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Will rural prosperity prevail in 2008?


  • Jason Henderson
  • Maria Akers


The rural economy was strong in 2007. Record farm incomes were fueled by rising ethanol demand and by stronger export demand, which was driven in part by a weaker dollar. Farmers used the year’s higher profits both to strengthen their financial conditions and to boost investment in land and equipment. Meanwhile, businesses on Main Streets reaped benefits from the higher farm spending, and the fortunes of energy-dependent regions brightened with higher energy prices. ; As the year progressed, however, the outlook for the rural economy began to dim. Following national trends near the end of the year, Main Street activity waned. The higher costs for gas and heating fuel pinched rural household budgets. And, despite robust outlooks for ethanol production and exports, rising energy costs began to trim profit margins for farm and nonfarm businesses alike.

Suggested Citation

  • Jason Henderson & Maria Akers, 2008. "Will rural prosperity prevail in 2008?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 69-86.
  • Handle: RePEc:fip:fedker:y:2008:i:qi:p:69-86:n:v.93no.1

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    References listed on IDEAS

    1. Todd E. Clark & Michael W. McCracken, 2009. "Improving Forecast Accuracy By Combining Recursive And Rolling Forecasts," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(2), pages 363-395, May.
    2. Cogley, Timothy, 2002. "A Simple Adaptive Measure of Core Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(1), pages 94-113, February.
    3. Todd E. Clark, 1999. "A comparison of the CPI and the PCE price index," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 15-29.
    4. Clinton P. McCully & Brian C. Moyer & Kenneth J. Stewart, 2007. "A Reconciliation between the Consumer Price Index and the Personal Consumption Expenditures Price Index," BEA Papers 0079, Bureau of Economic Analysis.
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    Rural areas ; Rural development ; Farm income;


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