a century of u s farm productivity growth a surge then a slowdown u s farm productivity growth has direct consequences for sustainably feeding the world s still rapidly growing population as well as u s competitiveness in international markets using a newly expanded compilation of multifactor productivity mfp estimates and associated partial factor productivity pfp measures we examine changes in the pattern of u s agricultural productivity growth over the past century and more considering the evidence as a whole we detect sizable and significant slowdowns in the rate of productivity growth in recent decades u s multifactor productivity grew at an annual average rate of just 1 16 per year during 1990 2007 compared with 1 42 per year for the period 1910 2007 u s yields of major crops grew at an annual average rate of 1 17 per year for 1990 2009 compared with 1 81 per year for 1936 1990 more subtly but with potentially profound implications the relatively high rates of mfp growth during the third quarter of the century are an historical aberration relative to the long run trend

capital as a factor of production in oecd agriculture measurement and data this article provides a farm sector comparison of levels of capital input for fourteen oecd countries for the period 1973 to 2002 the starting point for construction of a measure of capital input is the measurement of capital stock estimates of depreciable capital are derived by representing capital stock at each point of time as a weighted sum of past investments the weights correspond to the relative efficiencies of capital goods of different ages so that the weighted components of capital stock have the same efficiency estimates of the stock of land are derived from balance sheet data we convert estimates of capital stock into estimates of capital service flows by means of capital rental prices comparisons of levels of capital input among countries require data on relative prices of capital input we obtain relative price levels for capital input via relative investment goods prices taking into account the flow of capital input per unit of capital stock in each country

testing for behavioral objective and aggregation opportunities in u s agricultural data to guide formulation of an aggregate model of u s agricultural production this paper reports nonparametric test results for both behavioral objective and aggregation level nonparametric tests are implemented as heuristics to determine empirical support for simplified analytical structures evidence does not refute the joint hypothesis that producers behave collectively as though they are a price taking profit maximizing firm with a convex technology subject to nonregressive technical change the empirical results also support exhaustive aggregation of input categories but much less aggregation of outputs this paper reports the first known implementation of the nonparametric homothetic separability tests

do formula or competitive grant funds have greater impacts on state agricultural productivity this article examines the impact of public agricultural research and extension on agricultural total factor productivity at the state level the objective is to establish whether federal formula or competitive grant funding of agricultural research has a greater impact on state agricultural productivity a pooled cross section time series model of agricultural productivity is fitted to annual data for forty eight contiguous states over 1970 1999 our results show that public agricultural research and agricultural extension have statistically significant positive impacts on state agricultural productivity in addition hatch formula funding has a larger impact on agricultural productivity than federal competitive grant funding and a reallocation of hatch formula funds to competitive grant funding would lower agricultural productivity this seems unlikely to be a socially optimal policy furthermore from a cost benefit perspective our study shows that the social marginal annualized real rate of return to public resources invested in agricultural research is 49 62 and to public agricultural extension the rate is even larger

self fulfilling currency crises the role of interest rates abstract we develop a stylized currency crises model with heterogeneous information among investors andendogenous determination of interest rates in a noisy rational expectations equilibrium our modelcaptures three key features of interest rates the opportunity cost of attacking the currency respondsto the investors behavior the domestic interest rate may influence the central bank s preferences fora fixed exchange rate and the domestic interest rate serves as a public signal which aggregatesprivate information about fundamentals we explore the payoff and informational channels throughwhich interest rates determine devaluation outcomes and examine the implications for equilibriumselection by global games methods our main conclusion is that multiplicity is not an artifact ofcommon knowledge in particular we show that multiplicity emerges robustly either when adevaluation is triggered by the cost of high domestic interest rates as in obstfeld 1996 or when adevaluation is triggered by the central bank s loss of foreign reserves as in obstfeld 1986 providedthat the domestic asset supply is sufficiently elastic in the interest rate and shocks to the domesticbond supply are sufficiently small christian helliwigdepartment of economicsuniversity of california los angelesbox 951477los angeles ca 90095 1477arijit mukherjiuniversity of minnesotaaleh tsyvinskidepartment of economicsharvard universitylittauer centercambridge ma 02138 3001

