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No. 342



ISSN 0019-5170



Using Neural Networks to Forecast Taiwan
Stock Index Option Prices

Chin-Tsai Lin*
Hsin-Yi Yeh**

This study forecasts the option prices of Taiwan stock index options using backpropagation neural networks and Black-Scholes pricing model. The research data comprises the daily prices of sample options for the period from 2 January 2002 to 31 December 2003. The empirical evidence reveals that in a volatile market a neural network option pricing model out performs the traditional Black-Scholes model.

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Energy Consumption Pattern
in the SAARC Region

Amal Sarkar *


This paper compares energy consumption pattern of the SAARC countries using past data. The paper discusses growth rates of commercial energy consumption during 1973-1994 using time-trend model and the estimated results show that despite oil-price shock of seventies, the growth of commercial energy consumption is still high in this region. Then, using regression analysis, energy-GDP elasticity has been estimated for individual SAARC countries as well as other groups of countries of the world. The result shows that energy-GDP elasticity is very high for the SAARC countries whereas for the developed countries, the value of elasticity is relatively low. The paper also makes forecast of energy consumption for the period 2001 to 2005. Finally, the paper investigates some possible areas of regional cooperation.

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The Determinants and Impacts of
Foreign Direct Investments on Economic
Growth in Developing Countries:
A study of Nigeria  

Salisu, Afees A.*


This paper examines the determinants and impacts of Foreign Direct Investments on economic growth in Developing Countries using Nigeria as a case study. The study utilized both simple and multiple regression methods of data analysis. It was found that inflation, debt burden and exchange rate significantly influence Foreign Direct Investment Flows into Nigeria. The study equally gathered that the contribution of FDI to economic growth in Nigeria was very low even though it was perceived to be a significant factor influencing the level of economic growth in Nigeria.

The paper, therefore, urges the government to pursue prudent fiscal and monetary policies that will be geared towards attracting more FDI and enh.ancing overall domestic productivity, ensure improvements in infrastructural facilities and to put a stop to the incessant social unrests in the country.

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Globalisation and Industrial Development in
Nigeria: An Empirical Investigation 

R. O. Salawu *


This study examined the relationship between globalization and industrial development in the Nigerian economy for the period of 1970-2000. The objective of the study was to examine the relative impacts of globalization on industrial development.

The data used for the study were collected from the Central bank of Nigeria's (CBN) Statistical Bulletin (2001) and Annual Report and Statement of Account (2002). The above objective was achieved using both descriptive statistical analysis and econometric techniques. The result showed that globalization has grown at a faster rate than real output, a high correlation exists between globalisation and industrial development.

The conclusion that emerged from the study is that globalization has been impacting positively impacted industrial development in Nigeria. The policy recommendation is that government should continue to ensure appropriate policies that will continually enhance the realization of the much-expected benefits of globalization in Nigeria.

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Comparison of Economic Efficiency
Estimation Methods: An Application
to Taiwan's Life Insurance Industry

James C. Hao *


I employ a wide range of parametric and non-parametric cost frontiers efficiency estimation methods to estimate economic efficiency and economics of scale, using panel data of 25 Taiwanese life insurance companies over the period 1980-2002. According to my empirical implementation, the two methodologies yield similar average efficiency estimates, yet they come to different results pertaining to efficiency rankings, the stability of measured efficiency over time, the conspiracy between frontier efficiency and conventional performance measures, and the estimates of scale economies. Thus, the choice of an estimation approach can result in different conclusions and policy implications regarding cost efficiencies and cost economies. These findings suggest that making policy decisions and evaluations relies on multiple techniques and specifications.

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Politico-Economic Issues of Outsourcing  

Himanshu Tandon*

Global outsourcing is not a new concept in itself; it, however, has come in spotlight during the last decade of the 20th century, more importantly with the phenomenon being applied as it is to the services.

The outsourcing of services has been long studied, the present paper intends to put in perspective the socio-economic and political issues confronting the phenomenon of global outsourcing. The paper traces the origins of the concept to its present connotation of offshore outsourcing in the services sector. The paper presents a macro view on
the contemporary issues and delves further to find answers to the questions posed and combines them with visa regulations, and political considerations.

"Specialization according to Comparative Advantage" is "both true and not Trivial in Economics" Paul Samuelson (anecdote)

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Performance of Agriculture
in the Changing Structure of the
Orissa Economy: A Panel Data Evidence 

Manoranjan Pattanayak
Bibbu Prasad Navak
Piyusb Saluja


In the post-reform era of India, significant growth has been achieved in many areas at the cost of equality. The manufacturing and service sector has gained in several ways. But, the primary sector became the victim. In this bizarre way of reform, not only the output and productivity level of agriculture has gone down but also inter and intra regional inequality has been widened. This paper discusses the nature of structured change in a state of India, i.e., Orissa. The trends in the changing share of the different sectors to Gross State Domestic Product have been analyzed. As the major focus of the study is agriculture, district wise agricultural productivity has been measured. An attempt has been made to explain the inter-districts differences in productivity in terms of input use. Using an empirical model, the importance of several inputs has been examined.

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Irrigation Subsidies in India:
Some Observations

C. Bhujanga Rao *

This paper brings out an overview of developments in irrigation sector and the problems that still lay ahead. It summarizes the various observation made by the Finance Commissions. The magnitude of irrigations subsidies are presented and compared with the earlier estimates. There is a need to bring down the magnitude of irrigations
subsidies. A significant part of the irrigation subsidy goes to finance excess staff. There is need to prune the existing staff strength, reduce costs and augment recoveries. The recovery rates have been coming down over the years. Irrigation subsidies account for more than one percent of GDP.

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Estimation of Supply Functions for
Himachal Apples

R. S. Prasher *, Manjusha Thomas **
Y. S. Negi **


Present study has attempted to quantify the role of price and non-price factors responsible for short and long-run supply of apple in Himachal Pradesh. The study identified long-run parity price expectation, yield expectation and road length as the most important factors which had induced the orchardists to take up apple plantation in Himachal Pradesh. One per cent increase in these factors will lead to 2.35 per cent increase in the area under apple plantation. The study also provides conclusive evidence that the terms of trade is against apple industry both in short and long-run; thus, appropriate policy measures are required to tackle the existing situation. Measures which help in improving the pricing efficiency needs to be introduced. Price also emerged as another important factor considered by the orchardists while taking decision for apple plantation Thus, the price policy is equally relevant in case of perenqial fruit crops as is for annual crops, and could be used as an instrument for horticultural development.

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