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This paper proposes a novel approach of classifying and modeling the nonlinear behavior of commodity prices using regime-switching models with exogenous transition variables. The approach rests on using the International Commercial Terms (Incoterms), also known as border prices, to classify commodities in groups that tend to display similar dynamics. The suggested border price classification is useful in identifying the key exogenous driving variables in each group. In particular, the classification suggests that inflation and oil price are the best transition candidates that are capable of capturing the nonlinear dynamics of free on board (FOB) and cost insurance and freight (CIF) prices respectively. Our statistical linearity tests and estimation results confirm this prediction and highlight the importance of the suggested border price classification in improving our understanding of the behavior of commodity prices. [ABSTRACT FROM AUTHOR]

The main objective of the paper is to contribute to practical applicability of the CBA in the agricultural sector by exploring the chances to estimate Czech social values of selected agricultural commodities using available statistical data. More specifically, we try to analyse for which commodities secondary data sets are available from which we may deduce the estimates of shadow price ratios, then to estimate SPRs for selected agricultural commodities and to analyse and discuss the applicability of such estimates in practical appraisal with respect to theoretically ideal measures and resulting available measures as well as with respect to the situation in which the CBA analyst typically is. We selected the following commodities: poultry, pigs, bulls, milk, rapeseed, maize, barley and wheat as items more suitable for SPR estimates mostly because of the data availability and the internal homogeneity of the items, which was closer to the theoretically required values than for other commodities. Under additional simplifying assumptions, we estimated SPR proxies for the particular commodities and finally summarized the pros and cons for application of SPR alternatives. [ABSTRACT FROM AUTHOR]

This paper measures the impact of North American Free Trade Agreement-induced real border price changes of Mexican imports and exports on wages and employment of agricultural workers in Mexico. I find that changes in real border prices of crops did not affect agricultural wages. On the other hand, increases in the real price of vegetables (main agricultural export) were associated with an increase in employment in the cultivation of vegetables, whereas the drop in the real price of corn (main agricultural import) reduced the employment in the corn sector. This is in line with the predictions of neoclassical trade theory: in the absence of mobility costs or sector-specific skills, factors moved smoothly from import-competing sectors into export-competing sectors. Copyright © 2012 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper investigates the nonlinearities in commodity prices using smooth transition regression (STR) models. What distinguishes this paper from the majority of the studies in the smooth transition literature is its use of exogenous transition variables, in addition to the standard autoregressive lags of the dependent variable, in modelling the regime switching behavior of commodity prices. Two exogenous transition variables were found successful in capturing the regime switching behavior of commodity prices: inflation rate and oil price. Inflation rate was capable of capturing the early dynamics (between 1900 and 1950) of the commodity index whereas oil price captured the late ones (between 1970 and 2007). This result motivates the use of common exogenous threshold variables in regime switching models in general and, in particular, the use of inflation and oil price in the STR model when applied to an index of commodity prices. The paper also provides further insight on the issue of co-movement of commodity prices by classifying individual commodities into groups according to their border price (an issue that has been ignored in previous studies on commodity prices), and then trying to find the best common transition variable that can explain the dynamic behavior of each group. The results show that, for traded commodities, individual price series recorded on a free on board basis are driven by macroeconomic news in the exporting country. On the other hand, individual price series recorded on a cost and freight basis are driven by oil price and macroeconomic news variables in the importing country. [ABSTRACT FROM AUTHOR]

This paper looks at Professor Mirlees' important contribution to the theory and practice of project evaluation. Despite the apparent relevance of this work to practical policy making, the approach has had only limited application. The paper explores why the Little-Mirrlees' technique of project evaluation has been less widely used than was initially anticipated. Given this disappointing use, the paper argues that Professor Mirrlees' main contribution to economic policy lay in the powerful support his work gave to trade liberalization. [ABSTRACT FROM AUTHOR]