IMPLICATIONS OF DEFLATING COMMODITY PRICES FOR TIME-SERIES ANALYSIS

The choice of deflators of commodity prices can change the time-series properties of the original series. This is a specific application of the general phenomenon that various kinds of data transformations can create spurious cycles that did not exist in the original data. Different empirical models of expectations result from nominal and various deflated series that have distinct time-series properties, and these models, in turn, produce varying estimates of supply response and measures of price risk. The foregoing is illustrated by annual grain prices, monthly milk prices, and a milk supply analysis. Annual prices of corn and soybeans, for example, appear to vary around a constant mean, but when deflated by general price indexes such as the CPI, the deflated prices are autocorrelated around a declining deterministic trend and/or have a stochastic trend. The quasi-rational expectations hypotheses assumes that farmers base expectations on forecasts from time-series models, but forecasts of real prices, that ultimately become negative, are not rational.deflating, time-series analysis, price expectations, price risk, supply analysis, Demand and Price Analysis,

History of the numerical aerodynamic simulation program

The Numerical Aerodynamic Simulation (NAS) program has reached a milestone with the completion of the initial operating configuration of the NAS Processing System Network. This achievement is the first major milestone in the continuing effort to provide a state-of-the-art supercomputer facility for the national aerospace community and to serve as a pathfinder for the development and use of future supercomputer systems. The underlying factors that motivated the initiation of the program are first identified and then discussed. These include the emergence and evolution of computational aerodynamics as a powerful new capability in aerodynamics research and development, the computer power required for advances in the discipline, the complementary nature of computation and wind tunnel testing, and the need for the government to play a pathfinding role in the development and use of large-scale scientific computing systems. Finally, the history of the NAS program is traced from its inception in 1975 to the present time