Modeling Dynamic Adjustment in a Multi-Output Framework

摘要

A multi-output model is developed within the adjustment cost framework to analyze the structure of dynamic adjustments in U.S. agriculture during the postwar period. An important feature of the model is the econometric model's consistency with dynamic economic theory. Fluctuations in capital stocks, variable inputs, and outputs are explained by changing opportunity costs. Empirical results indicated that durable equipment, farm-produced durables, and family labor exhibited significant rigidity in adjustment as a response to exogenous shocks. The hypothesis that real estate was a variable input, surprisingly, could not be rejected. The univariate flexible accelerator hypothesis, which is widely maintained in most agricultural adjustment studies, is inconsistent with the data.