Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets, 2007

Projections of U.S. ethanol production and its impacts on planted acreage, crop prices, livestock production and prices, trade, and retail food costs are presented under the assumption that current tax credits and trade policies are maintained. The projections were made using a multi-product, multi-country deterministic partial equilibrium model. The impacts of higher oil prices, a drought combined with an ethanol mandate, and removal of land from the Conservation Reserve Program (CRP) relative to baseline projections are also presented. The results indicate that expanded U.S. ethanol production will cause long-run crop prices to increase. In response to higher feed costs, livestock farmgate prices will increase enough to cover the feed cost increases. Retail meat, egg, and dairy prices will also increase. If oil prices are permanently $10-per-barrel higher than assumed in the baseline projections, U.S. ethanol will expand significantly. The magnitude of the expansion will depend on the future makeup of the U.S. automobile fleet. If sufficient demand for E-85 from flex-fuel vehicles is available, corn-based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices. The direct effect of higher feed costs is that U.S. food prices would increase by a minimum of 1.1% over baseline levels. Results of a model of a 1988-type drought combined with a large mandate for continued ethanol production show sharply higher crop prices, a drop in livestock production, and higher food prices. Corn exports would drop significantly, and feed costs would rise. Wheat feed use would rise sharply. Taking additional land out of the CRP would lower crop prices in the short run. But because long-run corn prices are determined by ethanol prices and not by corn acreage, the long-run impacts on commodity prices and food prices of a smaller CRP are modest. Cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the Corn Belt under any of the scenarios. This is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of cornbased ethanol. So long as producers can choose between soybeans for biodiesel, switchgrass for ethanol, and corn for ethanol, they will choose to grow corn. Cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial-sized ethanol facility.

Fair pricing of deposit insurance. Is it possible? Yes. Is it desirable? No

This note elaborates on a recent article by Chan, Greenbaum and Thakor(1992) who contend that fairly priced deposit insurance is incompatiblewithfree competition in the banking sector, in the presence of adverseselection.We show here that at soon as one introduces a real economic motivationfromprivate banks to manage the deposits from the public, then fairly priceddeposit insurance becomes possible. However, we also show that sucha fairlypriced insurance is never desirable, precisely because of adverseselection.We compute the characteristics of the optimal premium schedule, whichtradesoff between the cost of adverse selection and the cost of ``unfaircompetition ''.

Efficacy of clinical guideline implementation to improve the appropriateness of chest physiotherapy prescription among inpatients with community-acquired pneumonia

BACKGROUND: Although there is no strong evidence of benefit, chest physiotherapy (CP) seems to be commonly used in simple pneumonia. CP requires equipment and frequently involves the assistance of a respiratory therapist, engendering a significant medical workload and cost. AIM: To measure and compare the efficacy of two modalities of chest physiotherapy (CP) guideline implementation on the appropriateness of CP prescription among patients hospitalised for community-acquired pneumonia (CAP). PATIENTS AND METHODS: We measured the CP prescription rate and duration in all consecutive CAP inpatients admitted in a division of general internal medicine at an urban teaching community hospital during three consecutive one-year time periods: (1) before any guideline implementation; (2) after a passive implementation by medical grand rounds and guideline diffusion through mailing; (3) after adding a one-page reminder in the CAP patient's medical chart highlighting our recommendations. Death and recurrent hospitalisation rates within one year after hospitalisation were recorded to assess whether CP prescription reduction, if any, impaired patient outcomes. RESULTS: During the three successive phases, 127, 157, and 147 patients with similar characteristics were included. Among all CAP inpatients, the CP prescription rate decreased from 68% (86/127) to 51% (80/157), and to 48% (71/147), respectively (P for trend <0.01 for trend). A significant reduction in CP duration was observed after the active guideline implementation (12.0, 11.0, 7.0days, respectively) and persisted after adjustment for length of stay. Reductions in CP prescription rate and duration were also observed among CAP patients with COPD CP prescription rate: 97% (30/31), 67% (24/36), 75% (35/47), respectively (P<0.01 for trend). The mean cost of CP per patient was reduced by 56%, from $709 to $481, and to $309, respectively. Neither the in-hospital deaths, the one-year overall recurrent hospitalisation nor the one-year CAP-specific recurrent hospitalisation significantly differed between the three phases. CONCLUSION: Both passive and active implementation of guidelines appear to improve the appropriateness of CP prescription among inpatients with CAP without impairing their outcomes. Restricting CP use to patients who benefit from this treatment might be an opportunity to decrease CAP medical cost and workload.