how debt markets have malfunctioned in the crisis the financial crisis that began in 2007 is especially a crisis in debt markets a full understanding of what happened in the financial crisis requires investigation into the plumbing of debt markets during a financial crisis when funds often cannot be raised easily or quickly the fundamental values for certain assets can become separated for a time from market prices with consequences that can echo into the real economy this article will explain in concrete ways how debt markets can malfunction with deleterious consequences for the real economy after a quick overview of debt markets i discuss three areas that are crucial in all debt markets decisions risk capital and risk aversion repo financing and haircuts and counterparty risk in each of these areas feedback effects can arise so that less liquidity and a higher cost for finance can reinforce each other in a contagious spiral i will document the remarkable rise in the premium that investors placed on liquidity during the crisis next i will show how these issues caused debt markets to break down indeed fundamental values and market values seemed to diverge across several markets and products that were far removed from the toxic subprime mortgage assets at the root of the crisis finally i will discuss briefly four steps that the federal reserve took to ease the crisis and how each was geared to a specific systemic fault that arose during the crisis

transparency of information and coordination in economies with investment complementarities how do public and private information affect equilibrium allocations and social welfare in economies with investment complementarities and what is the optimal transparency in the information conveyed for example by economic statistics policy announcements or news in the media we first consider an environment where the complementarities are weak so that the equilibrium is unique no matter the structure of information an increase in the precision of public information may have the perverse effect of increasing aggregate volatility nevertheless as long as there is no value to lotteries welfare unambiguously increases with an increase in either the relative or the absolute precision of public information hence full transparency is optimal this is because more transparency facilitates more effective coordination which is valuable from a social perspective on the other hand when complementarities are strong enough that multiple equilibria are possible more transparency permits the market to coordinate more effectively on either the bad or the good equilibrium in this case constructive ambiguity becomes optimal if there is a high risk that more transparency will lead to coordination failures this abstract was borrowed from another version of this item

output input and productivity measurement in u s agriculture 1948 79 tornqvist theil indexes of outputs and inputs are constructed these data are used to construct indexes of productivity growth over the postwar period the productivity indexes can be derived from a flexible multioutput multifactor representation of the structure of production constrained to constant returns to scale total factor productivity grew at an average annual rate of 1 75 compared with 1 70 per year estimated by the u s department of agriculture the similar estimates of productivity growth overshadow some important differences in measurement of individual inputs the major effort in measuring agricultural productivity is undertaken by the u s department of agriculture usda an american agricultural economics association task force on measuring productivity has examined the sources and procedures used in constructing the official statistics see loomis and barton lambert barton and durost the task force recommended that the usda adopt a series of specific improvements for constructing certain inputs and use an indexing procedure that does not impose a priori restrictions on the structure of production 1 this paper presents revised indexes of outputs and inputs the data are used to construct indexes of productivity growth over the postwar period the productivity indexes can be derived from a flexible multioutput multifactor representation of the structure of production the translog transformation function constrained to constant returns to scale 2 the indexes of outputs and inputs have the same form and their ratio coincides with the estimate of productivity growth

bubbles crashes and endogenous uncertainty in linked asset and product markets in laboratory asset markets subjects trade shares of a firm whose profits in a linked product market determine dividends treatments vary whether dividend information is revealed once per period or in real time and whether the firm is controlled by a profit maximizing robot or human subject the latter variation induces uncertainty about firm behavior bridging the gap between laboratory and field markets our data replicate well known features of laboratory asset markets e g bubbles suggesting these are robust to a market based dividend process compared to a sample of previous experiments both real time information revelation and endogenous uncertainty impede the bubble mitigating impact of experience

estimation of substitution possibilities between water and other production inputs the traditional approach to measuring the demand for water by industries relies upon fixed water use coefficients water supply planners base decisions about system expansion partly upon fixed coefficients applied to projected levels of industrial growth among the restrictive assumptions implied by this approach is that producers are generally unresponsive to the relative price of water compared with other factors earlier studies focused on industry by industry assessments of present and potential water use technologies and the possibilities for substituting other productive inputs for water most of these studies are economic engineering in form thompson and young and russell are analyses of the steam electric generating industry and the petroleum refining and petrochemical industry respectively because they used linear programming techniques their results must be interpreted cautiously the flexible functional forms which have become

acreage decisions under risk the case of corn and soybeans an acreage supply response model is developed under expected utility maximization the resulting framework is used to specify and estimate a system of risk responsive acreage equations for corn and soybeans in the united states particular attention is given to the truncation effects of government price supports on the distribution of corn and soybean prices also a wealth variable is included in the acreage equations the empirical results indicate that risk and wealth variables play an important role in cornsoybean acreage decisions the analysis also shows that cross commodity risk reduction is important in acreage allocation decisions

contagion of self fulfilling financial crises due to diversification of investment portfolios abstract we look at two countries that have independent fundamentals but share the same group of investors each country might face a self fulfilling crisis agents withdrawing their investments fearing that others will a crisis in one country reduces agents wealth this makes them more averse to the strategic risk associated with the unknown behavior of other agents in the second country increasing their incentive to withdraw their investments consequently the probability of a crisis there increases this generates a positive correlation between the returns in the two countries since diversification affects returns in our model its welfare implications are non trivial

