FADS VERSUS FUNDAMENTALS IN FARMLAND PRICES

This paper develops an approach to decompose farmland price time series into three components: permanent fundamental component, temporary fundamental component, and nonfundamental component. This decomposition is useful for studying the importance of fundamental versus nonfundamental factors in explaining farmland price behavior and the dynamic response of farmland price to shocks to each of these components, among other issues. The approach is applied to annual Iowa farmland prices over the 1992-1994 sample period.

Government debt, Consumption, and Interest Rates: An Empirical Study of the Ricardian Equivalence Hypothesis

This paper investigates the effects of the government debt on private consumption and interest rates (i.e., the Ricardian equivalence hypothesis) in a nonlinear-quadratic equilibrium framework, combined with a time series analysis of the data. The model is summarized by the restrictions on the coefficients of a vector auto regressive (VAR) representation of the relevant variables. The model is not rejected for the sample period of 1947 through 1979 even though the evidence was not overwhelming. It is rejected when the sample period is. extended, to... include, the. Reagan .administration .period up to 1987,1. A more detailed data analysis based on a VAR implies, however\u27,- that the rejection of the model does not necessarily imply rejection of the equivalence hypothesis for recent years and that the Ricardian equivalence hypothesis still provides a plausible approximation of reality

Solving, Estimating and Testing Nonlinear Stochastic Equilibrium Models

This paper describes a method for solving, estimating and testing a fully specified nonlinear stochastic equilibrium model by simulation in the context of an asset pricing model. A nonlinear stochastic asset pricing model with production and money is formulated, which aims to explain observed empirical relations between inflation and asset returns. Complete solution paths to the equilibrium model are generated through a back-jards mapping simulation method that does not call for any approximation procedures. The parameters of the model are estimated by simulation talking account of a broad range of dynamics of the model, and over-identifying restrictions of the model are tested by extending GMM procedure

The Media and Economic Crisis in Korea circa 1993 to 2003

This thesis aims to investigate the relationship between the media and economic change in Korea. The main claim is that the press played an important role in creating the economic crisis. The Korean press's excessive swing to the right contributed remarkably to positioning neo-liberalism as the mainstream ideology of the society. In particular, their discourse practices for `Globalisation' accelerated the trend of `retreating state and expanding market'. They hampered rational public debates, distorted economic policies and ultimately led to the crisis. The Korean press neglected to watch the problems of the chaebol (Korean conglomerates) and even encouraged the chaebol's over-investment. They failed to warn against the imminent currency crisis, partly due to their patriotic stance. By contrast, some influential members of the foreign press, particularly based on Wall Street, carried many critical reports reflecting the interests of international financial capitals. Their exaggerated reports enabled them to exert self-fulfilling effects. When the currency crisis arrived in Korea, both the domestic and foreign press played a considerable role in aggravating and transforming it into a chronic economic crisis, by supporting the IMF's mistaken prescriptions such as belt-tightening policies and selling companies abroad. The Korean case suggests that when the media abandon their obligation as a warning system and offer misleading views on socio-economic realities, the public sphere can be damaged. In a severely damaged `public sphere', it was very difficult for many important decisions such as company decisions, government policies and IMF prescriptions to secure rationality. In short, the Korean case shows that the media can deform the public sphere and thereby have negative effects on the economy, contributing to a crisis. From this perspective, two traditions of media studies - the public sphere and media influence - can be combined. The existing studies on media influence tend to favour a rather limited model of influence. However, given that the deformation of public sphere is one form of media influence, the limitation of this model is clear

Revisiting the Phillips Curve with a Structural VAR

Our purpose is to examine the broad consistency of the data with the stylized predictions ofa simple textbook Keynesian model of inflation and unemployment. Models in this class, despite their simplicity and lack of a firm foundation in general equilibrium theory, form the basis for much of what we teach our undergraduates and for much of the public and media discussion of macroeconomic events and policies. Furthermore, the reasonableness of more sophisticated micro-based macroeconomic models are often judged according to how well their conclusions correspond to those that come from the aggregate supply and aggregate demand framework

Fads Versus Fundamentals in Farmland Prices

A consensus appears to be forming that farmland price movements are not well-explained by the present value model with rational expectations. See, for example, Burt (1986), Featherstone and Baker (1987), Falk (1991,1992), and Hanson and Meyers (1995). Although the specific methods and data sets differ across these papers, each one formally or informally rejects the present value model as an explanation of farmland prices. The reasons for the empirical failure of the present value model are not clear. Burt (1986) concludes that deviations of farmland price from its fundamental path can be explained in terms of overreaction to rent movements. Featherstone and Baker (1987), on the other hand, conclude that these deviations are largely determined by purely speculative forces, i.e., by fads. No one, however, has attempted to quantify the fad component to help resolve this basic issue

The Dynamic Effects of Permanent and Transitory Labor Income on Consumption

This paper develops a version of the Permanent Income Hypothesis in which permanent and transitory components of consumption and labor income are explicitly accounted for. The model is used to derive a restricted vector autoregressive representation of adjusted measures of consumption and saving, which is used to test the theory and to study the dynamic effects of the two • components of labor income on consumption. We find that the restrictions on the VAR are not easily rejected for quarterly post-war U.S. data. An analysis of the restricted VAR leads us to conclude that consumption can be almost entirely explained in terms of the permanent component of labor income