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Effects of Fiscal Policy on Agriculture and the Rural Economy

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  • Kitchen, John
  • Orden, David

Abstract

We found little evidence in the literature regarding fiscal policy to support a relationship between deficits, interest rates, and exchange rates. We present some empirical evidence suggesting that real growth, the trade balance, and soybean prices are affected by Federal budget deficits. However, fiscal policy seems less important than monetary policy in the determination of real activity and interest rates. Fiscal policy is also less important than monetary policy--or commodity-specific production, use, and stocks--in the determination of agricultural commodity prices. Simulation results suggest that fiscal policy changes do not have significantly different effects on the nonmetro unemployment rate relative to the total civilian unemployment rate.

Suggested Citation

  • Kitchen, John & Orden, David, 1991. "Effects of Fiscal Policy on Agriculture and the Rural Economy," Staff Reports 278556, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278556
    DOI: 10.22004/ag.econ.278556
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    References listed on IDEAS

    as
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