Econometric modelling of time series applied in the generation of subsidies in the milk production chain in Rio Grande do Sul

The purpose of this article is to make short-term forecasting using the methodology Box Jenkins, the Johansen method and the Granger causality, and the impulse-response function between variables price and milk production in Rio Grande do Sul’s market. The monthly price series of milk and its production in Rio Grande do Sul were analysed, in the period from January 1995 to December 2017. The model that suits best, for forecasts, the data of the series of the milk price paid to the producer was an ARIMA (1, 1, 1) and production was SARIMA (1, 1, 1) (1, 1, 1)6, which provided reasonable estimates of forecasts for the months from February to July of 2017. The use of Johansen methodologies identifies the existence of the one cointegration vector and a long-term equilibrium relation between variables price and production of the milk. When we analyse Granger's causality, the results point to a two-way relationship, that is, prices influence milk production and vice versa. The analysis of the impulse-response function showed that the shocks present significant impacts between production and cost, both in terms of duration and intensity.

Research on Reasonable Width of Coal Pillars of Non-equal Width Isolated Working Face Heading Goaf in Deep Mine

Setting reasonable coal pillar is a key to ensure safe mining of island coal face heading goaf in deep mine. With determination of reasonable width of coal pillars of non-equal width isolated working face 3201 in worked-out area in one mine in Shandong as the engineering background, a research was conducted on the mechanism of rock burst induced by and the reasonable width of coal pillars of isolated working face in worked-out area and the main conclusions are as follows: (1) the coal pillars of isolated working face 3201 in worked-out area changed from pillars with goaf on two sides→pillars with goaf on three sides→pillars with goaf on four sides, resulting in evolution of overlying strata from pre-mining static “┒-shaped” structure→“C-shaped” structure→“O-shaped” structure and corresponding spatial stress from “saddle-shaped” profile→“platform-shaped” profile→“arch-shaped” profile; (2) the rock burst was induced by coal pillars, because the high stress on coal pillars at critical state of a rock burst was greater than their comprehensive strength and induced a rock burst due to sudden instability; (3) by establishing a bearing and load model of coal pillars at critical state of a rock burst and based on the equilibrium relation, an method for estimating reasonable width of coal pillars of isolated working face in worked-out area in deep mine was derived and applied to the isolated working face 3201 in worked-out area, thus comprehensively determining that the width of coal pillars should be 130m. The field stress monitoring verified the reasonability. The research result is of great significance to prevention of rock burst induced by coal pillars of isolated working face in worked-out area in deep mine.

Long Run and Short Run Linkages Between Credit and Output

An appropriate link between the financial sector and real sector is required to have a balanced growth and development of a country as well as its regional levels particularly for the countries whose financial developments are not being saturated. In the present study, the authors have examined whether there are long run equilibrium relation between financial development (proxied by commercial bank credit) and real sector's development (proxied by net district domestic products) and short run causations for the districts of the state of West Bengal in India for the period 1993-2014. Applying the Engel-Granger cointegration and Granger causality approaches, the study reveals that there are cointegrating relations between credit and domestic products of the 13 districts out of which errors are corrected for 10 districts. Further, there are unilateral causal relations between the variables in nine districts with 11 producing no such causal relations. The study thus prescribes for strengthening the two sectors' developments so that there can be appropriate linkages between credit and output across the district levels in the longer runs.

The analysis of wheat prices using multiple structural breakpoint co-integration test

From 2005 to 2008, high volatility in the markets affected grain prices significantly. This high volatility in grain prices made many researchers curious, and many discussions aroused from this topic. This study analyzes wheat price behavior during this period of high volatility. We estimate a return index for wheat using spot and futures wheat prices with the help of a present value model. To analyze the cointegration between the wheat prices and return index, a new co-integration test with multiple structural breaks, developed by Daiki Maki (2012), is used. The long-run cointegration coefficients are estimated using the Dynamic Ordinary Least Squares methodology. The empirical results show that there is cointegration between the spot and futures wheat prices, which tends to change at breakpoints. In other words, there is an equilibrium relation between spot prices and futures prices; however, it becomes unstable during the crisis in 2008. The results may help in understanding the dynamics of wheat prices, especially during high-volatility periods.