equilibrium selection in static and dynamic entry games abstract we experimentally assess the predictive power of two equilibrium selection principles for binary n player entry games with strategic complementarities in static entry games we test the theory of global games which posits that players play games of complete information as if they were playing a related global game of incomplete information by contrast in dynamic n period entry games the efficient subgame perfect equilibrium prediction is for all to enter whenever the payoff relevant state variable exceeds a certain threshold the subgame perfect entry threshold of the dynamic game will generally differ from the global game threshold of the static version of the same game nevertheless our experimental findings suggest that entry thresholds are similar between static and dynamic versions of the same game an implication is that the modeling of entry games with strategic complementarities as static one shot games ignoring the dynamic element of such interactions may not be unreasonable

public information and coordination evidence from a credit registry expansion this paper provides evidence that lenders to a firm close to distress have incentives to coordinate lower financing by one lender reduces firm creditworthiness and causes other lenders to reduce financing to isolate the coordination channel from lenders joint reaction to new information we exploit a natural experiment that forced lenders to share negative private assessments about their borrowers we show that lenders while learning nothing new about the firm reduce credit in anticipation of other lenders reaction to the negative news about the firm the results show that public information exacerbates lender coordination and increases the incidence of firm financial distress

risk pre play communication and equilibrium abstract we report an experiment with a 3 3 game with a unique and efficient equilibrium however each player s equilibrium strategy may result in a very low payoff if the other player does not use her equilibrium strategy players can avoid this possibility by playing an alternative safe strategy when players have no opportunity for pre play communication over 80 of subjects choose the safe strategy however we observe substantial increases in the amount of equilibrium play when i the riskiness of the equilibrium strategy is reduced and ii subjects have opportunities to send non binding costless messages to one another prior to playing the game

imperfect price deflation in production systems numeraire prices that are measured with error create challenges for econometric estimation a straightforward approach for a model with linear input demands such as generated from a quadratic normalized profit function is proposed where the numeraire price is measured with error numeraire measurement error is likely because expected output price is measured imperfectly by actual output price an approach using generalized method of moments is developed to estimate such errors in variables systems that avoids use of extra sample data or additional structural specifications monte carlo examination of small sample properties shows promise measurement error is statistically significant using aggregate u s agricultural data

how do market prices and cheap talk affect coordination in many scenarios such as banking and liquidity crises inefficiencies often arise because investors face uncertainties about economic fundamentals and the strategies of other investors how information affects fundamental uncertainty is well studied but how information affects strategic uncertainty is underexplored this paper examines how two communication mechanisms market and cheap talk affect investment decisions and efficiency in an experimental investment game with both fundamental and strategic uncertainty i find that the market does not improve coordination because the expectation that coordination failures will occur is self fulfilling while cheap talk improves coordination because the signals of willingness to invest alleviate strategic uncertainty

unique equilibrium in a model of self fulfilling currency attacks even though self fulfilling currency attacks lead to multiple equilibria when fundamentals are common knowledge we demonstrate the uniqueness of equilibrium when speculators face a small amount of noise in their signals about the fundamentals this unique equilibrium depends not only on the fundamentals but also on financial variables such as the quantity of hot money in circulation and the costs of speculative trading in contrast to multiple equilibrium models our model allows analysis of policy proposals directed at curtailing currency attacks

do sunspots matter when agents are choquet expected utility maximizers we consider a two period complete market economy in which agents preferences are represented by a non additive expected utility if agents are optimistic i e if the measure according to which they compute their expected utility is subadditive sunspots matter at equilibrium if agents are pessimistic i e if their measure is convex and share the same beliefs sunspots do not matter at equilibrium and the normalized equilibrium price is indeterminate in this latter case one can even allow for different beliefs among agents and still have that sunspots do not matter the analysis is contrasted with the case of additive beliefs studied by cass and shell journal of political economy 91 1983 pp 193 227

has the cds market lowered the cost of corporate debt abstract many have claimed that credit default swaps cdss have lowered the cost of debt financing to firms by creating new hedging opportunities and information for investors this paper evaluates the impact that the onset of cds trading has on the spreads that underlying firms pay to raise funding in the corporate bond and syndicated loan markets employing a range of methodologies we fail to find evidence that the onset of cds trading lowers the cost of debt financing for the average borrower further we uncover economically significant adverse effects on risky and informationally opaque firms

characterizing optimism and pessimism directly through comonotonicity pessimism independence is introduced to characterize pessimistic risk attitudes for the nonlinear probability models of schmeidler quiggin and yaari directly in terms of comonotonicity rather than through additional conditions such as convexity of preferences pessimism independence requires the mixture of an arbitrary good and a fixed act to be preferred to the mixture of a comonotonic bad act and the fixed act thus more general than full force independence it does not exclude the additional pessimistic appreciation of the hedging involved in the mixture of a noncomonotonic bad and fixed act more restrictive than comonotonic independence it does exclude optimistic aversion of hedging

supply and demand functions for multiproduct u s cash grain farms biases caused by research and other policies this study presents new estimates of supply and demand elasticities for u s multiproduct cash grain farms and estimates of input and output bias effects caused by public and private crop research extension and farmers schooling the study also shows that the social rate of return to public crop research is large about 62 percent

modeling supply response in a multiproduct framework the paper models multiproduct supply response in agriculture and tests key assumptions traditionally maintained in supply response studies the technology is approximated by a restricted profit function the properties of the restricted profit function are imposed during estimation the hypothesis that maintains the existence of output price and quantity indexes that satisfy the adding up property is rejected the existence of individual production functions for each output is also rejected unless joint production is permitted the estimates of responsiveness of a particular commodity to changes in own price or prices of competing outputs are likely to be considerably understated

nonparametric estimates of the components of productivity and profitability change in u s agriculture recent theoretical advances in total factor productivity tfp measurement mean that tfp indexes can now be exhaustively decomposed into unambiguous measures of technical change and efficiency change to date all applications of this new methodology have involved decomposing indexes that have poor theoretical properties this article shows how the methodology can be used to decompose a new tfp index that satisfies all economically relevant axioms from index theory the application is to state level data from 1960 to 2004 in most states the main drivers of agricultural tfp change are found to have been technical change and scale and mix efficiency change

rational expectations and the aggregation of diverse information in laboratory security markets the idea that markets might aggregate and disseminate information and also resolve conflicts is central to the literature on decentralization hurwicz 1972 and rational expectations lucas 1972 we report on three series of experiments all of which were predicted to have performed identically by the theory of rational expectations in two of the three series one in which participants trade a complete set of arrow debreu securities and a second in which all participants have identical preferences double auction trading leads to efficient aggregation of diverse information and rational expectations equilibrium failure of the third series to exhibit such convergence demonstrates the importance of market institutions and trading instruments in achievement of equilibrium

multiple lenders and corporate distress evidence on debt restructuring multiple banking is a common characteristic of the corporate lending particularly of medium sized and large firms however if the firms are facing distress multiple lenders may have serious coordination problems as has been argued in the theoretical literature in this paper we analyse the problems of multiple banking in borrower distress empirically we rely on a unique panel data set that includes detailed credit file information on distressed lending relationships in germany in particular it includes information on bank pools a legal institution aimed at coordinating lender interests in distress we find that the existence of small pools increases the probability of workout success and that this effect reverses when pools become large we identify major determinants of pool formation in particular the number of banks the distribution of lending among banks and the severity of the distress copyright 2008 wiley blackwell

post war productivity patterns in u s agriculture influences of aggregation procedures in a state level analysis annual data for forty eight states are used to account for changes in the composition of input and output aggregates over space and time and thereby to obtain new evidence on changes in inputs outputs and productivity in u s agriculture the measures change significantly when we use state specific rather than national prices and when we allow for changes in the composition of the aggregates especially of labor and capital inputs we compare our estimates and those reported by ball et al american journal of agricultural economics 81 1999 164 79 the national estimates are similar but substantial differences are found in state level productivity growth

how reliable is duality theory in empirical work the neoclassical theory of production establishes a dual relationship between the profit value function of a competitive firm and its underlying production technology this relationship commonly referred to as duality theory has been widely used in empirical work to estimate production parameters such as elasticities and returns to scale we generate a pseudo dataset by monte carlo simulations which starting from known production parameters yield a dataset with the main characteristics of u s agriculture in terms of unobserved firm heterogeneity decisions under uncertainty unexpected production and price shocks endogenous prices output and input aggregation measurement error in variables and omitted variables production parameters are not precisely recovered when performing econometric estimation based on the duality approach and the elasticity estimates are inaccurate deviations of own and cross price elasticities from initial median values given our parameter calibration range between 6 and 690 with an average of 90 also own price elasticities are as imprecisely recovered as cross price elasticities sensitivity analysis shows that results still hold for different sources and levels of noise and sample size used in estimation

