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Price Equilibrium or Price Disequilibrium in the Corn Sector

Published online by Cambridge University Press:  10 May 2017

Harry S. Baumes Jr.  and
Abner W. Womack
Harry S. Baumes Jr.
Affiliation:
Policy Systems Section of the Food and Agricultural Policy Branch
Abner W. Womack
Affiliation:
World Analysis Branch
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Extract

Agricultural policy makers are aided in the decision making process by analytical models. This implies that national agricultural policy is dependent on the correctness of the model's structure and specification. Traditionally, econometric models of the crop sector have been estimated in a price equilibrium framework. Heien (1977) summarizes this as a system where supply and demand interacts to determine price. This conceptualization places a heavy burden on the stock equation; ending commercial stock equations often perform very poorly, and therefore, reduced form estimates, particularly for price, tend to reflect this corresponding error.

Type
Contributed Papers
Information
Journal of the Northeastern Agricultural Economics Council , Volume 8 , Issue 2 , October 1979 , pp. 275 - 288
Copyright
Copyright © Northeastern Agricultural and Resource Economics Association 

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Footnotes

The views expressed in this paper are solely the authors and do not necessarily reflect those of the USDA.

References

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