Sustainable and Optimal “Uniqueness” Contract in Public-Private Partnership Projects of Transportation Infrastructure

To control the “uniqueness” risk in Public-Private Partnership (PPP) projects of transportation infrastructure, we design a simplified “uniqueness” contract model by incorporating the impact of the initial investment which is based on the Bertrand model. The nonlinear programming method is adopted to derive the optimal “uniqueness” contracts for incumbent private capital, the public, and the social welfare, respectively. The simulation results show that the achievement of the optimal “uniqueness” contract is essentially the result of a compromise between the private capital, the public, and social welfare. The extent to which such a contract reduces the probability of “uniqueness” risk mainly depends on the equilibrium relation between the interests of private capital and the public. The initial investment is not related to the government default when the contract does not take into account the interests of the private capital. Furthermore, the “uniqueness” contracts between private capital and the government are mainly for anticompetitive purpose in the PPP market of transportation infrastructure. Unless the contract terms focus on the improvement of social welfare, entering a “uniqueness” contract will cause social welfare losses.

Testing the Validity of Purchasing Power Parity Theory and Dynamics of Exchange Rate Behavior (Pakistan, China, Iran and Turkey)

Purpose: This study is aimed at to observe the purchasing power parity (PPP) Theory. The purchasing power parity (PPP) is the most enduring debate of literature in international macroeconomics. It is most controversial due to various puzzles and tested with different econometric models for certain group of countries. Therefore, the PPP is valid assumption while international comparison due to use of common exchange rate and the prevalence of Law of One price. Design/Methodology/Approach: The validity of PPP for relative countries (Pakistan, China, Iran and Turkey) was tested and analyzed for the sample period 2001 to 2018. Findings: It is observed that exchange rates of Pakistan, China, Iran and Turkey are not consistent and constant. The deviations of PPP through structural changes identified and are not persistence over long period. Overall results reflected that there is an existence of long run equilibrium relation in between Pakistan and China as well as in between Iran and Turkey. The error correction model has confirmed the adjustment speed of short run disequilibrium to long term disequilibrium level. Implications/Originality/Value: The expected differential level of inflation has significant positive impact to exchange rate shift to Pakistan and trading activity patterns. The changes in foreign exchange market and commodity market due to economic integration are important implications for economic globalization.

A Prediction Model for Concrete Cracks due to Chloride-Induced Corrosion

The nonhomogeneity of concrete leads to randomness in the development and extension of cracks. Scholars have proposed different models to analyze the development of cracks. Different from existing works on crack development, in this paper, we establish a crack spacing model on the basis of the mechanical equilibrium relation of differential elements. We also establish a mechanical equilibrium model considering that the shrinkage of concrete is constrained by the bonding force of reinforced concrete. Then, on the basis of the equilibrium condition, we propose an analytical model of spacing between the first crack and the second crack at the interface of steel and concrete due to corrosion expansion. This calculation model has only three variables: tensile strength, effective constraint length of the reinforcement, and bond force. In addition, the parameters are clearly defined. We verified the development of cracks at the interface between steel bar and concrete under chloride corrosion at different locations in a steel bar by comparing it with existing simulations and experimental results. The analytical model proposed in this paper has an accuracy of 92%, indicating that our expression for crack spacing can effectively predict the location of cracks.

Long Memory and Parity Reversion in Real Exchange Rate

This paper examines the post Bretton Woods experience of the Malaysian Ringgit. In this period, Malaysia moved from a managed to a floating exchange rate environment.We examine persistence in real exchange rates by estimating fractionally integrated ARIMA models and find evidence of long memory, which induces persistence though this long memory need not be associated with a unit root. The results show that three out of four exchange rates being examined display mean reversion. The long memory process re-establishes the Purchasing Power Parity as a meaningful concept of long-run equilibrium relation between the exchange rate and relative prices.