Competing engines of growth: Innovation and standardization

We study a dynamic general equilibrium model where innovation takes theform of the introduction of new goods whose production requires skilled workers.Innovation is followed by a costly process of standardization, whereby these newgoods are adapted to be produced using unskilled labor. Our framework highlightsa number of novel results. First, standardization is both an engine of growth anda potential barrier to it. As a result, growth is an inverse U-shaped function ofthe standardization rate (and of competition). Second, we characterize the growthand welfare maximizing speed of standardization. We show how optimal protection of intellectual property rights affecting the cost of standardization vary withthe skill-endowment, the elasticity of substitution between goods and other parameters. Third, we show that, depending on how competition between innovatingand standardizing firms is modelled and on parameter values, a new type of multiplicity of equilibria may arise. Finally, we study the implications of our model forthe skill-premium and we illustrate novel reasons for linking North-South trade tointellectual property rights protection.

Supply chain management implementation in the Spanish grocery sector: An exploratory study

This paper explores the integration process that firms follow to implementSupply Chain Management (SCM) and the main barriers and benefits relatedto this strategy. This study has been inspired in the SCM literature,especially in the logistics integration model by Stevens [1]. Due to theexploratory nature of this paper and the need to obtain an in depthknowledge of the SCM development in the Spanish grocery sector, we used thecase study methodology. A multiple case study analysis based on interviewswith leading manufacturers and retailers was conducted.The results of this analysis suggest that firms seem to follow the integration process proposed by Stevens, integrating internally first, andthen, extending this integration to other supply chain members. The casesalso show that Spanish manufacturers, in general, seem to have a higherlevel of SCM development than Spanish retailers. Regarding the benefitsthat SCM can bring, most of the companies identify the general objectivesof cost and stock reductions and service improvements. However, withrespect to the barriers found in its implementation, retailers andmanufacturers are not coincident: manufacturers seem to see more barrierswith respect to aspects related to the other party, such as distrust and alack of culture of sharing information, while retailers find as mainbarriers the need of a know-how , the company culture and the historyand habits.

The wage effect of an indexation clause: Evidence from Spanish manufacturing firms

An endogenous switching model of ex-ante wage changes under indexed and non-indexed settlements is estimated for the Spanish manufacturing sector using collective bargaining firm data for the 1984-1991 period. The likelihood of indexing the settlement is higher for nationwide unions than for other union groups within the works council and increases with the expected level of inflation. For wage change equations, a common structure for indexed and non-indexed settlements is strongly rejected, showing a source of nominal rigidity. For indexed contracts, the expected ex-ante total inflation coverage is nearly complete. It is also shown that workers pay a significant ex-ante wage change premium (differential) to obtain a cost of living allowance clause. However, the realised contingent compensation exceeds such a premium for all industries. Finally, important spillover effects in wage setting and the decision to index the settlement have been detected.

Development of a control alternative for the citrus fruit borer, Ecdytolopha aurantiana (Lepidoptera, Tortricidae): from basic research to the grower

All research steps, developed from 1995 to 2000, to synthesize the sex pheromone of Ecdytolopha aurantiana (Lima, 1927) are described, in order to monitoring this pest that causes losses in the order of 50 million dollars per year to citriculture in the State of São Paulo. The basic researches conducted are described, including the development of an artificial diet for the insect, the study of its temperature and humidity requirements, behavioral studies, and synthesis of the male-attracting substance up to the formulation and distribution of the pheromone to the grower, by means of its commercialization. It is a case of success, at a cost of 50 thousand dollars, involving inter- and multidisciplinary researches, which can be adopted to other insect pests in the country.

