SRI LANKAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 16 Number 1. 2014
Author - Nisal Herath
Oil price shocks have the potential to slow down the economic growth
and create inflationary pressures in oil importing small economies. A vector
auto regression (VAR) model, augmented by Toda and Yamamoto procedure,
was estimated using monthly data from 2000-2013 to examine the impacts of
oil price shocks on Sri Lankan economy. The results indicate that linear oil
price shocks affect GDP, foreign reserves and interest rate. Positive oil price
shocks affect foreign reserves and the interest rate, while negative oil price
shocks affect GDP, interest rates and exports. Oil price decreases have
larger and quicker impacts on GDP. Thus, there is evidence for presence of
asymmetric oil price impacts in Sri Lankan economy. No evidence to show
that oil price shocks cause inflation. As such, the government has the ability
to employ expansionary monetary policy to avoid stagflation during high oil
price periods. Overall, the results indicate that the economy has a certain
degree of insulation from international oil price increases. In addition, energy
policy has also contributed to insulate the economy from oil price shocks
through reduction in energy intensity.
Nisal Herath
Author - Tilak Susantha Liyanaarachchi, Jayatilleke S. Bandara and Athula Naranpanawa
In recent years there has been a trend in rising protectionism and a
reversal of trade policy reforms in some developed and developing countries,
particularly after the global financial crisis. Although some researchers and
practitioners have discussed recent trends in trade policy reversal in both
developed and developing countries in recent years, no serious attempts have
been made to examine the effects of trade policy reversal in a developing
country within an economy-wide framework. The current paper attempts to
fill this research gap by answering the question: Can developing countries
benefit from trade policy reversals? The study focuses particularly on the case
of Sri Lanka. To address this central research aim the paper first reviews
recent trends in import duty and para-tariffs in Sri Lanka, particularly after
the global financial crisis. An economy-wide computable general equilibrium
(CGE) model was then used to evaluate the effects of trade policy reversal on
the Sri Lankan economy. The results of the Sri Lankan case study presented
suggest that developing countries will not benefit from trade policy reversal at
either the macro level or industry level.
Tilak Susantha Liyanaarachchi, Jayatilleke S. Bandara and Athula Naranpanawa
Authors - Arpita Banerjee and Pravat Kumar Kuri
The deceleration in growth trends in agricultural output and
yield rate is a matter of great concern in recent years in India. This
study makes an attempt to examine the growth performances of
agricultural production and productivity of major States of India and
the nature and extent of disparity in the performances of agriculture.
The growth performances have been analyzed considering three
distinct phases of agricultural development in India viz the first phase
of green revolution 1970-71 to 1979-80, second phase of green
revolution 1980-81 to 1990-91, and the period after economic reform
1991-92 to 2007-08). The agricultural infrastructural index,
constructed using Principle Component Analysis, reveals the
prevalence of a wide inter-state variation in agricultural infrastructure
in India. Moreover, using Generalized Method of Moments (GMM)
under the panel data framework, the study attempts to examine the
trends of convergence/divergence of per capita value of agricultural
output over the period 1970-71 to 2007-08. The results of conditional
convergence establish the argument that variations in the provision of
agricultural infrastructure and natural factor like rainfall play the
divergent role in accruing benefits from agriculture in India. The
skewed distribution of public and private investment in favour of
agriculturally developed states has been found to be responsible for
enhancing the disparity in agricultural infrastructure and thus, to the
per capita net state domestic product across states in India
Arpita Banerjee and Pravat Kumar Kuri
Authors - J.M.D.D.J. de Alwis
With the increasing concerns on detrimental environmental effects of
world trade, WTO member countries in 2001 called for reduction or
elimination of tariffs and non-tariffs barriers on Environmental Goods and
Services (EGS) claiming that would improve environmental protection and
economic development simultaneously. The study investigated the impact of
opening trade of EGS on environmental quality estimating pollution functions
of Sulphur Dioxide (SO2), Nitrogen Oxides (NOx) and Carbon Dioxides (CO2)
using cross country data for 62 countries. Estimated SO2 pollution function
revealed that elimination of tariff on EGS trade result in falling SO2 emissions
in comparison to increasing SO2 pollution as a result eliminating tariff on non
EGS trade. Findings formally support for the liberalization of EGS. Falling of
SO2 pollution due to elimination of tariff on EGS is due to differences in
countries’ capital-labour endowments. The findings suggests that falling
pollution due to EGS trade liberalization has no relationship with the income
level of the countries, but favour capital abundant countries in reducing the
pollution emissions.
J.M.D.D.J. de Alwis