a new global database on agriculture investment and capital stock abstract this paper introduces a new analytical database on aggregate physical investment flows and capital stock in agriculture forestry and fishing for 189 countries and territories over the period 1995 2017 long time series of the agricultural investment to value added ratio are employed to obtain agricultural investment flows these latter are subsequently converted into capital stock series by applying a variant of the perpetual inventory method this article describes the database content and the data sources the methodology used to deal with missing data in the investment to value added ratio as well as several measurement issues underlying its development lastly it presents an overview of the main global and regional trends in agricultural gross fixed capital formation and capital stock drawing some implications and directions for future research

reflections on agricultural r d productivity and the data constraint unfinished business unsettled issues sixty years ago t w schultz introduced the idea of the productivity residual to agricultural economics 1956 schultz s main message was that growth in conventional inputs accounted for little of the observed growth in agricultural output and that there was work to be done by agricultural economists to understand and ultimately eliminate this unexplained residual called productivity thus was launched the economics of agricultural productivity as a sub field within agricultural economics along with the economics of agricultural r d and innovation and related government policy much progress has been made in the decades since still critical issues remain unresolved this matters because agricultural innovation and productivity matter and so do the related policies that rest to some extent on our established understanding of the economic relationships in this paper i review some unsettled issues related to economic models and measures applied to agricultural r d and productivity and some unfinished business in terms of economic and policy questions that are not yet well answered before doing that i present some evidence on agricultural productivity and why it matters next with a nod to factology i present available productivity measures from the u s department of agriculture usda and international science and technology practice and policy instepp center and compare them in the context of translog cost function models in subsequent sections i use these and other data to develop new evidence related to two contentious questions a do farmers benefit from public agricultural r d b has u s agricultural productivity growth slowed in recent decades the answers are revealed within

agricultural productivity revisited this paper describes production accounts for agriculture output is defined as gross production leaving the farm as opposed to real value added inputs are not limited to capital and labor but include intermediate inputs as well we derive index numbers of gross output capital labor and intermediate inputs these data are used to construct indexes of total factor productivity we then compare the contributions of input growth and productivity growth to economic growth the important role of productivity growth in agriculture becomes immediately apparent

parametric estimation of technical and allocative inefficiency with panel data the error components approach to estimating allocative inefficiency imposes restrictive assumptions on the distributions of the errors and functional form the parametric approach does not require special assumptions about the error distribution or technology but typically assumes technical efficiency or restrictive functional forms the parametric approach also allows for systematic firm responses to shadow prices the authors generalize the parametric approach to a panel data setting and show that input and firm specific allocative inefficiency as well as firm specific technical inefficiency can be identified and estimated using a flexible functional form this is demonstrated empirically with an application to u s airlines copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

coordination in the presence of asset markets markets aggregate widely dispersed information and direct resources to where they produce the greatest value friedrich a hayek 1945 adam smith 1776 these dual roles of informational and allocative efficiency help explain why asset markets are often used to guide economic activity such as production and investment many economic contexts involving production and investment are characterized by multiple equilibria john bryant 1983 jack hirshleifer 1983 russell w cooper 1999 colin camerer and marc knez 1997 jordi brandts and david j cooper 2006 when asset markets are linked to such contexts it is important to understand what role they play in aiding coordination and selecting equilibria if asset markets obtain both informational and allocative efficiency in a multiple equilibrium con text then they should coordinate the beliefs of economic agents and guide behavior to an efficient equilibrium indeed some evidence suggests that one sided auction markets may facilitate efficient coordination in an environment with multiple equi libria john b van huyck raymond c battalio and richard o beil 1993 vincent crawford and bruno broseta 1998 however the broader question of whether asset markets generally lead to efficient coordination in environments with multiple equi libria remains an open question in this paper we explore experimentally the influence of two sided futures asset markets on behavior and outcomes in an economic activity characterized by multi plicity of equilibria we use laboratory experiments where we can control impor tant features of both the market and the underlying activity and focus on situations where the outcome of the economic activity is sensitive to the behavior of small numbers of agents the economic activity in our setting consists of a coordination game with pareto ranked equilibria in which the payoff to each player is a function of her own choice or input and group output which is some order statistic such as the minimum of all players input choices see van huyck battalio and beil 1990 van huyck battalio and beil 1991 crawford 1995 players all do better if they coordinate on the highest output efficient equilibrium which is pareto optimal but they also prefer to select a lower input if they believe others will do so coordination games of this kind have been applied widely to model economic activity from the relationship between beliefs and output in macroeconomic models cooper 1999 to public good provision hirshleifer 1983 to firm production

