An evaluation of exchange rate policy and economic adjustment in Nicaragua, 1993--1995

Since the late 1970's, but particularly since the mid-1980s, the economy of Nicaragua has had persistent and large macroeconomic imbalances, while GDP per-capita has declined to 1950s' levels. By the second half of the 1990s, huge fiscal deficits and a reduction of foreign financing resulted in record hyperinflation. The Sandinista government's (1979–1990) harsh stabilization program in 1988–89 had only modest and short-lived success. It was doomed by their inability to lower the public sector deficit due to the war, plus diminishing financial support from abroad. Hyperinflation stopped only after their 1990 electoral defeat ended the war and massive aid began to flow in. Five years later, macroeconomic stability is still very fragile. A sluggish recovery of export agriculture plus import liberalization, have impeded a reduction of huge trade and current account deficits. Facing the prospects of diminished aid flows, the government's strategy has hinged on the achievement of a real devaluation through a crawling-peg adjustment of the nominal rate. However, at the end of 1995 the situation of the external accounts was still critical, and the modest progress achieved was attributable to cyclical terms-of-trade improvement and changes in the political outlook of agricultural producers. Using a Computable General Equilibrium Model and a Social Accounting Matrix constructed for this dissertation, the importance of structural rigidities in production and demand in explaining such outcome is shown. It is shown that under the plausible structural assumptions incorporated in the model, the role of devaluation in the adjustment process is restricted by structural rigidities. Moreover, contrary to the premise of the orthodox economic thinking behind the economic program, it is the contractionary effect of devaluation more than its expenditure-switching effects that provide the basis for is use in solving the external sector's problems. A fixed nominal exchange rate is found to lead to adverse results. The broader conclusion that emerges from the study is that a new social compact and a rapid increase in infrastructure spending plus fiscal support for the traditional agro-export activities is at the center of a successful adjustment towards external viability in Nicaragua. ^

The political economy of inequality and growth: Essays on sovereign debt, democracy and saving

This dissertation addresses three issues in the political economy of growth literature. The first study empirically tests the hypothesis that income inequality influences the size of a country's sovereign debt for a sample of developing countries for the period 1970–1990. The argument examined is that governments tend to yield to popular pressures to engage in redistributive policies, partially financed by foreign borrowing. Facing increased risk of default, international creditors limit the credit they extend, with the result that borrowing countries invest less and grow at a slower pace. The findings do not seem to support the negative relationship between inequality and sovereign debt, as there is evidence of increases in multilateral, countercyclical flows until the mid 1980s in Latin America. The hypothesis would hold for the period 1983–1990. Debt flows and levels seem to be positively correlated with growth as expected. ^ The second study empirically investigates the hypothesis that pronounced levels of inequality lead to unconsolidated democracies. We test the existence of a nonmonotonic relationship between inequality and democracy for a sample of Latin American countries for the period 1970–2000, where democracy appears to consolidate at some intermediate level of inequality. We find that the nonmonotonic relationship holds using instrumental variables methods. Bolivia seems to be a case of unconsolidated democracy. The positive relationship between per capita income and democracy disappears once fixed effects are introduced. ^ The third study explores the nonlinear relationship between per capita income and private saving levels in Latin America. Several estimation methods are presented; however, only the estimation of a dynamic specification through a state-of-the-art general method of moments estimator yields consistent estimates with increased efficiency. Results support the hypothesis that income positively affects private saving, while system GMM reveals nonlinear effects at income levels that exceed the ones included in this sample for the period 1960–1994. We also find that growth, government dissaving, and tightening of credit constraints have a highly significant and positive effect on private saving. ^

Exploring the role of large predators in marsh food webs: evidence for a behaviorally-mediated trophic cascade

The influence of large predators on lower trophic levels in oligotrophic, structurally complex, and frequently disturbed aquatic environments is generally thought to be limited. We looked for effects of large predators in two semi-permanent, spikerush-dominated marshes by excluding large fish (>12 mm body depth) and similarly sized herpetofauna from 1 m2 cages (exclosures) for 2 weeks. The exclosures allowed for colonization by intermediate (in size and trophic position) consumers, such as small fish, shrimp, and crayfish. Exclosures were compared to control cages that allowed large fish to move freely in and out. At the end of the experiment, intermediate-consumer densities were higher in exclosures than in controls at both sites. Decapod crustaceans, especially the riverine grass shrimp (Palaemonetes paludosus), accounted for the majority of the response. Effects of large fish on shrimp were generally consistent across sites, but per capita effects were sensitive to estimates of predator density. Densities of intermediate consumers in our exclosures were similar to marsh densities, while the open controls had lower densities. This suggests that these animals avoided our experimental controls because they were risky relative to the surrounding environment, while the exclosures were neither avoided nor preferred. Although illuminating about the dynamics of open-cage experiments, this finding does not influence the main results of the study. Small primary consumers (mostly small snails, amphipods, and midges) living on floating periphyton mats and in flocculent detritus (“floc”) were less abundant in the exclosures, indicative of a trophic cascade. Periphyton mat characteristics (i.e., biomass, chlorophyll a, TP) were not clearly or consistently affected by the exclosure, but TP in the floc was lower in exclosures. The collective cascading effects of large predators were consistent at both sites despite differences in drought frequency, stem density, and productivity.

