Volume 3, Issue 1

This paper contributes to ongoing debates on international income comparisons by decomposing the income distribution functions for the United States and Canada over the period 1993 - 2000 using finite mixtures. We also conduct tests for equality, first, second and third order stochastic dominance to determine which, if either, country might exhibit greater social welfare, which in our baseline case we model simply as expected utility. Overall, our results suggest that Canada exhibits higher social welfare than U.S., principally because it exhibits lower income inequality, thereby confirming a conjecture by Joseph Stiglitz which was the motivation for our study.

The theoretical and empirical effects of remittance inflows on output volatility are ambiguous. On the one hand, remittances have been remarkably stable compared to other inflows, and they seem to be compensatory in nature, rising when the home country’s economy suffers a downturn. On the other hand, the labor supply effects induced by altruistic remittances could cause the output effects associated with technology shocks to be magnified. Based on a sample of 70 remittance-recipient countries, we find that remittances have a negative effect on output growth volatility, thereby supporting the notion that remittance flows are a stabilizing influence on output.

Much African land currently has low productivity and has attracted investors leasing land as a speculative option on higher future prices or productivity. To be beneficial land deals need to induce productivity enhancing investments. Some of these will be publicly provided (infrastructure, agronomic knowledge), and some can only be provided by ‘pioneer’ investors who discover what works and create demonstration effects. Such pioneers can be rewarded for the positive externalities they create by being granted options on large areas of land. However, pioneers must be separated from speculators by screening and by requirements to work a fraction of the land.

Using a unique dataset obtained from rural Andhra Pradesh, India that contains direct observations of household access to credit and detailed time use, results of this study indicate that credit market failures result in a substantial reallocation of time use pattern by children, leading to a significant increase in remunerative work and a similarly significant decrease in leisure time. While the direct impact on schooling time per se does not appear to be large, longer work and shorter leisure could arguably constrain effective learning opportunities of children, hampering human capital formation.

This paper examines the potential benefits and costs of providing duty-free-quota-free market access to the least developed countries and the effects of extending eligibility to other poor countries. Using the MIRAGE computable general equilibrium model, it assesses the impact of scenario involving different levels of product coverage, recipient countries, and preference-giving countries. The main goals of this paper is to highlight the role that rich and emerging countries could play in helping poor countries, to assess the costs and benefits for developing countries and whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries.