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Research Papers in Economics

Str n  l v  t      r  t  b   t d
f r  pr     t    n   h  h  n    8 . . .
 nd x,   6  =  00
2 0
2 0
  0
  0
 0  
 r ll.   .,
  68  6    0       2       4       6       8
A r   lt r : f r   n     r   v r 
  r    rn n   r      b t nt  ll  l  t    r,
br    n    f  r    r  l d .  h   nd x  f pr    
r    v d b  f r  r   v r   d   r   rd 20 
(  6 = 00 .  h t      4 p r  nt  v r th 
pr v        r  nd   p r  nt  v r th  pr v    
h  h  n    4.
  v  t    l d th   pt rn       ll r
  ppl     f    t  nd   l   nd d   d dl 
 tr n  r d   nd p  h d pr      f l v  t   
2  p r  nt h  h r th n  n     .
Cr p pr       ntr b t d t  th  r   , b t
  th  n r      th t  v r   d  nl  6 p r  nt.
Cr p pr d  t  n   rp    d th  r   rd     
h rv  t, pr v d n   b nd nt  r  n   ppl   
thr   h  t l  t    r.   t   th r   rd f r   n
p r h      nd th  n    r  n r   rv  pr  
 r   ,  r  n  nd    b  n  t       r  n t   
b rd n         xp  t d.
   h r pr      nd h  h r   v rn  nt
p    nt  b   t d  r    f r   n     t 
 b  t $ 2  b ll  n.    p t   n th r   b t n 
t  l r     n pr d  t  n  xp n   ,  r    r t rn 
  r   n   h t  b   t n t f r   n      b  t
t   f fth  h  h r th n th  d pr    d $20
b ll  n  n     .
 h    tr n  p rf r  n     ntr  t d
 h rpl    th  n t  l f r    t   f  n th r    r  f
l     rn n  . It  l   b l  d    h  f th    n 
  rn th t h d pr  pt d th  A  r   n
A r   lt r l M v   nt t     nt  n   f th 
 tr n   t f r  l bb  n   ff rt   v r    n.
  nd v l     nd   p t l  p nd n  r   
I pr v d f r    rn n   l d t     tr n 
r   v r   n   p t l  p nd n   nd    r    v 
b dd n  f r f r l nd. It      t   t d th t
f r l nd v l    r      t nth l  t    r,   r  n 
  thr  f ld  n r       n   th  b   nn n   f
th     0 . Ev n b    r  n r        r     n  n
th  M d   t,  h r    rv    b  th    d r l
    rv    n   f Ch       h   d f r l nd
v l    r     b  t    p r  nt.   r   n 
f r  r  th t   n th  r l nd, th   nr  l z d
   n fr    ppr    t  n  n l nd v l        n
  rp    d th  n t  p r t n  r t rn  t  l nd.
. . .  nd n  th  4    r  l d   n
n t f r   n     p r f r 
th    nd d ll r 
 2 —
  d r l     rv    n   f Ch     	    00   
W th th  r   r  bl   ppr    t  n  n l nd
v l    h          n  rn th t n nf r  r  n 
v  t r      b     tr n  r    p n nt  n th 
d   nd f r l nd. C n  rn f     d l  t    r
 n f r   n  nv  t r , p rtl  b        f th 
b dd n   dv nt     th t    r  d t      
f r   n b   r  fr   th  d  l n   n th  v l  
 f th  d ll r. Alth   h  t      n r ll  b l  v d
th t f r   n   n r h p  f l nd     t    t
n   n l, th  f  t   r  n t  n  n.    pr v d 
 nf r  t  n f r  n  bj  t v          nt  f
th    t  t  n, C n r    p    d th  A r  
  lt r l   r   n Inv  t  nt     l   r  A t
l t  l  t    r.  h    t   t  p   n t  n  d 
   t   f r    p n  tr     f th      nt  f
l nd f r   n r    n  nd th      nt th   b  
 n th  f t r .
 h  r   v r   n   p t l  xp nd t r  
 h   d  p p rt   l rl   n p r h      f
   h n r   nd     p  nt  nd   n tr  t  n
 f  r  n  t r    f   l t   . In th  f r t   
  nth   f th     r,  n t r t  l   l    f f r 
tr  t r    r  6 p r  nt h  h r th n  n th    r 
r  p nd n  p r  d      r   rl  r. S l    f
   b n     r   p   p r  nt.  h     n r     
  r   n  h rp   ntr  t t  th   l     h   l  
f r    t  n   rl     8 th t l d t  l   ff   nd
     d        n f  t r r  t   h t d  n
pl nt  f r    h l .
Inf r  t  n  n  xp nd t r   f r n  
 r  n  t r    f   l t          t h . It     l  r,
h   v r, th t   b t nt  ll    r       p nt
th n  n  th r r   nt    r . A l b r l z d
  v rn  nt l  n pr  r   h lp d f n n  
 v r   0   ll  n b  h l   n n    n f r 
 t r      p   t   n f    l    8.  h t    
    v l nt t  n  rl    th rd  f th   t r   
f   l t    b  lt  nd r th  l  n pr  r   d r n 
th  pr v     2     r   t h d b  n  n  x  t n  .
Oth r f   l t      r  b  lt, n  d  bt,   th
pr v t  f n n  n . Ov r ll, f r  r  pr b bl 
 xp nd d th  r  t r      p   t   b  t   t nth
l  t    r.
 h  r    n f r th    r    n   n tr  t  n
 f  n f r   t r    f   l t        th  n    r  n
r   rv  pr  r     th r z d  n l t      .  h 
pr  r      d    n d t    thh ld  r  n fr  
th    r  t f r thr      r   r  nt l pr      t th 
f r  r     p t    t bl  h d tr    r l v l .   
l t       b r,      ll  n   tr   t n   f  r  n
 h  b  ld p  n   rr  v r  t    
 f  r  n     xp  t d t    nt n  
 nt  n xt    r
  ll  n   tr   t n 	 p r  nt  f  t l z t  n
 20 —	 4 
  6 	  6 	  6 	    	    	    	    	     
 r  n   r  t n     r  nd n   n
 US A pr j  t  n.
h d b  n       l t d  nd r th  pr  r  ,
 n l d n  4 0   ll  n b  h l   f  h  t  nd
 20   ll  n b  h l   f   rn.  h t r pr   nt 
 b  t h lf  f th  pr j  t d   rr  v r  t      f
 r  n.
A r   lt r   nd th  r  t  f th     n   
I pr v d f r    rn n   r fl  t d
 tr n th  n b th d    t    nd f r   n
  r  t  b t l ft d v r  nt   pl   t  n  f r
t        r    f th     n     v r ll.  h 
v l    f   r   lt r l  xp rt  r    t    n  
h  h  n f    l    8, h lp n   ff  t th  b ll  n 
 n  d f   t  n n n  r   lt r l tr d .   t th r 
     l    n    n    d v l p  nt  n   r  
  lt r      ntr b t  n t  th  r   ndl n   f  n 
fl t  n r  pr    r  .
   rl   22   ll  n   tr   t n   f f r 
     d t      r   h pp d  br  d  n th 
f    l    r th t  nd d  n S pt  b r.  h t    
n  rl    f fth   r  th n th   h p  nt   n f    l
      nd     v nth   r  th n th  pr v    
h  h  n f    l    6.  h   n r           d 
d  p t  tr n p rt t  n  n rl  d r n  th 
  nt r  nd  h rt      f r  l   r  d r n  th 
 pr n   nd      r,  h n  r  n  nd    b  n
 h p  nt    r   x  pt  n ll  h  h.
W th f  d  r  n  nd    b  n pr     d  n
 2	 E  n       r p  t v  fr   th     r b f r , n t  ll th   n r      n
 h p  nt      r fl  t d  n th  v l    f  x 
p rt .  h  v l    f f r   xp rt , n v rth l   ,
r    t  $2 .  b ll  n  n f    l    8  4 p r  nt
  r  th n th  pr v        r. I p rt   f
  r   lt r l pr d  t ,  n th   th r h nd,
  r   p  nl  n   n ll , l  v n   n   r  
  lt r l tr d    rpl    f $  .4 b ll  n.
   p t  th  d  l n n  v l    f th  d ll r,
 xp rt  t     h  tr n    rr n      ntr      
  p n  nd th     n W  t rn E r p   n r    d
l ttl   n f    l    8. At      b n d $   b ll  n,
f r   xp rt  t    p n  nd W  t rn E r p 
  r   p  nl  4 p r  nt.