Non -traded goods, product differentiation and integration of factor markets

This research sought to determine the implications of a non-traded differentiated commodity produced with increasing returns to scale, for the welfare of countries that allowed free international migration. We developed two- and three-country Ricardian models in which labor was the only factor of production. The countries traded freely in homogeneous goods produced with constant returns to scale. Each also had a non-traded differentiated good sector where production took place using increasing returns to scale technology. Then we allowed for free international migration between two of the countries and observed what happened to welfare in both countries as indicated by their per capita utilities in the new equilibrium relative to their pre-migration utilities. ^ Preferences of consumers were represented by a two-tier utility function [Dixit and Stiglitz 1977]. As migration took place it impacted utility in two ways. The expanding country enjoyed the positive effect of increased product diversity in the non-traded good sector. However, it also suffered adverse terms-of-trade as its production cost declined. The converse was true for the contracting country. To determine the net impact on welfare we derived indirect per capita utility functions of the countries algebraically and graphically. Then we juxtaposed the graphs of the utility functions to obtain possible general equilibria. These we used to observe the welfare outcomes. ^ We found that the most likely outcomes were either that both countries gained, or one country lost while the other gained. We were, however, able to generate cases where both countries lost as a result of allowing free inter-country migration. This was most likely to happen when the shares of income spent on each country's export good differed significantly. In the three country world when we allowed two of the countries to engage in preferential trading arrangements while imposing a prohibitive tariff on imports from the third country welfare of the partner countries declined. When inter-union migration was permitted welfare declined even further. This we showed was due to the presence of the non-traded good sector. ^

Essays on investment, growth and income distribution

In this dissertation, I examine both theoretically and empirically the relationship between stock prices and income distribution using an endogenous growth model with social status impatience.^ The theoretical part looks into how status impatience and current economic status jointly determine time preference, savings, future economic status, stock prices, growth and wealth distribution in the steady state. This work builds on Burgstaller and Karayalcin (1996).^ More specifically, I look at (i) the effects of the distribution of status impatience levels on the distribution of steady state assets, incomes and consumption and (ii) the effects of changes in relative levels of status impatience on stock prices. Therefore, from (i) and (ii), I derive the correlation between stock prices, incomes and asset distribution. Also, the analysis of the stack market is undertaken in the presence of adjustment costs to investments.^ The empirical chapter looks at (i) the correlation between income inequality and long run economic growth on the one hand and (ii) the correlation between stock market prices and income inequality on the other. The role of stock prices and social status is examined to better understand the forces that enable a country to grow overtime and to determine why output per capita varies across countries. The data are from Summers and Heston (1988), Barro and Wolf (1989), Alesina and Rodrik (1994), Global financial Database (1997) and the World Bank. Data for social status are collected through a primary sample survey on the internet. Twenty-five developed and developing countries are included in the sample.^ The model developed in this study was specified as a system of simultaneous equations, in which per capita growth rate and income inequality were endogenous variables. Additionally, stock price index and social status measures were also incorporated. The results indicate that income inequality is inversely related to economic growth. In addition, increase in income inequality arising from higher stock prices constrains growth. Moreover, where social status is determined by income levels, it influences long run growth. Therefore, these results support findings of Persson and Tabellini (1994) and Alesina and Rodrik (1994). ^

A multi-method approach for the assessment of composite indices and rankings

There is growing popularity in the use of composite indices and rankings for cross-organizational benchmarking. However, little attention has been paid to alternative methods and procedures for the computation of these indices and how the use of such methods may impact the resulting indices and rankings. This dissertation developed an approach for assessing composite indices and rankings based on the integration of a number of methods for aggregation, data transformation and attribute weighting involved in their computation. The integrated model developed is based on the simulation of composite indices using methods and procedures proposed in the area of multi-criteria decision making (MCDM) and knowledge discovery in databases (KDD). The approach developed in this dissertation was automated through an IT artifact that was designed, developed and evaluated based on the framework and guidelines of the design science paradigm of information systems research. This artifact dynamically generates multiple versions of indices and rankings by considering different methodological scenarios according to user specified parameters. The computerized implementation was done in Visual Basic for Excel 2007. Using different performance measures, the artifact produces a number of excel outputs for the comparison and assessment of the indices and rankings. In order to evaluate the efficacy of the artifact and its underlying approach, a full empirical analysis was conducted using the World Bank's Doing Business database for the year 2010, which includes ten sub-indices (each corresponding to different areas of the business environment and regulation) for 183 countries. The output results, which were obtained using 115 methodological scenarios for the assessment of this index and its ten sub-indices, indicated that the variability of the component indicators considered in each case influenced the sensitivity of the rankings to the methodological choices. Overall, the results of our multi-method assessment were consistent with the World Bank rankings except in cases where the indices involved cost indicators measured in per capita income which yielded more sensitive results. Low income level countries exhibited more sensitivity in their rankings and less agreement between the benchmark rankings and our multi-method based rankings than higher income country groups.

Integrated assessment of water conservation practices for sustainable management strategies

Miami-Dade County implemented a series of water conservation programs, which included rebate/exchange incentives to encourage the use of high efficiency aerators (AR), showerheads (SH), toilets (HET) and clothes washers (HEW), to respond to the environmental sustainability issue in urban areas. This study first used panel data analysis of water consumption to evaluate the performance and actual water savings of individual programs. Integrated water demand model has also been developed for incorporating property’s physical characteristics into the water consumption profiles. Life cycle assessment (with emphasis on end-use stage in water system) of water intense appliances was conducted to determine the environmental impacts brought by each practice. Approximately 6 to 10 % of water has been saved in the first and second year of implementation of high efficiency appliances, and with continuing savings in the third and fourth years. Water savings (gallons per household per day) for water efficiency appliances were observed at 28 (11.1%) for SH, 34.7 (13.3%) for HET, and 39.7 (14.5%) for HEW. Furthermore, the estimated contributions of high efficiency appliances for reducing water demand in the integrated water demand model were between 5 and 19% (highest in the AR program). Results indicated that adoption of more than one type of water efficiency appliance could significantly reduce residential water demand. For the sustainable water management strategies, the appropriate water conservation rate was projected to be 1 to 2 million gallons per day (MGD) through 2030. With 2 MGD of water savings, the estimated per capita water use (GPCD) could be reduced from approximately 140 to 122 GPCD. Additional efforts are needed to reduce the water demand to US EPA’s “Water Sense” conservation levels of 70 GPCD by 2030. Life cycle assessment results showed that environmental impacts (water and energy demands and greenhouse gas emissions) from end-use and demand phases are most significant within the water system, particularly due to water heating (73% for clothes washer and 93% for showerhead). Estimations of optimal lifespan for appliances (8 to 21 years) implied that earlier replacement with efficiency models is encouraged in order to minimize the environmental impacts brought by current practice.

Recreational Food Service is Big Business

In the analysis - Recreational Food Service Is Big Business - by Gary Horvath, President, Recreational Foodservice Division, Service America Corporation and Mickey Warner, Associate Professor School of Hospitality Management at Florida International University, Horvath and Warner initially state: “Recreational food service is very different from routine food service management. The authors review the market and the management planning and challenges that create that difference.” Recreational food is loosely defined by the authors as food for special events. These can be one-time events, repeated events that are not on a fixed schedule [i.e. concerts], weekly events such as football-baseball-or basketball games, or other similar venues. Concessions are a large part of these fan based settings. “An anticipated 101,000 fans at a per capita spending of $5-6 [were expected]. A typical concessions menu of hot dogs, popcorn, soda, beer, snacks, novelty foods, candy, and tobacco products comprises this market segment,” say Horvath and Warner in reference to the Super-Bowl XXI football championship game, held in Rose Bowl stadium in Pasadena, California, on January 25, 1987. Some of the article is based upon that event. These food service efforts focus on the individual fan, but do extend to the corporate-organizational level as well. Your authors will have you know that catering is definitely a part of this equation. The monies spent and earned are phenomenal. “Special events of this type attract numerous corporate catering opportunities for companies entertaining VIP guest lists,” the authors inform. “Hospitality tents usually consist of a pregame cocktail party and buffet and a post-game celebration with musical entertainment held in lavishly decorated tents erected at the site. In this case a total of 5,000 covers, at a price of $200 each, for 12-15 separate parties were anticipated.” Horvath and Warner also want you to know that novelties and souvenirs make up an essential part of this, the recreational food service market. “Novelties and souvenirs are a primary market and source of revenue for every stadium food service operator,” say Horvath and Warner. The term, “per capita spending is the measurement used by the industry to evaluate sales potential per attendee at an event,” say the authors. Of course, with the solid revenue figures involved as well as the number of people anticipated for such events, planning is crucial, say Horvath and Warner. Training of staff, purchasing and supply, money and banking, facility access, and equipment, are a few of the elements to be negotiated. Through both graphs and text, Horvath and Warner do provide a fairly detailed outline of what a six-step event plan consists of.

