to Branch County corn yields after detrending nonstationary yield data. Goodness-of-fit results for normal, beta and Weibull distributions show that Weibull best fits county yields. The method for simulating farm yields is illustrated using kernel density estimates."

I never realized until now that Springsteen's "Glory Days" is about a drunken loser.

Swoon

GTAP refresher material

For every 1% cut to a nation's primary balance, GDP drops by 0.5%. However, when interest rates are already low, when the currency cannot depreciate, and when there is simultaneous austerity among trading partners, the hit to GDP rises closer to 2%.

Policy Report including contributions by FAO, IFAD, IMF,OECD, UNCTAD, WFP, the World Bank, the WTO, IFPRI and the UN HLTF

Up to 4km coastline expansion. Lowering/removing of dikes.

"The results show that there was a significant increase in agricultural productivity, by an average of 10.1 bags per hectare of land (70 percent expansion), as a result of the MVP. This increase in agricultural productivity could be attributed to higher input usage (mainly improved seeds and fertilizer). Nevertheless, the overall household income effect was insignificant. These results have great implications for the achievement of the objective of poverty reduction as envisaged by the MVP and the “big push” proponents. The lack of a significant effect on income can be mainly explained by two factors: (i) the small size of land and large families, which makes that the additional outcomes derived from productivity gains are mainly allocated to self-consumption; and (ii) over-reliance on agriculture, which, prevented the creation of positive synergies with other sectors for income generation. Our results call for paying considerable attention to the diversification of economic activities among smallholders and for revising the basic assumptions (about the relationship between productivity, income, savings and investments) on which the MVP, and many other rural development policies, rely."

abstract: "People often wonder why economists analyze models whose assumptions are known to be false, while economists feel that they learn a great deal from such exercises. We suggest that part of the knowledge generated by academic economists is case-based rather than rule-based. hat is, instead of offering general rules or theories that should be ontrasted with data, economists often analyze models that are “theoretical cases”, which help understand economic problems by drawing analogies between the model and the problem. According to this view, economic models, empirical data, experimental results and other sources of knowledge are all on equal footing, that is, they all provide cases to which a given problem can be compared. We offer some complexity arguments that explain why case-based reasoning may sometimes be the method of choice; why economists prefer simple examples; and why a paradigm may be useful even if it does not produce theories."

I don't communicate with Rubinstein very often, but each time I do you can bet that he'll remind me of this awesome list!

Ward WA, Deren BJ, D'Silva EH (1991)

"The questions this report seeks to answer are how an organization that manages public funds for research and extension could sustain organizational innovations over extended periods, and how it could learn and adapt to maximize its impact on the agricultural innovation system. Previous studies found that human resources, organizational cultures and governance structures are three of the most important factors influencing institutional change and innovative capabilities. Despite their importance, these factors have been largely neglected in the literature on agricultural research and extension policies. This document analyzes what role these factors played in the Mexican experience"

Abstract: "Scenarios play a prominent role in policy debates over climate change, but questions continue about how best to use them. We describe a new analytic method, based on robust decision making, for suggesting narrative scenarios that emerge naturally from a decision analytic framework. We identify key scenarios as those most important to the choices facing decision makers and find such cases with statistical analysis of datasets created by multiple runs of computer simulation models. The resulting scenarios can communicate quantitative judgments about uncertainty as well as support a well-defined decision process without many drawbacks of current approaches. We describe an application to long-term water planning in California."

Source: The World Bank (forthcoming). Economic Evaluation of Climate Change Adaptation Projects: Approaches for the Agricultural Sector and Beyond. Washington, DC: The World Bank.

"Agricultural production and support in Canada, the United States, and the European Union are highly concentrated on larger farms, which have higher income levels than the average of all farms. Smaller farms, though, are more dependent on support (in particular, payments) which accounts for a larger share of their gross receipts. As payments to farmers are more equally distributed than production, government support reduces income inequality by farm size and farm type. This study, carried out in the context of the OECD Network for Farm Level Analysis, concludes that improved efficiency and equity of policies will require better targeting of income support and, in turn, better information on the income and wealth situation of the agricultural population."

"Recent years have witnessed a sharp increase in many commodity prices. This report examines the question of whether commodity price volatility has materially changed with the rapid run up in world prices in 2006-09, followed by an equally sharp decline in many commodity prices. The report analyses international price volatility for selected agricultural commodities over the past half-century and their relationship with crude oil, fertiliser and the euro-dollar exchange rates. The analysis utilises different data sources, frequency of price observations, periods of observation, price volatility measures and a number of statistical tests to examine the various dimensions of the issue."

