Resource adjustments, dynamic price responses, and research impacts in US agriculture, 1950-1982

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1991
Authors
Warjiyo, Perry
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Wallace E. Huffman
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Abstract

A multioutput model is developed within the dynamic duality of the adjustment cost theory to analyze resource adjustments, dynamic price responses, and research impacts in U.S. agriculture during the post-war period. The model is rich enough to incorporate both the slow adjustment nature of some farm resources and the role of public and private research in U.S. agriculture. The resource adjustments are investigated for automobiles/trucks, tractors, equipment, service structure, land, and labor. Using state-level data from 1950-1982, the results show that these inputs are best characterized as quasi-fixed inputs. The dynamic price responses and research impacts are analyzed for capital, land, labor, intermediate inputs, crop output, and livestock product. Price and research elasticities are classified into short-run or long-run and direct or indirect. The indirect effects are due to the slow adjustments of capital, land, and labor. The long-run elasticities measure the ultimate impacts of price and research changes when the adjustments of these quasi-fixed inputs have been completed. Differential effects of the existing and new technology from agricultural research are also analyzed. The robustness of the results to the specifications about price expectations and error autocorrelations is investigated.

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Tue Jan 01 00:00:00 UTC 1991