Appraisal of Determinants of Real Exchange Rate Alignment in Kenya

Real exchange rate is an important indicator of competitiveness in the foreign trade of a country. Any changes in real exchange rates would therefore lead to fluctuations in capital flows. It is therefore important to align real exchange rates within the equilibrium levels to avoid negative consequences on the economy. This study sought to understand the determinants of real exchange rate alignment in Kenya using annual data from 1988 to 2019 using Autoregressive Distribution Lag (ARDL) model. The study estimated the long run and short run dynamics of real exchange rate alignment in Kenya. The ARDL bounds test confirmed that a long run relationship exists between real exchange rate and the explanatory variables. Real exchange rate was the dependent variable while the explanatory variables were external public debt, government expenditure, interest rate differentials and productivity differentials. The results revealed that external public debt, government expenditure and productivity differentials are significant determinants of real exchange rate alignment. Interest rate differential was found to be not significant. The Error Correction Model was found to be significant and having the right (negative) sign. This shows that Kenya’s real exchange rate adjusts to the long run equilibrium as a response short run shocks of previous periods. The speed of adjustment was found to be 86 percent per year. Both the long run and error correction models were found to be stable as per the CUSUM and CUSUMQ tests. The models also passed all the diagnostic tests including serial correlation, normality, heteroscedasticity, and multicollinearity.

Gender Differentials on Productivity of Rice Farmers in South-western Nigeria: An Oaxaca-blinder Decomposition Approach

One of the critical constraints hindering the transformation of African agriculture in general, and Nigerian agriculture in particular, is gender disparities in productivity. This study, therefore, examines gender inequality in farm productivity and sources of the productivity differentials among rice farmers in Nigeria, using the Oaxaca-Blinder (OB) gender decomposition model. The results revealed an uneven situation between men and women, leading to a gender productivity gap of about 29% in favour of men. Thus, female-managed plots are 29% less productive than male-managed plots. The decomposition of the sources of gender productivity differences shows that marital status, education, farm size and access to market information are the significant determinants of the endowment factor that contribute to about 15% of the productivity gap. The study, therefore, concludes that gender productivity inequalities exist in the Nigerian agricultural sector, hence, paying attention to these productivity gaps and factors contributing to these gaps is crucial in formulating policy interventions oriented towards women empowerment.

Gender differentials on productivity of rice farmers in south-western Nigeria: An Oaxaca-Blinder decomposition approach

One of the critical constraints hindering the transformation of African agriculture in general, and Nigerian agriculture in particular, is gender disparities in productivity. This study, therefore, examines gender inequality in farm productivity and sources of the productivity differentials among rice farmers in Nigeria, using the Oaxaca-Blinder (OB) gender decomposition model. The results revealed an uneven situation between men and women, leading to a gender productivity gap of about 29% in favour of men. Thus, female-managed plots are 29% less productive than male-managed plots. The decomposition of the sources of gender productivity differences shows that marital status, education, farm size and access to market information are the significant determinants of the endowment factor that contribute to about 15% of the productivity gap. The study, therefore, concludes that gender productivity inequalities exist in the Nigerian agricultural sector, hence, paying attention to these productivity gaps and factors contributing to these gaps is crucial in formulating policy interventions oriented towards women empowerment.

Wage-differentials and Their Determinants Across Industries in the Organized Manufacturing Sector of India

This article calculates the magnitude of wage differentials across industries in the organized manufacturing sector of India and identifies the major determinants of wage differentiation among the industries. Using data from Annual Survey of Industries in India for the period from 2000–2001 to 2015–2016, this study shows that mean wage is less in labour-intensive industries compared to the capital-intensive industries. The results of panel regression of annual average wage on various industry-specific factors show that productivity of labour is the most important factor in wage determination, and productivity largely depends on capital–labour ratio. The other significant factors in this regard are farm size, amount of profit and proportion of casual and female workers in total employment. Important policy implication of this study is that regulatory wage fixation and wage bargaining outcomes are not as significant as productivity differentials in explaining wage gaps across industries.

The rise of the “service economy” in the second half of the twentieth century and its energetic contingencies

The characteristic of the “service economy” is the rise to dominance of the service sector in terms of employment and value added shares. We track this rise during the second half of the twentieth century for the U.S., more precisely the period from 1970 to 2005. Following seminal work by Baumol (1967) the rise is often attributed to growing productivity differentials between the economic sectors. The causes of the productivity differentials are, however, controversial. Inspired by Georgescu-Roegen’s (1971) evolutionary approach to production theory, the present paper explores whether differences in the energetic features of the sectors’ production technologies contribute to the growing sectorial productivity differentials. For the data for our period of analysis it turns out that a close relationship indeed exists between the sectors’ incentives for substituting relatively cheap energy for ever more expensive labor and their labor productivity gains. In highly energy-dependent sectors an increasing energy/labor ratio has been driving productivity growth while this was not the case in the service sector. The paper closes with a short discussion of what the finding may imply for the future of the service economy.