"This paper looks at commodity stocks, their role in price determination for storable commodities, and past efforts of international stockholding arrangements with economic provisions in stabilising world prices. Low stocks to use ratios of recent years were one of a number of contributory factors to the grain price spike in 2007-08, the paper finds. However, the experience with past international commodity agreements (ICAs) with price band provisions and stockholding obligations suggests that they had only limited success in reducing the volatility of the prices they set out to stabilise, as well as being prone to many other operational problems. The paper also suggests that as a possible response to apparently inadequate private storage, public sector storage would be costly, ineffective in countering price spikes once stocks are fully exhausted, and would crowd out private storage. Some market-based approaches to countering food price volatility are also examined as alternatives to commodity storage."

"Over the last twenty years, both crop production and agricultural payments have shifted toward larger operations. This study examines whether payments from federal farm programs contributed to increased concentration of cropland and farmland. Using zip code–level data constructed from the microfiles of the 1987–2002 agriculture censuses we examine the association between government payments per acre and subsequent growth in land concentration. A semiparametric generalized additive model (GAM) controls for location and historical concentration, sales per acre, and ratio of cropland area to zip code area. Findings indicate, both with and without nonparametric controls, government payments are strongly associated with subsequent concentration growth."

"The objective of this project is to develop a Western Canadian
corn market model to be included in the Agriculture and Agri-Food Canada (AAFC), Food and Agriculture Regional Model (FARM). Corn has gained importance recently in the feed grain market in Western Canada. The substantial increase in livestock production, rise in malting barley exports, increased incidence of fusarium in Manitoba and the recent drought conditions have significantly contributed to the rapid reduction of the feed grain surplus in this region of Canada. As a result, corn imports from the United States have become the safety valve of this market in Western Canada. For these reasons, a detailed analysis of the Western Canadian feed grain and livestock markets cannot be undertaken without incorporating a corn component."

"In this report we investigate the price linkage between farm and retail prices for eight agricultural commodities in Canada: beef, pork, eggs, chicken, milk, cheese, butter, ice cream. Our purpose is to measure summary statistics, specifically elasticities, that relate the farm commodity to the retail commodity. The theoretical framework for this study is based on standard demand and supply relationships for both the farm and retail sectors, and the equilibrium is solved under general competitive conditions. The empirical model developed allows for non-market clearing conditions (i.e., inventories) and for dynamic adjustments to shocks in the farm and retail sectors."

"This paper shows that the market price received by farmers is determined by aggregate supply and demand forces. Yield increases, on-farm cost savings and improvements in transportation and storage lead to an outward shift of the aggregate supply curve. Since the outward shift in this curve has been greater than the outward shift in demand, agricultural prices have generally fallen over the last 50 to 100 hundred years. Despite this falling price, some agricultural producers are able to earn a positive economic profit due to their relatively low costs of production. Since these producers generally establish the values in the land market, the higher cost agricultural producers typically earn little or no economic profit when land is evaluated at market values. These producers may also find it difficult to adopt technologies that will allow them to remain cost competitive. Investments in one region (whether by producers, governments or agribusiness firms) to lower costs and increase yield typically result in lower price–cost margins in other regions, which then typically respond by undertaking their own investment. This investment game is one of the reasons for the continued shift out of the aggregate supply curve and the falling price of agricultural commodities."

"A complex system is a system composed of many interacting parts, often called agents, which displays collective behavior that does not follow trivially from the behaviors of the individual parts. Examples include condensed matter systems, ecosystems, stock markets and economies, biological evolution, and indeed the whole of human society. Substantial progress has been made in the quantitative understanding of complex systems, particularly since the 1980s, using a combination of basic theory, much of it derived from physics, and computer simulation. The subject is a broad one, drawing on techniques and ideas from a wide range of areas. Here I give a survey of the main themes and methods of complex systems science and an annotated bibliography of resources, ranging from classic papers to recent books and reviews."

Huisman, R., Koedijk, K. C., Kool, C. J. M. and Palm, F. (2001) Tail-index estimates in small samples, Journal of Business and Economic Statistics, 19(1), 208-211.

Roger M. Cooke and Daan Nieboer