Debt and the developing countries: A note on optimal international borrowing

This note re‐examines the economic model of optimal international borrowing for LDCs proposed by Gemmell [1988]. Pursuing a rigorous methodology, this note derives alternative optimal debt functions, and discusses the sufficient conditions under which the optimal debt level is positive. Interesting implications of the analysis in this note, inter alia, rest in identifying the appropriate role of social inter‐temporal consumption preferences in a more realistic setting, and in perceiving, unambiguously, the tendency of ‘overborrowing’ by LDCs that only service their debts over long periods.     

Structuralism versus Monetarism : A note on evidence

This paper illustrates, with a ten year simulation, possible effects of Malaysia's national buffer stock for natural rubber on the level and stability of export earnings, export tax revenue, producer income and world price. Employing rubber market parameters based on inference and empirical tests and buffer stock operating costs and policies similar to those of the current Malaysian buffer stock, it is shown that capital requirements for effective control exceed those at the disposal of the buffer stock manager while control may be expected to stabilize price at the expense of export earnings and producer income stability. These unfavourable effects can be neutralized in part by the increase in receipts obtained with a sufficiently narrow controlled price range or by an increase in demand emanating from reduced price risk. Under the apparent wider range of the buffer stock, losses in export earnings and producer income, as well as capital expenses and the terminal deficit of the stock authority are each less than 1 per cent of export earnings and producer income. The maximum short run capital requirement is about 2.5 per cent of these latter magnitudes. The arguments presented indicate that internationalization of the buffer stock would increase the benefits and decrease the costs in terms of the proportion of producer income and export earnings, compared to the existing national device.     

Farm size and land productivity in Indian agriculture: A reappraisal

This paper seeks to assess the significance of the celebrated inverse relationship between farm size and land‐productivity in the context of Indian agriculture. It is argued that the inverse relationship does not reflect a superiority of peasant production over wage‐labour‐based production as is often supposed. It exists independently of production relations and thus reflects only a static superiority of small‐scale over large‐scale production. An essential precondition for this superiority, however, is a backwardness of technology. With technological progress involving the introduction of chemical fertilizers, labour‐saving machinery and modern irrigation equipment, the inverse relationship is, therefore, likely to disappear