Agriculture in a Dynamic Cross-Sector Model

The assumption of adjustment costs is used to specify a dynamic model of the U.S. economy. Output is divided into in three sectors: agriculture, manufacturing, and services. The advantage of this approach is that it can measure more factors that contribute to productivity growth than a static model. Output growth and productivity are measured using data and parameters from an estimated dynamic model. Parameters that are unique to dynamic models and a returns-to-scale measure make up part of the productivity calculations. Dynamic components of productivity are less than 5 percent of productivity growth for most years. This occurs because dynamic components of productivity are a function of returns to scale, and production is measured to be close to constant returns to scale. Elasticities from the estimated model show that both manufacturing and service prices have a major impact on agricultural output. Own-price elasticities are relatively small for agriculture.


Issue Date:
1996-10
Publication Type:
Report
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/278815
Language:
English
Total Pages:
28
Series Statement:
AGES 9618




 Record created 2018-10-22, last modified 2020-10-28

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