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A Simple Empirical Model of Macroeconomic Effects on Agriculture: An Asset Market Approach

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  • Kitchen, John

Abstract

The asset market approach specifies a direct relationship between flexible prices and the growth of the money supply in excess of real money demand. The model described in this report uses the asset market approach in estimating macroeconomic effects on agricultural prices, cash receipts, and land values. Agriculture-specific effects are also included in the model through a use-to-stock ratio variable. Simulations are run to illustrate the effects of alternative monetary and agricultural situations on the agricultural variables.

Suggested Citation

  • Kitchen, John, 1989. "A Simple Empirical Model of Macroeconomic Effects on Agriculture: An Asset Market Approach," Staff Reports 278199, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278199
    DOI: 10.22004/ag.econ.278199
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    References listed on IDEAS

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    1. Feldstein, Martin, 1982. "Government deficits and aggregate demand," Journal of Monetary Economics, Elsevier, vol. 9(1), pages 1-20.
    2. Kitchen, John & Denbaly, Mark, 1987. "Commodity Prices, Money Surprises, and Fed Credibility: A Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(2), pages 246-251, May.
    3. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-1176, December.
    4. Mussa, Michael, 1982. "A Model of Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 74-104, February.
    5. Frankel, Jeffrey A & Hardouvelis, Gikas A, 1985. "Commodity Prices, Money Surprises and Fed Credibility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(4), pages 425-438, November.
    6. Hsiao, Cheng, 1981. "Autoregressive modelling and money-income causality detection," Journal of Monetary Economics, Elsevier, vol. 7(1), pages 85-106.
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    Cited by:

    1. Kitchen, John & Mack, Elizabeth, 1991. "Macroeconomic Shocks: Effects on the General Economy, Agricultural Prices, and Rural Unemployment," Staff Reports 278583, United States Department of Agriculture, Economic Research Service.

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