Decline In Relative Price Research Articles

Exploring the Impact of Robotisation on Economic Development

This paper speculates about the impact of robotisation on the world economy in the next 20 years. It is argued that though robotisation of sectors destroys jobs and thereby unleashes recessionary tendencies, Artificial Intelligence (AI) enables entrepreneurs, managers and workers to make more efficient use of their time and thereby leads to an increase in time available for consumption. We highlight that in any given sector, robotisation spreads because of its greater cost efficiency as compared to conventional production. But this development by itself would lead to a decline in relative prices of products supplied by a sector and through income effects stimulate consumption. Thus, in the wake of robotisation, the recessionary tendencies emerging from the destruction of jobs are pitted against the expansionary tendencies emerging from AI facilitated increase in consumption time and the mentioned fall in relative prices. Therefore, both increased and decreased economic activity are possible but a boom is likely, given increase in demand for time and labour-intensive services. Generation of frictional unemployment with labour shifting from rapidly robotising sectors to others and possible burgeoning inequality would necessitate globally coordinated basic income schemes funded by a global robot tax.

Thorny Roses: A Peep into the Robotised Economic Future

This paper speculates about the impact of robotisation on the world economy in the next 20 years beyond which technological developments are difficult to anticipate. It is argued that though robotisation of sectors destroys jobs and thereby unleashes recessionary tendencies, Artificial Intelligence (AI) enables entrepreneurs, managers and workers to make more efficient use of their time (i.e. a given task can now be completed more quickly) and thereby leads to an increase in time available for consumption. We highlight that in any given sector (consisting of all firms producing a particular product or a class of similar products) robotisation spreads because of its greater cost efficiency as compared to conventional production. But this development by itself would lead to a decline in relative prices of products supplied by a sector and through income effects stimulate consumption of other products. Thus, in the wake of robotisation, the recessionary tendencies emerging from the destruction of jobs are pitted against the expansionary tendencies emerging from AI facilitated increase in consumption time and the mentioned fall in relative prices. Thus, all combinations of increased/decreased aggregate employment and increased/decreased national income are possible as economic outcomes. Generation of frictional unemployment with labour shifting from rapidly robotising sectors to others (reaping the advantages of enhanced consumption time) and possible burgeoning inequality would imply a need for national and global governments to provide succour to those rendered unemployed or impoverished through basic income schemes.

Management of Leaf Rust Disease by Household Coffee Farmers in India: Evidence and Implications for Price and Income Effects on Chemical Control

Coffee leaf rust (CLR) is a major disease that affects the production of Arabica coffee. Its management for coffee plant protection is economically costly because it depends on purchase of market-priced inputs and output from coffee cultivation. This paper focuses on estimation of price and income determinants of management of CLR, as they are related to the application of chemical control or fungicides (Bordeaux mixture and systemic fungicides), by using a newly collected sample household survey data on 575 (comprising 90 % of small) Arabica coffee farmers in traditional coffee-growing regions of India and by applying binary logit models. Estimates show that the own-price elasticity of probability is negative and stronger than positive income effects by chemical control. Cross-price effect shows that the systemic fungicides are a substitute for Bordeaux mixture and probability of applying Bordeaux mixture is higher as compared to the systemic fungicides. Surprisingly, a decline in relative price of Bordeaux mixture shows complementarity between the fungicides. These results offer empirical explanation for economic relationships between fungicides in terms of complementarity and substitutability under different price situations and imply a need for public policy for promotion of recommended chemical control through selective subsidization for chemical inputs for small coffee farmers. These interdisciplinary results and implications are relevant for other Arabica coffee-growing Asian and African countries.

Causes of Output Decline in Economic Transition: The Case of Central and Eastern European Agriculture

This paper analyzes how policy reforms and other factors have effected agricultural output in Central and Eastern Europe since 1989. Price liberalization and subsidy cuts caused a decline in relative prices for agriculture, contributing to almost half of the output decline. Transition uncertainty and severe drought each caused an average output fall of around 10%. Privatization, farm restructuring, and the associated disruptions affected output through input adjustments and production efficiency changes. Their impact differs between countries, as it is conditional on initial conditions and reform and liberalization in the rest of the economy.J. Comp. Econom., March 2000, 28(1), pp. 172–206. University of California, Berkeley, California 94720; Katholieke Universiteit Leuven, Belgium; European Commission, Brussels, Belgium.

食の洋風化定着過程における小麦需給変容の政策分析

In the process of Japan's rapid economic growth wheat market transformed dramatically, and wheat imports increased rapidly. One of the most effective factors that caused the transformation is the westernization of food life, in particular, the spread of breads. Although a large number of studies have been made on this, little is known about the relation between the westernization of food life and food pricing policies. In order to investigate the relation, I classify Hard Wheat, which is used as the material of breads, and Soft Wheat, which is used as the material of typical Japanese noodle, and then I develop a econometric model with simulating the pricing policy.The findings are as follows;1) The Hard Wheat demand increased as a result of income growth and the decline in the relative government selling price of wheat to rice. A third of demand increase from 1961 to 1968 is explained by income growth, and two-thrids by the decline in relative price. A third of decline in relative price is explained by the increase of government buying price of rice, and two-thrids by the increase of imports under budget pooling scheme of government wheat control.2) The paper specified three paths that led to the rapid increase of wheat imports. The food pricing policy induced the path through which the increase in the government purchasing rice price led to the expansion of both wheat demands. Through this path, Hard Wheat responded more sensitive to the decline in relative price than Soft Wheat, and it contributed to the rapid increase of wheat import.

A Note on the Golden Age of Advertising

A VIEW widely held among members of the advertising profession, as well as among academic observers of the advertising industry, is that advertising expenditures have never regained the levels of relative importance that they achieved prior to 1930. Relative importance in this case is measured in terms of the ratio of advertising expenditures to gross national product or some other index of aggregate economic activity. The commonly accepted position is that advertising first declined in relative importance during the great depression and during World War II and then rose steadily after 1945 until recent years but has never returned to its pre-1930 levels. Advertising men, on the one hand, tend to react to these data by bemoaning the fact that their industry has never regained the golden days of the 1920's. Or they anticipate with some relish the rewards that would be found if their golden age were repeated. Academicians, on the other hand, tend to react by inquiring into the factors which have led to this long-term decline.' They have usually found the explanation in greater efficiency, resulting in a decline in relative prices. This decline in relative prices, it is held, has led to larger physical quantities of advertising being consumed but to smaller relative quantities when converted to value terms. This is a somewhat surprising state of affairs in view of the apparent ubiquity of advertising today and because most of the reasons usually ascribed to the relative rise of advertising over the last two decades (see below) have been operative for prior decades as well. This anomaly suggests the possibility of some error or bias in the underlying data and has led me to an examination of the basic series from which these conclusions are drawn.2 The primary series invariably used to describe the behavior of advertising expenditures is the series presented periodically in Printers' Ink and prepared by the Central Research Department of McCann-Erickson, Inc.3 Since 1953, it has been published yearly in the Printers' Ink Advertisers' Annual, and its successor publication. In earlier years, the series as it was developed was published in sporadic issues of Printers' Ink. As we can see from Table 1, the original estimates of aggregate advertising expenditures for various years have been raised over time. But there is a general pattern to be found-the estimates for the 1930's were ultimately raised relatively little while the estimates for the late 1920's were raised quite drastically. At the time the final round of revisions were put into effect no explanation was given for this disparity in treatment. Further, the data relating to 1935 and