     ntr  t,  xp rt  t  th  S v  t Un  n
 n r    d  b  t thr   f  rth , n  rl      l 
 n  th  $2 b ll  n  n    6. M  nl nd Ch n ,
 ft r thr      r   f v rt  l  b  n   fr  
A  r   n f r    r  t ,   p rt d  v r $  0
  ll  n  n   r   lt r l pr d  t  fr   h r  l  t
   r. A r   lt r l  xp rt  t    t n A  r     n 
 r    d n  rl    th rd, t  $2.8 b ll  n. Exp rt 
t  Afr   n    ntr      r   p  b  t   f fth,  nd
 xp rt  t  A   n    ntr   — x l d n    p n
 nd    nl nd Ch n —  r   p     xth.
   d pr        r d
  t  l f  d pr        r d  t  n  nn  l
r t   f  8 p r  nt  n th  f r t h lf b t  l   d t 
 n  nn  l r t   f   p r  nt  n th      nd h lf.
  r th   h l     r, f  d pr      v r   d  
t nth h  h r, t     th   n r     f r    t  
   r    .    h r pr     f r r   f  d   t r  l 
     nt d f r  b  t h lf  f th  r   .    h r
   t  f r pr      n   nd d  tr b t  n    
   nt d f r t   f fth .
 r     f r r d    t , p  ltr , f  h,  nd
      v r   d    p r  nt h  h r l  t    r,
l r  l  b        f th  pr n  n  d r   v r 
 n d   nd.   r   p t    ppl     f  ll    t,
 lth   h l    th n  xp  t d,   r  d  n  nl 
  p r  nt fr   th       r   rd.  h    x  n
   t pr d  t  n  h ft d, h   v r, r   lt n 
 n   r  p  ltr   nd l    b  f.   r  pr d   
t  n     v rt  ll   n h n  d.
  t  l pr      f fr  t   nd v   t bl  
 v r   d    p r  nt h  h r l  t    r. M  h  f
th  r        r l t d t     th r.   r th      
 nd   nt r  n   r  , pr d     n  l r d     
C n    r   t    r  p  ltr 
th n p r   n    8
p  nd  p r   p t  
 00 —
80
40
20
     	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	 I	  	  	  	  	  	 I	  
   6   8  60  62  64  66  68   0   2   4   6   8
   t  l     ht b    .
tr    d b    fr  z . And  n C l f rn  ,  n  n 
    ll    r    nt r    pl d   th h  h   nd 
 nd  x     v  r  n  n th   pr n   nd      r
r d   d th  pr d  t  n  f   v r l d ff r nt
fr  t   nd v   t bl  .
G v rn  nt pr  r     l   p t pr    r 
 n f  d pr     l  t    r.  h  r t h t n   p  n
d  r    pp rt , f r  n t n  ,   ntr b t d t   n
 v r    r     f   p r  nt  n r t  l d  r 
pr d  t pr    .         ,  h n     n   v rn 
  nt pr  r    th t b   t d  h  t pr    
h lp d p  h  v r    r t  l pr      f   r  l 
 nd b   r  pr d  t    p r  nt h  h r. And
  v rn  nt   t  n  t    pp rt d    t  
    r pr d   r  l d t     2 p r  nt  v r   
r     n r t  l pr      f     r   nd     t .  h  
    d  p t  th     t b rd n       rld
    r   rpl    n    r .
  v     nd   tl    b       d t   
On   f th    rpr      n    8     th  l   
 f  n  n r      n p r  pr d  t  n.  h    n 
  n         r         th t p r  pr d  t  n
   ld  n r      t l   t   t nth,      n  h  
pr     t  pl n  . In t  d, p r  pr d  t  n
    v rt  ll   n h n  d. And h   pr    ,
r fl  t n     ll r   ppl     f b  f  nd  
pr n  n  d r   v r   n d   nd, r    n  rl 
  f fth t   v r    $48. 0 p r h ndr d    ht.
  d r l     rv    n   f Ch     	    h  d  nt rn  n th    ttl     l    
th     t pr n  n  d   n   th    20 
  ll  n h  d
 40
60
40
0   2   4   6   8    0     2
l n th  f    l   n    r 
 h  f  l r   f p r  pr d  t  n t  r   
p nd t  th   tr n   t  n  nt v   f r  xp n 
   n  n d   d      n t f ll   nd r t  d.  h 
h r h   nt r         ntr b t n  f  t r,
h   v r. And   n   n l  t  b l  v  th   h ft
 n r   nt    r  t    r    p t l  nt n  v 
pr d  t  n f   l t        h v  l n th n d
th  pr d  t  n r  p n      l .