effective costs and chemical use in united states agricultural production using the environment as a free input a cost function based production model is used to represent patterns of input use and output production in u s agriculture and the implied costs of induced reductions in risk from agricultural chemicals bad outputs we estimate and evaluate shadow values for these harmful outputs and the implied input and output specific substitution patterns with a focus on the impacts on pesticide demand and its quality and quantity components using state level data we find these measures to be statistically significant vary substantively by region and imply increased demand for effective pesticides associated with improvements in quality from embodied technology copyright 2002 oxford university press

payoff complementarities and financial fragility evidence from mutual fund outflows the paper provides empirical evidence that strategic complementarities among investors generate fragility in financial markets analyzing mutual fund data we find that consistent with a theoretical model funds with illiquid assets where complementarities are stronger exhibit stronger sensitivity of outflows to bad past performance than funds with liquid assets we also find that this pattern disappears in funds where the shareholder base is composed mostly of large investors we present further evidence that these results are not attributable to alternative explanations based on the informativeness of past performance or on clientele effects we analyze the implications for funds performance and policies

a theory of anticipated utility abstract a new theory of cardinal utility with an associated set of axioms is presented it is a generalization of the von neumann morgenstern expected utility theory which permits the analysis of phenomena associated with the distortion of subjective probability

information transparency and coordination failure theory and experiment we examine the effect of higher order beliefs on the ability of decentralized decision makers to coordinate and take advantage of improvements in information transparency that can increase welfare theories that address this question have not been empirically explored we study coordination in a laboratory experiment with privately informed decision makers economic outcomes in the setting depend both on agents rational beliefs regarding economic fundamentals and on their rational beliefs regarding the beliefs of other agents increasing information transparency mitigates uncertainty about economic fundamentals but may increase strategic uncertainty precipitating multiple equilibria and less efficient group outcomes we provide evidence that sometimes the equilibrium attained by creditors is inferior from a welfare perspective to other available equilibria risk dominance appears to determine equilibrium selection in our setting

multiple input multiple output production choices and technology in the u s wheat region duality theory motivates a translog expected profit function consistent with multiple products price uncertainty preseason climate constraints acreage control policies and possibly nonhomothetic technology although multiple outputs are allowed enterprise specific data is not necessary instead time series measures of output revenues and expected prices input expenses and prices and fixed input flows are employed appropriate measures of elasticities of choice returns to size and biases in technological change are derived results indicated decreasing returns to size rather limited though complementary responsiveness of choices to price changes and the nature of biases in technological changes

capital services in u s agriculture concepts comparisons and the treatment of interest rates this paper begins with a review of the methods and assumptions used to measure capital service flows two data series on capital inputs in u s agriculture are briefly described and compared we show that measures of capital services are sensitive to the treatment of interest rates notably the use of fixed versus variable market rates significantly affects measures of the quantity and productivity of agricultural capital in the united states we conclude that when calculating capital usage in u s agriculture the use of a fixed interest rate generates more plausible estimates than the use of an annual market rate

interim efficiency with meu preferences abstract recently kajii and ui 2009 17 proposed to characterize interim efficient allocations in an exchange economy under asymmetric information when uncertainty is represented by multiple posteriors when agents have bewley s incomplete preferences kajii and ui 2009 17 proposed a necessary and sufficient condition on the set of posteriors however when agents have gilboa schmeidler s maxmin expected utility preferences they only propose a sufficient condition the objective of this paper is to complete kajii and ui s work by proposing a necessary and sufficient condition for interim efficiency for various models of ambiguity aversion and in particular maxmin expected utility our proof is based on a direct application of some results proposed by rigotti shannon and stralecki 2008 24

efficiency of experimental security markets with insider information an application of rational expectations models the study reports on the ability of competing models of market information integration and dissemination to explain the behavior of simple laboratory markets for a one priced security returns to the security depended upon a randomly drawn state of nature some agents insiders whose identity was unknown to other agents knew the state before the markets opened with replication of market conditions the predictions of a fully revealing rational expectations model are relatively accurate prices adjusted immediately to near rational expectations prices profits of insiders were virtually indistinguishable from non insiders and efficiency levels converged to near 100 percent

multiproduct supply and input demand in u s agriculture two sets of u s agricultural output supply and input demand relationships including cross price effects are reported for five commodity groups and four variable input groups for the 1951 82 period they are obtained by direct econometric estimation on u s data and by geographic aggregation from published econometric estimates for each of ten regions comprising the contiguous forty eight states the supply and demand formulations are specified on the assumptions of competitive behavior and an underlying normalized quadratic profit function the effects of upward sloping input supply curves are examined at the national level

