A dynamic model of the U.S. cotton market with rational expectations

dc.contributor.advisor William H. Meyers
dc.contributor.author Tsai, Grace
dc.contributor.department Economics
dc.date 2018-08-23T12:12:24.000
dc.date.accessioned 2020-06-30T07:10:44Z
dc.date.available 2020-06-30T07:10:44Z
dc.date.copyright Sun Jan 01 00:00:00 UTC 1989
dc.date.issued 1989
dc.description.abstract <p>This study presents a dynamic rational expectations model for the U.S. cotton market. The dynamic decision rules are derived from the cotton farmer and miller optimization problems; and the equilibrium movements of prices, production, land allocation, and mill consumption are solved analytically. The dynamic element in the cotton farmer and miller problems come from the cost functions. In the cotton cost function a sequential adjustment cost is used while a quadratic cost function is used in the cotton yarns cost function. These optimal decision rules are derived as functions of past values of these decision variables, expectations of future product prices, and other exogenous variables. Assuming rational expectations and knowing the orders of the Markov-processes for the relevant state variables and the disturbances, closed-form regression equations representing decision rules and stochastic processes are obtained. Then, the VAR approach and Granger-causality test are used to obtain information which help to forecast the relevant state variables at the first stage of estimation. With the specific assumption on the errors, a dynamic mill demand for cotton is estimated by using the method of nonlinear least squares and tested by using the likelihood ratio. The empirical results provide some support for the specific model. Furthermore, the empirical model provides a framework for policy evaluation.</p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/rtd/11169/
dc.identifier.articleid 12168
dc.identifier.contextkey 6444405
dc.identifier.doi https://doi.org/10.31274/rtd-180813-10263
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath rtd/11169
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/64396
dc.language.iso en
dc.source.bitstream archive/lib.dr.iastate.edu/rtd/11169/r_9014964.pdf|||Fri Jan 14 18:43:54 UTC 2022
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Agricultural Economics
dc.subject.disciplines Agriculture
dc.subject.keywords Agriculture--Economic aspects
dc.subject.keywords Economics
dc.title A dynamic model of the U.S. cotton market with rational expectations
dc.type article
dc.type.genre dissertation
dspace.entity.type Publication
relation.isOrgUnitOfPublication 4c5aa914-a84a-4951-ab5f-3f60f4b65b3d
thesis.degree.level dissertation
thesis.degree.name Doctor of Philosophy
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