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(c) The relative responses of pRF with respect to the size of domestic subsistence

(c) The relative responses of pRF with respect to the size of domestic subsistence production contained in PCDP, indicate that there is no substantive linkages between the level of prices and subsistence production. The significance of this

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(c) The relative responses of pRF with respect to the size of domestic subsistence

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  1. (c) The relative responses of pRF with respect to the size of domestic subsistence production contained in PCDP, indicate that there is no substantive linkages between the level of prices and subsistence production. The significance of this conclusion is that subsistence production in Somalia is geared to responses beyond prices and, therefore, structured market activities, such that there is no consistent and meaningful marriage between them (14). This is in conformity with the argument that the subsistence sector in Somalia is, for all practical purposes, removed from the active market exchange and interactions observable in the urban sector. 2.6 Reduced-form Coefficients for the Exogenous Variables In Models I, II and III 2.6.1 Transforming RVt (see below) into the reduced-form, requires that we uniformly multiply through the inverse (R-') such that: 2.6.2 Reduced-form equations describe the endogenous variables specified in each model in terms of exogenous, lagged endogenous and error terms. The purpose of generating these coefficients is to evaluate the forecasting properties of models so constructed and to examine the time-path of effects of a change in one or more of the exogenous variables on the endogenous variables. Table I shows the reduced- form coefficients of the set of predetermined variables in each of the models and the root mean squared errors associated with them. 2.6.3 Effects of Change of Exogenous Variables on Endogenous Variables (A) Per capita daily calorie requirements (Y5): This decision variable is, by far, the most critical factor in determining the scope of the per capita kilogram cereal requirements, the volume of merchandise imports financed by the government or its parastatals; and the per capita production generated by the domestic cereal food producing sector. ( i ) The effect of any increase in the level of daily calorie requirement by- means of policy re-evaluation, as a result, for instance, of food needs of the population, would imply that the volume of the per 17

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