Journal or Book Title
American Journal of Agricultural Economics
First Page or Article ID Number
A model of optimal dynamic agricultural supply is derived and fitted assuming farmers have two annual stochastic crop production activities, a joint limitation on production capacity, interdependencies between past acreage utilization and current productivity, and rational expectations. A five-equation specification is fitted to annual data, 1948–80. Estimated parameters are consistent with the theory, and the model simulates well. The long-run price elasticity of corn acreage is 0.2, which is similar to those obtained from ad hoc dynamic models, but our short-run elasticities are different.
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Tegene, Abebayehu; Huffman, Wallace E.; and Miranowski, John A., "Dynamic Corn Supply Functions: A Model with Explicit Optimization" (1988). Economics Publications. 364.