cost functions under production uncertainty we characterize the cost functions which would be consistent with expected utility maximization when production is uncertain it is not generally possible assuming risk aversion to use only expected output as the constraint in a cost minimization problem in some leading cases cost functions consistent with expected utility maximization are particularly useful because they are devoid of risk preferences

how the data we make can unmake us annals of factology scrutiny we give to propositions derived from theory claims of statistical significance of a regression result or a bald assertion consider why do people still ranch and why lately have more ranchers started to write poetry about their lives new york times july 5 1992 if you were to make such a poetical claim you could expect to be asked for supporting data but to take an example of the other kind after you quote world bank gdp tables to show real income growth in developing countries slowing up in the 1980s your assertion that real income growth slowed in the 1980s is likely to be unchallenged this is wrong for the supine acceptance of data can cause scientific mischief of the worst kind believing we know things that aren t so the purposes of this paper are to show how the data agricultural economists use can mislead and to discuss what might be done about it

coordination failures and the lender of last resort was bagehot right after all the classical doctrine of the lender of last resort lolr elaborated by bagehot 1873 asserts that the central bank should lend to illiquid but solvent banks under certain conditions several authors have argued that this view is now obsolete in modern interbank markets a solvent bank cannot be illiquid this paper provides a possible theoretical foundation for rescuing bagehot s view our theory does not rely on the multiplicity of equilibria that arises in classical models of bank runs we built a model of banks liquidity crises that possesses a unique bayesian equilibrium in this equilibrium there is a positive probability that a solvent bank cannot find liquidity assistance in the market we derive policy implications about banking regulation solvency and liquidity ratios and interventions of the lender of last resort furthermore we find that public bailout and private bail in involvement are complementary in implementing the incentive efficient solution and that bagehot s lender of last resort facility must work together with institutions providing prompt corrective action and orderly failure resolution finally we derive similar implications for an international lender of last resort ilolr jel g21 g28

input demands and inefficiency in u s agriculture markov chain monte carlo mcmc methods are used to estimate a seemingly unrelated regression sur system of input demand functions for u s agriculture our demand functions have flexible forms and allow for nonrandom technical inefficiency concavity constraints are imposed at individual data points and the distributions of measures of relative technical efficiency are constrained to the unit interval results are evaluated in terms of characteristics of the posterior distributions of parameters measures of relative technical efficiency and other nonlinear functions of the parameters

manipulation and the allocational role of prices it is commonly believed that prices in secondary financial markets play an important allocational role because they contain information that facilitates the efficient allocation of resources this paper identifies a limitation inherent in this role of prices it shows that the presence of a feedback effect from the financial market to the real value of a firm creates an incentive for an uninformed trader to sell the firm s stock when this happens the informativeness of the stock price decreases and the beneficial allocational role of the financial market weakens the trader profits from this trading strategy partly because his trading distorts the firm s investment we therefore refer to this strategy as manipulation we show that trading without information is profitable only with sell orders driving a wedge between the allocational implications of buyer and seller initiated speculation and providing justification for restrictions on short sales

duality the output effect and applied comparative statics except for kako agricultural production studies using cost functions have analyzed technology via allen elasticities technological change parameters and homotheticity tests kako used a transcendental logarithmic translog cost function to decompose empirically changes in derived factor demand into three separate components output level factor substitution effects and technical change kako s work allows further investigation of technical change on derived factor demands however kako s output effect is different from the traditional concept the production analog of the income effect in consumer theory this note outlines a theoretical and econometric approach for measuring the output effect the output effect is important because it presents a more complete picture of factor employment adjustments than do demand elasticities generated from cost functions elasticities generated from cost functions restrict the producer to a given level of output producers however may also adjust output as factor prices change the output effect captures this adjustment this paper demonstrates a method for deriving the output effect from the cost function first the general assumptions and the model are outlined then the cost function is related to the indirect production function and the output effect obtained results are presented for the special case of a homothetic production function the paper concludes with an empirical application to the u s meat products industry

convergence in u s productivity growth for agriculture implications of interstate research spillovers for funding agricultural research state crop livestock and aggregate agricultural total factor productivity tfp data 1950 82 are examined for evidence of convergence to a single tfp level convergence or to a steady state rate of growth or conditional convergence our empirical results do not support convergence but do support convergence the rate of convergence is variable and depends on research and development r d spillins from other states private r d and farmers schooling the finding of strong positive interstate spillover effects implies that independent state planning of agricultural research is inefficient and cooperation across states boundaries including establishment of new political jurisdictions for financing public agricultural research can enhance efficiency

