Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model
Significant differences exist in the rates of capital adjustment in the four major sectors of the U.S. economy: agriculture, food, manufacturing, and services. A multioutput adjustment cost model is specified to compute the rates of capital adjustment. This specification allows us to derive dynamic...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Western Agricultural Economics Association
1998-07-01
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| Series: | Journal of Agricultural and Resource Economics |
| Subjects: | |
| Online Access: | https://ageconsearch.umn.edu/record/31167 |
| _version_ | 1819083363192930304 |
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| author | Carlos Anthony Arnade Munisamy Gopinath |
| author_facet | Carlos Anthony Arnade Munisamy Gopinath |
| author_sort | Carlos Anthony Arnade |
| collection | DOAJ |
| description | Significant differences exist in the rates of capital adjustment in the four major sectors of the U.S. economy: agriculture, food, manufacturing, and services. A multioutput adjustment cost model is specified to compute the rates of capital adjustment. This specification allows us to derive dynamic output supply and investment demand functions for the four sectors, which are then fitted to time-series data. Our estimates show that capital in agriculture and manufacturing is almost fixed and adjusts toward respective long-run equilibrium at a rate of about 2% per year. The food processing and services sectors are more flexible in that their capital stocks fully adjust in less than five years. Thus, the rate of adjustment of agricultural capital is lower than that of other sectors in the U.S. economy. |
| first_indexed | 2024-12-21T20:31:22Z |
| format | Article |
| id | doaj.art-499c9c85da884797be6f5350d0d37aae |
| institution | Directory Open Access Journal |
| issn | 1068-5502 2327-8285 |
| language | English |
| last_indexed | 2024-12-21T20:31:22Z |
| publishDate | 1998-07-01 |
| publisher | Western Agricultural Economics Association |
| record_format | Article |
| series | Journal of Agricultural and Resource Economics |
| spelling | doaj.art-499c9c85da884797be6f5350d0d37aae2022-12-21T18:51:13ZengWestern Agricultural Economics AssociationJournal of Agricultural and Resource Economics1068-55022327-82851998-07-01231859810.22004/ag.econ.3116731167Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral ModelCarlos Anthony ArnadeMunisamy GopinathSignificant differences exist in the rates of capital adjustment in the four major sectors of the U.S. economy: agriculture, food, manufacturing, and services. A multioutput adjustment cost model is specified to compute the rates of capital adjustment. This specification allows us to derive dynamic output supply and investment demand functions for the four sectors, which are then fitted to time-series data. Our estimates show that capital in agriculture and manufacturing is almost fixed and adjusts toward respective long-run equilibrium at a rate of about 2% per year. The food processing and services sectors are more flexible in that their capital stocks fully adjust in less than five years. Thus, the rate of adjustment of agricultural capital is lower than that of other sectors in the U.S. economy.https://ageconsearch.umn.edu/record/31167adjustment costscapital adjustmentdynamic duality |
| spellingShingle | Carlos Anthony Arnade Munisamy Gopinath Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model Journal of Agricultural and Resource Economics adjustment costs capital adjustment dynamic duality |
| title | Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model |
| title_full | Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model |
| title_fullStr | Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model |
| title_full_unstemmed | Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model |
| title_short | Capital Adjustment in U.S. Agriculture and Food Processing: A Cross-Sectoral Model |
| title_sort | capital adjustment in u s agriculture and food processing a cross sectoral model |
| topic | adjustment costs capital adjustment dynamic duality |
| url | https://ageconsearch.umn.edu/record/31167 |
| work_keys_str_mv | AT carlosanthonyarnade capitaladjustmentinusagricultureandfoodprocessingacrosssectoralmodel AT munisamygopinath capitaladjustmentinusagricultureandfoodprocessingacrosssectoralmodel |