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Abstract

The paper presents an econometric model of dynamic agricultural input demand functions that include research based technical change and autoregressive disturbances and fits the model to annual data for a set of state aggregates pooled over 1950-1982. The methodological approach is one of developing a theoretical foundation for a dynamic input demand system and accepting state aggreage behavior as approximated by nonlinear adjustment costs and long-term profit maximization. Although other studies have largely ignored autocorrelation in dynamic input demand systems, the results show shorter adjustment lags with autocorrelation than without. Dynamic input demand own-price elasticities for the six input groups are inelastic, and the demand functions possess significant cross-price and research effects.

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