Bubbly collateral and economic activity

This paper develops a model of the bubbly economy and uses it to study the effects of bailoutpolicies. In the bubbly economy, weak enforcement institutions do not allow firms to pledge futurerevenues to their creditors. As a result, "fundamental" collateral is scarce and this impairs the intermediationprocess that transforms savings into capital. To overcome this shortage of "fundamental"collateral, the bubbly economy creates "bubbly" collateral. This additional collateral supports anintricate array of intra- and inter-generational transfers that allow savings to be transformed intocapital and bubbles. Swings in investor sentiment lead to fluctuations in the amount of bubblycollateral, giving rise to bubbly business cycles with very rich and complex dynamics.Bailout policies can affect these dynamics in a variety of ways. Expected bailouts provideadditional collateral and expand investment and the capital stock. Realized bailouts reduce thesupply of funds and contract investment and the capital stock. Thus, bailout policies tend to fosterinvestment and growth in normal times, but to depress investment and growth during crisis periods.We show how to design bailout policies that maximize various policy objectives.

Parallel scheduling of multiclass M/M/m queues: Approximate and heavy-traffic optimization of achievable performance

We address the problem of scheduling a multiclass $M/M/m$ queue with Bernoulli feedback on $m$ parallel servers to minimize time-average linear holding costs. We analyze the performance of a heuristic priority-index rule, which extends Klimov's optimal solution to the single-server case: servers select preemptively customers with larger Klimov indices. We present closed-form suboptimality bounds (approximate optimality) for Klimov's rule, which imply that its suboptimality gap is uniformly bounded above with respect to (i) external arrival rates, as long as they stay within system capacity;and (ii) the number of servers. It follows that its relativesuboptimality gap vanishes in a heavy-traffic limit, as external arrival rates approach system capacity (heavy-traffic optimality). We obtain simpler expressions for the special no-feedback case, where the heuristic reduces to the classical $c \mu$ rule. Our analysis is based on comparing the expected cost of Klimov's ruleto the value of a strong linear programming (LP) relaxation of the system's region of achievable performance of mean queue lengths. In order to obtain this relaxation, we derive and exploit a new set ofwork decomposition laws for the parallel-server system. We further report on the results of a computational study on the quality of the $c \mu$ rule for parallel scheduling.

Cost system design and cost management in the Spanish public sector

Cost systems have been shown to have developed considerably in recent years andactivity-based costing (ABC) has been shown to be a contribution to cost management,particularly in service businesses. The public sector is composed to a very great extentof service functions, yet considerably less has been reported of the use of ABC tosupport cost management in this sector.In Spain, cost systems are essential for city councils as they are obliged to calculate thecost of the services subject to taxation (eg. waste collection, etc). City councils musthave a cost system in place to calculate the cost of services, as they are legally requirednot to profit , from these services.This paper examines the development of systems to support cost management in theSpanish Public Sector. Through semi-structured interviews with 28 subjects within oneCity Council it contains a case study of cost management. The paper contains extractsfrom interviews and a number of factors are identified which contribute to thesuccessful development of the cost management system.Following the case study a number of other City Councils were identified where activity-based techniques had either failed or stalled. Based on the factors identified inthe single case study a further enquiry is reported. The paper includes a summary usingstatistical analysis which draws attention to change management, funding and politicalincentives as factors which had an influence on system success or failure.

Optimal regulation of a fully insured deposit banking system

We analyze risk sensitive incentive compatible deposit insurancein the presence of private information when the market value of depositinsurance can be determined using Merton's (1997) formula. We show that,under the assumption that transferring funds from taxpayers to financialinstitutions has a social cost, the optimal regulation combines differentlevels of capital requirements combined with decreasing premia on depositinsurance. On the other hand, it is never efficient to require the banksto hold riskless assets, so that narrow banking is not efficient. Finally,chartering banks is necessary in order to decrease the cost of asymmetricinformation.