Wh t v r th  r    n f r th  p rf r 
  n   l  t    r,   nd t  n   t ll p  nt t      b 
 t nt  l r     n p r  pr d  t  n. A      b r
  rv    f r   nt  nd pr  p  t v    t  n  b 
h   f r  r   h   d th t p r  pr d  t  n
   ld r      t nth  n     . An  n r      f th t
  z     ld p  h h   pr     l   r  nd  ff  t
   h  f th   xp  t d d  l n   n b  f pr d   
t  n. W th th  f rth r l   l h  d  f   b t n 
t  ll  l r  r p  ltr  pr d  t  n, p r   p t 
  n   pt  n  f  ll    t     ld  n r    
 l  htl  th      r.
 h    x  n   ttl   l   ht r l  t    r
  v d  l   r t  th  n r   f th    rl     0    
th  l    d t  n ph     f th    ttl     l 
   nd d  n.  h    v   nt  f   ttl 
thr   h f  dl t  r    t    n  r r   rd l v l,
b   t n  f d   ttl   l   ht r   p r  nt.   t
n nf d  t  r  nd h  f r  l   ht r       t  n
h lf  nd      l   ht r     r d   d    p r 
  nt, r   lt n   n   4 p r  nt d  l n   n t t l
b  f pr d  t  n.  h  d  l n , b ttr    d b 
 tr n  d   nd, p  h d  h      t  r pr     t 
  r   rd  v r     f $ 2.2  p r h ndr d 
    ht, n  rl   0 p r  nt h  h r th n th 
   r b f r .
   t r   nd rl  n  th  p  t t      r   f
d  l n   n b  f pr d  t  n  r  t  d t  th 
  ttl     l .  h  h    f n n   l l      th t
 t    r d   ttl   n fr      4 t      
tr    r d        v  l    d t  n  f th 
br  d n  h rd, t  p r r l     ll n  b  f
  ppl   .  h  l    d t  n, h   v r, h  
r d   d th   nv nt r   f b  f      (n t  f
 dd t  n  thr   h r pl     nt h  f r   n  r 
l    f fth  v r th  p  t f  r    r . W th f   r
    ,   lf  r p  h v    tt n    ll r. E  
t   t    h   th     8   lf  r p     th 
   ll  t  n       r . And th   r p    ld b 
   ll r  n     .
I pl   t  n   f th   h rp r d  t  n  n th 
    h rd  r  n t  n   r   n  f r n  r t r 
b  f   ppl   . C lf  r p   r  n t l r    n   h
t     nt  n p  t l v l   f b  f pr d  t  n  nd
       d t  th  h rd r b  ld n  th t   
n  d d f r f t r   r  th  n   n   pt  n.
If   r  t f r     n   r    h rd
r b  ld n , b  f pr d  t  n   ll tr nd l   r
f r th  n xt t    r thr      r .   r   p t  b  f
  n   pt  n    ld dr p t  th  l v l   f th 
l t    60 . And   ttl  pr        ld r    t  n  
h   ht .  h   xt nt  f th  r     n pr       ll
d p nd    tl   n th   v  l b l t   f p r   nd
p  ltr   nd th    ll n n     f   n    r  t 
   t h t  th     th r    t   h l  b  f
  ppl     r  t  ht.
   r  f r  r  r    v d h  h r pr      nd
  rn d   r   n    8,  nd th  r pr  p  t 
         ll  br  ht f r     .  r     f r  r 
r    v d f r   l   v r   d   p r  nt h  h r
th n  n     .  h   n r          l r  l      
r   lt  f th   t t t r       nn  l  n r       n
d  r    pp rt pr    . M l  pr d  t  n d  
 l n d n   n ll  b t  t ll  x   d d th  r   rd
    nt  t l z d      r   ll .  h  b tt r
b l n   b t   n pr d  t  n  nd  t l z t  n
 ll   d   v rn  nt p r h      f   n f   
t r d d  r  pr d  t  (th     h n    f r   p 
p rt n  pr      t  d  l n    r  th n   h lf
fr   th  h  h l v l      r   rl  r.
   h r   pp rt pr       ll   ntr b t  t 
 n th r r     n   rn n    f d  r  f r  r  th  
   r. M l  pr d  t  n      d    p   l ttl ,
 4	 E  n       r p  t v   80
 60
 40
 20
 00
 ll  r p 
C rn  nd    b  n  p ll d  ll  r p
pr d  t  n t    n   h  h  n    8
 nd x,   6 = 00
200 —
80=
  lt 	 I	 I	 I	 I	 I	 I	 I	 III
  6   66  6   68  6    0       2       4       6      8
b t h  h     pr       ll pr b bl   n   r   
f rth r   ll n   f th  d  r  h rd.   rr n   
d  nt rn  n th    n r l    n   , d   nd   
 xp  t d t  r    n  tr n , f  l d  n p rt b   
r b  ld n   n th  l        r   l  t      f
d  r  pr d  t .