Online solid phase extraction liquid chromatography tandem mass spectrometry (SPE-LC-MS/MS) method for the determination of sucralose in reclaimed and drinking waters and its photo degradation in natural waters from South Florida

Background Sucralose has gained popularity as a low calorie artificial sweetener worldwide. Due to its high stability and persistence, sucralose has shown widespread occurrence in environmental waters, at concentrations that could reach up to several μg/L. Previous studies have used time consuming sample preparation methods (offline solid phase extraction/derivatization) or methods with rather high detection limits (direct injection) for sucralose analysis. This study described a faster and sensitive analytical method for the determination of sucralose in environmental samples. Results An online SPE-LC–MS/MS method was developed, being capable to quantify sucralose in 12 minutes using only 10 mL of sample, with method detection limits (MDLs) of 4.5 ng/L, 8.5 ng/L and 45 ng/L for deionized water, drinking and reclaimed waters (1:10 diluted with deionized water), respectively. Sucralose was detected in 82% of the reclaimed water samples at concentrations reaching up to 18 μg/L. The monthly average for a period of one year was 9.1 ± 2.9 μg/L. The calculated mass loads per capita of sucralose discharged through WWTP effluents based on the concentrations detected in wastewaters in the U. S. is 5.0 mg/day/person. As expected, the concentrations observed in drinking water were much lower but still relevant reaching as high as 465 ng/L. In order to evaluate the stability of sucralose, photodegradation experiments were performed in natural waters. Significant photodegradation of sucralose was observed only in freshwater at 254 nm. Minimal degradation (<20%) was observed for all matrices under more natural conditions (350 nm or solar simulator). The only photolysis product of sucralose identified by high resolution mass spectrometry was a de-chlorinated molecule at m/z 362.0535, with molecular formula C12H20Cl2O8. Conclusions Online SPE LC-APCI/MS/MS developed in the study was applied to more than 100 environmental samples. Sucralose was frequently detected (>80%) indicating that the conventional treatment process employed in the sewage treatment plants is not efficient for its removal. Detection of sucralose in drinking waters suggests potential contamination of surface and ground waters sources with anthropogenic wastewater streams. Its high resistance to photodegradation, minimal sorption and high solubility indicate that sucralose could be a good tracer of anthropogenic wastewater intrusion into the environment.

A Suite of Prey Traits Determine Predator and Nutrient Enrichment Effects in a Tri-Trophic Food Chain

Predation, predation risk, and resource quality affect suites of prey traits that collectively impact individual fitness, population dynamics, and community structure. However, studies of multi-trophic level effects generally focus on a single prey trait, failing to capture trade-offs among suites of covarying traits that govern population responses and emergent community patterns. We used structural equation models (SEM) to summarize the non-lethal and lethal effects of crayfish, Procambarus fallax, and phosphorus (P) addition, which affected prey food quality (periphyton), on the interactive effects of behavioral, morphological, developmental, and reproductive traits of snails, Planorbella duryi. Univariate and multivariate analyses suggested trade-offs between production (growth, reproduction) and defense (foraging behavior, shell shape) traits of snails in response to non-lethal crayfish and P addition, but few lethal effects. SEM revealed that non-lethal crayfish effects indirectly limited per capita offspring standing stock by increasing refuge use, slowing individual growth, and inducing snails to produce thicker, compressed shells. The negative effects of non-lethal crayfish on snails were strongest with P addition; snails increased allocation to shell defense rather than growth or reproduction. However, compared to ambient conditions, P addition with non-lethal crayfish still yielded greater per capita offspring standing stock by speeding individual snail growth enabling them to produce more offspring that also grew faster. Increased refuge use in response to non-lethal crayfish led to a non-lethal trophic cascade that altered the spatial distribution of periphyton. Independent of crayfish effects, snails stimulated periphyton growth through nutrient regeneration. These findings illustrate the importance of studying suites of traits that reveal costs associated with inducing different traits and how expressing those traits impacts population and community level processes.