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Full-Text Articles in Social and Behavioral Sciences
Industrial Output Fluctuations In Developing Countries: General Equilibrium Consequences Of Agricultural Productivity Shocks, Iona Hyojung Lee
Industrial Output Fluctuations In Developing Countries: General Equilibrium Consequences Of Agricultural Productivity Shocks, Iona Hyojung Lee
Research Collection School Of Economics
This paper shows that a negative shock to agricultural productivity may increase food prices, and labor and capital can move away from manufacturing into agriculture to meet the subsistence requirement for food. This effect depends on income levels and openness to trade. Using annual manufacturing data and rainfall shocks as the instrument for crop yields (proxy for agricultural productivity), I find that an exogenous decline in yield decreases manufacturing output as well as employment and capital investment in manufacturing. Overall, crop yield variation can explain up to 44% of industrial output fluctuations in developing countries (rainfall shocks cause 31% of …
Non-Fundamental Expectations And Economic Fluctuations: Evidence From Professional Forecasts, Keen Meng Choy, Kenneth Leong, Anthony S. Tay
Non-Fundamental Expectations And Economic Fluctuations: Evidence From Professional Forecasts, Keen Meng Choy, Kenneth Leong, Anthony S. Tay
Research Collection School Of Economics
It is theoretically possible that non-fundamental idiosyncratic shocks to agents’ rational expectations are a source of economic fluctuations. Studies using data on consumer and investor sentiment suggest that this is indeed an important source of fluctuations. We present the results of a study that uses forecasts from professional forecasters to extract non-fundamental shocks to expectations. In contrast to previous studies, we show that non-fundamental expectations are not a significant source of output fluctuations, although such shocks contributed to inflation.