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Policy Cost (policy + cost)

Distribution by Scientific Domains
Humanities and Social Sciences60%
Business, Economics, Finance and Accounting40%

Selected Abstracts

Optimising the policy cost of market stabilisation: Which commodity matters most in Ethiopia?

JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 3 2009
Kindie Getnet
Abstract Unprecedented food crop price spikes in recent years prompted the Ethiopian government to impose grain export ban and to distribute grain stocks as price stabilization strategies. Successful price stabilization and size of public spending for such programs depend, to a large extent, on the choice and targeting of stabilization strategies. In a situation where a single commodity plays a leadership role in the price dynamics of other crops, targeting intervention at such a commodity would provide a useful mechanism to reduce policy cost of price stabilization while achieving commodity-wide stabilization objectives. Using multiple cointegration analysis techniques to generate knowledge useful in targeting price stabilization intervention, this study investigates whether there is a single food crop in Ethiopia, among the three major ones (teff, wheat, and maize), with an exclusive price leadership role in the price formation process of the rest. The results show that maize price plays a leadership role in the dynamics of teff and wheat prices at all markets studied, except that of Addis Ababa teff market. Given the major evidence of a price leadership role of maize, it might be possible to achieve commodity-wide price stabilization objectives through targeting intervention on maize. Such targeted intervention may also prove efficiency in terms of reducing policy cost and public spending. Copyright © 2008 John Wiley & Sons, Ltd. [source]

Nominal Wage Flexibility, Wage Indexation and Monetary Union,

THE ECONOMIC JOURNAL, Issue 508 2006
Lars Calmfors
Membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. This counteracts the stabilisation policy cost of giving up monetary independence. But more wage flexibility is only an imperfect substitute for an individual monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing because of the accompanying rise in price variability. The interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full-indexation equilibrium. [source]

Reconfiguring ,post-socialist' regions: cross-border networks and regional competition in the Slovak and Ukrainian clothing industry

GLOBAL NETWORKS, Issue 3 2008
ADRIAN SMITH
Abstract The global garment industry is currently being reshaped in dramatic ways through processes of trade liberalization, delocalization and interfirm and interregional competition. There has been much speculation about the increasing importance of factor (especially labour) costs in fuelling further rounds of de-localization of garment production towards low-cost production locations, such as China and India. However, the extent to which these processes mean the end to garment production in higher factor-cost locations, including those neighbouring the major clothing markets of the USA and the EU, is open to question. In this article we interrogate the interregional shifts in garment sourcing taking place in Europe and its surrounding regions. While factor costs (including labour) are important determinants of the geography of sourcing, a range of other costs (logistical and policy costs) are important in structuring the geographies of global and regional production. Firms in the Slovak Republic are responding to increasing competitive pressures and we assess how trans-border sourcing, subcontracting and FDI are being integrated into strategies to sustain European production networks. We highlight the emergence of cross-border production relocation to Ukraine as one specific strategy. We examine the product specificity of these changes and the ways in which they are embedded within already existing production networks, forms of cross-border contracting and central European trade regimes. In other words, we explore some of the forces that shape the somewhat tentative continuation of garment production for export to EU markets in central Europe despite the ,spectre of China'. [source]

Some Economics of Safe Injecting Rooms

THE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2001
Harry Clarke
Provision of safe injecting rooms (SIRs), needle exchanges and other harm minimisation schemes reduce mortality and other health risks that illicit drug users experience. However, SIRs diminish incentives to refrain from the use of drugs by reducing the risk of a key harmful consequence of use, namely the user's death. Moreover, such harm minimisation efforts are socially costly. Economic approaches to drug management balance benefits from harm minimisation against policy costs and the costs associated with a failure of community drug abstinence. This article shows that the economic case for SIRs disappears with conservative assumptions about adverse incentive effects of reduced mortality risks even when only modest weight is placed on drug abstinence objectives. [source]