Dynamic Factor Demands for Aggregate Southeastern United States Agriculture

A four equation input demand system for aggregate Southeastern United States agriculture consistent with dynamic optimizing behavior is specified and estimated. Labor and materials are considered as variable inputs while land and capital are treated as quasi-fixed inputs. It is found that the adjustment rates for capital and land differ considerably and are interdependent. Further, the data appear consistent with the existence of an aggregate production technology and the hypothesized optimizing behavior.Farm Management,

A GENERAL, DYNAMIC, SUPPLY-RESPONSE MODEL

Resource /Energy Economics and Policy,

DYNAMIC INPUT DEMAND FUNCTIONS AND RESOURCE ADJUSTMENT FOR U.S. AGRICULTURE: STATE EVIDENCE

The paper presents an econometric model of dynamic agricultural input demand functions that includes research based technical change and autoregressive disturbances and fits the model to data for a set of state aggregates pooled over 1950-82. The methodological approach is one of developing a theoretical foundation for a dynamic input demand system and accepting state aggregate behavior as approximated by nonlinear adjustment costs and long-term profit maximization. Although other studies have largely ignored autocorrelation in dynamic input demand systems, the results show shorter adjustment lags with autocorrelation than without autocorrelation. Dynamic input demand own-price elasticities for six input groups are inelastic, and the demand functions poses significant cross-price and research stock effects.

The new keynesian approach to dynamic general equilibrium modeling: models, methods, and macroeconomic policy evaluation

This chapter aims to provide a hands-on approach to New Keynesian models and their uses for macroeconomic policy analysis. It starts by reviewing the origins of the New Keynesian approach, the key model ingredients and representative models. Building blocks of current-generation dynamic stochastic general equilibrium (DSGE) models are discussed in detail. These models address the famous Lucas critique by deriving behavioral equations systematically from the optimizing and forward-looking decision-making of households and firms subject to well-defined constraints. State-of-the-art methods for solving and estimating such models are reviewed and presented in examples. The chapter goes beyond the mere presentation of the most popular benchmark model by providing a framework for model comparison along with a database that includes a wide variety of macroeconomic models. Thus, it offers a convenient approach for comparing new models to available benchmarks and for investigating whether particular policy recommendations are robust to model uncertainty. Such robustness analysis is illustrated by evaluating the performance of simple monetary policy rules across a range of recently-estimated models including some with financial market imperfections and by reviewing recent comparative findings regarding the magnitude of government spending multipliers. The chapter concludes with a discussion of important objectives for on-going and future research using the New Keynesian framework

Output, Capital, and Labor in the Short, and Long-Run

Using a new series of capital stock and frequency domain analysis, this paper provides new empirical evidence on the relative importance of capital and labor in the determination of output in the short and long- run. Contrary to the common practice in the traditional growth accounting literature of assigning weights of 0.3 and 0.7 to capital and labor inputs respectively, the evidence presented here suggests that capital is a far more important factor than labor for determination of output at and near the zero frequency band. Furthermore, I show that the zero-frequency labor elasticity of output may well be close to zero, or even zero. Additional findings reported here support the traditional accelerator model of investment as a good description of the long-run investment process.Growth Accounting, Capital Investment, Output Fluctuation, Employment, Business Cycles and Aggregate Fluctuation, Frequency Domain Analysis, Spectrum and Cross-Spectrum, Coherence, Phase Shift, Gain, Zero-Frequency, Capital and Labor Elasticity of Output, Short-Run, Long- Run, Capital's and Labor's Share in Output, Accelerator Model of Investment

The Time-to-Build Tradition in Business Cycle Modelling

An important frontier of business cycle theorising is the 'time-to-build' tradition that lies at the heart of Real Business Cycle theory. Kydland and Prescott (1982) did not acknowledge the rich tradition of 'time-to-build' business cycle theorising - except in a passing, non-scholarly, non-specific, reference to Böhm-Bawerk's classic on Capital Theory (Böhm-Bawerk [1899]), which did not, in any case, address cycle theoretic issues. The notion of ‘time-to-build’ is intrinsic to any process oriented production theory which is incorporated in a macrodynamic model. We provide an overview of this tradition, focusing on some of the central business cycle classics, and suggest that the Neo-Austrian revival should be placed in this class of dynamic macroeconomics, albeit ‘traverse dynamics’ is itself to be considered as a fluctuating path from one equilibrium to another.