Export Promotion through Exchange Rate Policy: Exchange Rate Depreciation or Stabilization?

Exchange rate movements affect exports in two ways -- its depreciation and its variability (risk). A depreciation raises exports, but the associated exchange rate risk could offset that positive effect. The present paper investigates the net effect for eight Asian countries using a dynamic conditional correlation bivariate GARCH-M model that simultaneously estimates time varying correlation and exchange rate risk. Depreciation encourages exports, as expected, for most countries, but its contribution to export growth is weak. Exchange rate risk contributes to export growth in Malaysia and the Philippines, leading to positive net effects. Exchange rate risk generates a negative effect for six of the countries, resulting in a negative net effect in Indonesia, Japan, Singapore, Taiwan and a zero net effect in Korea and Thailand. Since the negative effect of exchange rate risk may offset, or even dominate, positive contributions from depreciation, policy makers need to reduce exchange rate fluctuation along with and possibly before efforts to depreciate the currency.

Nitrate leaching from Kentucky bluegrass soil columns predicted with anion exchange membranes

Ideal nitrogen (N) management for turfgrass supplies sufficient N for high-quality turf without increasing N leaching losses. A greenhouse study was conducted during two 27-week periods to determine if in situ anion exchange membranes (AEMs) could predict nitrate (NO3-N) leaching from a Kentucky bluegrass (Poa pratensis) turf grown on intact soil columns. Treatments consisted of 16 rates of N fertilizer application, from 0 to 98 kg N ha-1 mo-1. Percolate water was collected weekly and analysed for NO3-N. Mean flow-weighted NO3-N concentration and cumulative mass in percolate were exponentially related (pseudo-R2=0.995 and 0.994, respectively) to AEM desorbed soil NO3-N, with a percolate concentration below 10 mg NO3-N L-1 corresponding to an AEM soil NO3-N value of 2.9 micro g cm-2 d-1. Apparent N recovery by turf ranged from 28 to 40% of applied N, with a maximum corresponding to 4.7 micro g cm-2 d-1 AEM soil NO3-N. Turf colour, growth, and chlorophyll index increased with increasing AEM soil NO3-N, but these increases occurred at the expense of increases in NO3-N leaching losses. These results suggest that AEMs might serve as a tool for predicting NO3-N leaching losses from turf.

Relationship of Turfgrass Growth and Quality to Soil Nitrate Desorbed from Anion Exchange Membranes

Anion exchange membranes (AEMs) are a potential method for determining the plant available N status of soils; however, their capacity for use with turfgrass has not been researched extensively. The main objective of this experiment was to determine the relationship between soil nitrate desorbed from AEMs and growth response and quality of turfgrass managed as a residential lawn. Two field experiments were conducted with a bluegrass-ryegrass-fescue mixture receiving four rates of N fertilizer (0, 98, 196, and 392 kg N ha(-1) yr(-1)) with clippings returned or removed. The soils at the two sites were a Paxton fine sandy loam (coarse-loamy, mixed, active, mesic Oxyaquic Dystrudepts) and a variant of a Hinckley gravelly sandy loam (sandy-skeletal, mixed, mesic Typic Udorthents). Anion exchange membranes were inserted into plots and exchanged weekly during the growing seasons of 1998 and 1999. Nitrate-N was desorbed from AEMs and quantified. As N fertilization rates increased, desorbed NO3-N increased. The relationship of desorbed NO3-N from AEMs to clipping yield and turfgrass quality was characterized using quadratic response plateau (QRP) and Cate-Nelson models (C-Ns). Critical levels of desorbed NO3-N ranged from 0.86 to 8.0 microgram cm(-2) d(-1) for relative dry matter yield (DMY) and from 2.3 to 12 microgram cm(-2) d(-1) for turfgrass quality depending upon experimental treatment. Anion exchange membranes show promise of indicating the critical levels of soil NO3-N desorbed from AEMs necessary to achieve maximum turfgrass quality and yield without overapplication of N.

The Real Exchange Rate in Small Open Developed Economies: Evidence from Cointegration Analysis

We examine the effects of the terms of trade and the expected real interest rate differential on the real exchange rate in a sample of small open developed economies. We employ cointegration analysis to search for possible long-term linkages. We find that while both the terms of trade and the expected real interest rate differentials affect the real exchange rate in the long run, the role of the terms of trade generally proves more consistent across countries. The speed of adjustment for the expected real interest rate differential in the error-correction model, however, is quantitatively larger than it is for the terms of trade.

Endogenous Growth in the Presence of Informal Credit Markets: A Comparative Analysis Between Credit Rationing and Self-Revelation Regimes

This paper examines whether the presence of informal credit markets reduces the cost of credit rationing in terms of growth. In a dynamic general equilibrium framework, we assume that firms are heterogenous with different degrees of risk and households invest in human capital development. With the help of Indian household level data we show that the informal market reduces the cost of rationing by increasing the growth rate by 0.7 percent. This higher growth rate, in the presence of an informal sector, is due to the ability of the informal market to separate the high risk from the low risk firms thanks to better information. But even after such improvement we do not get the optimum outcome. The findings, based on our second question, suggest that the revelation of firms' type, based on incentive compatible pricing, can lead to almost 2 percent higher growth rate as compared to the credit rationing regime with informal sector.