induced innovation in u s agriculture time series direct econometric and nonparametric tests the hypothesis of induced innovation is tested for u s agriculture using a high quality state level panel data set and three disparate testing techniques time series direct econometric and nonparametric we find little support for the hypothesis that conclusion is robust across testing techniques however as with all empirical tests of this hypothesis conducted to date ours focus only on the demand side of the hypothesis the hypothesis could have been rejected simply because the marginal cost of developing and implementing input saving technologies for the relatively expensive inputs is greater than for the relatively cheap inputs copyright 2009 oxford university press

asset markets as an equilibrium selection mechanism coordination failure game form auctions and tacit communication abstract in this paper we explore the possibility that asset markets provide a means of tacit communication which may allow subjects to coordinate on the payoff dominant equilibrium in an underlying coordination game we find that the existence of a market price for the right to play does communicate information about the equilibrium selection problem specifically behavior never converged to the efficient outcome when subjects were endowed with the right to participate but always converged to the efficient outcome when subjects purchased the right to participate journal of economic literature classification numbers c720 g120

feedback effects and asset prices feedback effects from asset prices to firm cash flows have been empirically documented this finding raises a question for asset pricing how are asset prices determined if price affects fundamental value which in turn affects price in this environment by buying assets that others are buying investors ensure high future cash flows for the firm and subsequent high returns for themselves hence investors have an incentive to coordinate which may generate self fulfilling beliefs and multiple equilibria using insights from global games we pin down investors beliefs analyze equilibrium prices and show that strong feedback leads to higher excess volatility

bayesian efficiency analysis with a flexible form the aim cost function in this article we describe the use of gibbs sampling methods for drawing posterior inferences in a cost frontier model with an asymptotically ideal price aggregator nonconstant returns to scale and composed error an empirical example illustrates the sensitivity of efficiency measures to assumptions made about the functional form of the frontier we also examine the consequences of imposing regularity through parametric restrictions alone

estimation of australian wool and lamb production technologies under uncertainty an error components approach a model of producer behavior which explicitly accounts for both output price and production uncertainty is formulated and estimated if the production technology is multiplicatively separable in its deterministic and stochastic components then the expected utility maximization problem implies cost minimization for planned or expected output consequently our empirical model of three lamb and wool producing sectors in australia involves the estimation of a system of input cost share and cost equations whose disturbances have an error components structure the empirical results are evaluated in terms of input demand elasticities and estimates of the stochastic components of production are presented

primal versus dual methods for measuring the impact of ozone on cash grain farmers a comparison of primal and dual methods for measuring the impact of ozone on the profits and outputs of illinois cash grain farms uses the sample data in mjelde et al after adding an additional year of data and making refinements on the basis of the evidence presented it is not possible to say definitively whether the production or profit function specification is superior both models seem to fit the data well and give plausible results in terms of indicating if an effect is present while ozone has been shown to be deleterious to an individual farmer however this does not imply that reductions in ozone levels throughout the nation would lead to increased farmer profits it could lead to an increase in supply which would likely cause a decrease in price other factors highly correlated with ozone could also be responsible for the observed effect 7 references 1 table

coordination risk and the price of debt abstract creditors of a distressed borrower face a coordination problem even if the fundamentals are sound fear of premature foreclosure by others may lead to pre emptive action undermining the project recognition of this problem lies behind corporate bankruptcy provisions across the world and it has been identified as a culprit in international financial crises but has received scant attention from the literature on debt pricing without common knowledge of fundamentals the incidence of failure is uniquely determined provided that private information is precise enough this affords a way to price the coordination failure comparative statics on the unique equilibrium provides several insights on the role of information and the incidence of inefficient liquidation

crises and prices information aggregation multiplicity and volatility crises are volatile times when endogenous sources of information are closely monitored we study the role of information in crises by introducing a financial market in a coordination game with imperfect information the asset price aggregates dispersed private information acting as a public noisy signal in contrast to the case with exogenous information our main result is that uniqueness may not obtain as a perturbation from perfect information multiplicity is ensured with small noise in addition we show that a multiplicity may emerge in the financial price itself b less noise may contribute toward nonfundamental volatility even when the equilibrium is unique and c similar results obtain for a model where individuals observe one another s actions highlighting the importance of endogenous information more generally

patterns of state productivity growth in the u s farm sector linking state and aggregate models this article focuses on agricultural productivity growth at both sector and state levels it does so in a way that preserves the economic integrity of national and state production accounts a model accounting for interstate transactions in farm goods links sectorwide and state specific measures of total factor productivity growth an interesting conclusion is that the smooth persistently positive trend typically observed for farm sector productivity growth masks considerable variation across states and regions the results also indicate that farm sector productivity growth is wholly a function of productivity trends in the individual states interstate shifts in production activity and resource reallocations have had little impact