Gr  n  nd    b  n pr       r    p 
p rt d thr   h  t    h  f l  t    r b  th 
dr  th r d   d h rv  t   n th  S  th rn
     ph r .  h     b n d A  tr l  n  nd
Ar  nt n  n  h  t h rv  t       t   th rd l  t
  nt r. In  r z l, th     b  n h rv  t l  t
 pr n        f  rth l    th n  xp  t d.  h   
r d  t  n   n    p t n    ppl     v r    —
 nd tr n p rt t  n pr bl     n C n d —
  v  U.S.  xp rt r    d   d d  d    n
   t n  th   tr n    rld d   nd f r  r  n 
 nd   l   d .
 r     dr ft d  l  htl  l   r  n th      nd
h lf     t b       pp r nt th t  r  n  r p   n
th    rth rn      ph r     ld b  v r 
l r  .   n l   t   t    h   th  Un t d St t  ,
W  t rn E r p ,  nd th  S v  t Un  n  ll
br   ht  n r   rd h rv  t .
In th  Un t d St t  , r d   d pl nt n  
  t  h  t pr d  t  n  2 p r  nt.   t   rn
pr d  t  n r      t nth, t    r   rd  .  b ll  n
b  h l .   r   r    rn    ld   x   d d  0 
b  h l , t n b  h l   b v  th  pr v        r
 nd f  r b  h l   b v  th  pr v     h  h  n
   2.  h     b  n h rv  t,  t   r   rd  .8
b ll  n b  h l ,      p   p r  nt.  h    l v l 
  r  r   h d d  p t  l t  pl nt n    nd th 
f r t      f v l nt r    r       ntr l    n  
    .
  r    r p h rv  t  th  p  t t      r 
h v  pr v d d   r  th n  d    t    ppl   
 f  r  n.      t     rr  v r  t     r    t   4
  ll  n   tr   t n   n    8,  p   f fth fr   th 
   r b f r .  r j  t  n   h   th    rr  v r
r   n  t          r h  h  f 86   ll  n   tr  
t n   n     . E   l t    th rd  f th   xp  t d
 t l z t  n, th t   ll b  th  l r   t  t   
r l t v  t   t l z t  n   n     rl   n th 
d   d . C rn      nt  f r  ll  f th  pr j  t d
 n r      n   rr  v r  t      f  r  n.
 h  r l t v        l t  n  f    b  n
  rr  v r h   b  n f r   r    d  t.  r j   
t  n   r  th     b  n   rr  v r th      r   ll
 t ll b  l    th n   t nth  f  t l z t  n.
 r      f  r  n   nd    b  n    ll b 
 tr n l   nfl  n  d th      r b  f r   n d  
  nd  nd  r   n    nd t  n   r  nd th 
  rld. M  nl nd Ch n    ll   p rt l r  
    nt   f  r  n fr   th  Un t d St t  .   t
 xp rt  t   th r    ntr        b       h t
 r d d b  th  l r     rld   ppl   , p r 
t   l rl   f  h  t  nd    b  n pr d  t  n  n
th  S  th rn      ph r  r t rn  t  th 
r   rd l v l   xp  t d th     nt r  nd  pr n .
     t    r p pr d  t  n  n        ll
l   l  r fl  t l r  r pl nt n  . Wh  t   r    
  ll b   p   b t nt  ll . In th  M d   t,
f r  r    ll l   l    b t t t     b  n  f r
       rn   r    .   n l pr d  t  n pr   
p  t ,  f    r  ,   ll h n   l r  l   n th 
v   r     f    th r.
  d r l     rv    n   f Ch     	   

Agriculture: farm income recovers

http://www.chicagofed.org/digital_assets/publications/economic_perspectives/1979/ep_jan_feb1979_part2.pdf

Agriculture: farm income recovers

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Research Papers in Economics