The role of interbank markets in monetary policy: A model with rationing

This paper analyses the impact of asymmetric information in the interbankmarket and establishes its crucial role in the microfoundations of the monetarypolicy transmission mechanism. We show that interbank market imperfectionsinduce an equilibrium with rationing in the credit market. This has two majorimplications: first, it reconciles the irresponsiveness of business investment to theuser cost of capital with the large impact of monetary policy (magnitude effect)and, second, it shows that banks liquidity positions condition their reaction tomonetary policy (Kashyap and Stein liquidity effect).

Should we await IFN-free regimens to treat HCV genotype 1 treatment-naive patients? A cost-effectiveness analysis (ANRS 95141).

BACKGROUND & AIMS: In treatment-naive patients mono-infected with genotype 1 chronic HCV, treatments with telaprevir/boceprevir (TVR/BOC)-based triple therapy are standard-of-care. However, more efficacious direct-acting antivirals (IFN-based new DAAs) are available and interferon-free (IFN-free) regimens are imminent (2015). METHODS: A mathematical model estimated quality-adjusted life years, cost and incremental cost-effectiveness ratios of (i) IFN-based new DAAs vs. TVR/BOC-based triple therapy; and (ii) IFN-based new DAAs initiation strategies, given that IFN-free regimens are imminent. The sustained virological response in F3-4/F0-2 was 71/89% with IFN-based new DAAs, 85/95% with IFN-free regimens, vs. 64/80% with TVR/BOC-based triple therapy. Serious adverse events leading to discontinuation were taken as: 0-0.6% with IFN-based new DAAs, 0% with IFN-free regimens, vs. 1-10% with TVR/BOC-based triple therapy. Costs were euro60,000 for 12weeks of IFN-based new DAAs and two times higher for IFN-free regimens. RESULTS: Treatment with IFN-based new DAAs when fibrosis stage ⩾F2 is cost-effective compared to TVR/BOC-based triple therapy (euro37,900/QALY gained), but not at F0-1 (euro103,500/QALY gained). Awaiting the IFN-free regimens is more effective, except in F4 patients, but not cost-effective compared to IFN-based new DAAs. If we decrease the cost of IFN-free regimens close to that of IFN-based new DAAs, then awaiting the IFN-free regimen becomes cost-effective. CONCLUSIONS: Treatment with IFN-based new DAAs at stage ⩾F2 is both effective and cost-effective compared to TVR/BOC triple therapy. Awaiting IFN-free regimens and then treating regardless of fibrosis is more efficacious, except in F4 patients; however, the cost-effectiveness of this strategy is highly dependent on its cost.

Contractual allocation of decision rights and incentives: The case of automobile distribution

We analyze empirically the allocation of rights and monetary incentives in automobile franchise contracts. These contracts substantially restrict the decision rights of dealers and grant manufacturers extensive contractual completion and enforcement powers, converting the manufacturers, de facto, in a sort of quasi-judiciary instance. Variation in the allocation of decision rights andincentive intensity is explained by the incidence of moral hazard in the relation. In particular, when the cost of dealer moral hazard is higher and the risk of manufactureropportunism is lower, manufacturers enjoy more discretion in determining the performance required from their dealers and in using mechanisms such as monitoring, termination and monetary incentives to ensure such performance is provided. We also explore the existence of interdependencies between the different elements of the system. and find some complementarities between completion and termination rights, and between monitoring rights and the intensity of incentives.

Assesing the political viability of labour market reform: The case of employment protection

We analyze the political support for employment protection legislation.Unlike my previous work on the same topic, this paper pays a lot ofattention to the role of obsolescence in the growth process.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer jobduration. The support for employment protection will then depend onthe value of the latter relative to the cost of the former. Wehighlight two key deeterminants of this trade-off: first, the workers'bargaining power, second, the economy's growth rate-more preciselyits rate of creative destruction.