Mary A. Marchant

Monetary Impacts and Overshooting of Agricultural Prices in an Open Economy

This articles focus is on the time adjustment paths of the exchange rate and prices in response to unanticipated monetary shocks. First, we expand the theoretical specification of the overshooting hypothesis by generalizing Dornbuschs model to include a third sector (i.e., agricultural prices). Second, we employ Johansens cointegration test along with a vector error correction model to investigate whether agricultural prices overshoot in an open economy. The empirical results indicate that agricultural prices adjust faster than industrial prices to innovations in the money supply, affecting relative prices in the short run, but strict long-run money neutrality does not hold. Copyright 2002, Oxford University Press.

Economic Analysis of Cellulase Production Methods for Bio-Ethanol

The cost of cellulase enzymes has limited the feasibility of producing ethanol from fibrous biomass. Traditional submerged fermentation (SmF) was compared to an alternative method of producing cellulase, solid state cultivation (SSC). Results from an economic analysis indicated that the unit costs for cellulase enzyme production were

Weather Information and the Potential for Intertemporal Adverse Selection in Crop Insurance

15.67 (The prices are all 2004 prices in this article, except otherwise stated. We deflated newer prices to 2004 prices using a deflation factor 0.9 per year and inflated older prices to 2004 prices using an inflation factor 1.1.) per kilogram (

International Trade and Foreign Direct Investment: Substitutes or Complements?

/kg) and

Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market

40.36/kg, for the SSC and SmF methods, respectively, while the corresponding market price was over

Bigger, Smaller, Richer, Poorer: Trends in Agricultural Economics

90.00/kg. A sensitivity analysis conducted using Monte Carlo simulation also suggests that the unit cost of production using the SSC method is lower than the unit cost of production using SmF with a certainty of 99.6% (9,959 out of 10,000 cases). These results indicate that the SSC method may be a more economical method of cellulase production, thereby reducing bio-ethanol production costs. SSC may increase the potential that bio-ethanol will become a viable supplemental fuel source in light of current economic, political, and environmental issues.

The Canada U.S. free trade agreement: Competitive tradeoffs between foreign direct investment and trade

This study investigates the potential usefulness of early-season weather information in forecasting corn yields for the Midwest. To the extent that farmers are able to forecast yields prior to sales closing dates for crop insurance, farmers may use such information in deciding which years to purchase crop insurance and which years not to purchase insurance. Such intertemporal adverse selection would result in increased losses for the crop insurance program. Three yield forecasting models were developed using early-season weather information: (1) simple weather forecasts; (2) yield-weather regression models; and (3) yield-weather discriminant functions. This study presents procedures that would allow farmers to predict low corn yields before the purchasing deadline of corn insurance on 95 percent of planted acreage in the Midwest.

TRADE AND FOREIGN DIRECT INVESTMENT MANAGEMENT STRATEGIES FOR U.S. PROCESSED FOOD FIRMS IN CHINA

International agricultural trade has evolved over time. Processed foods and developing countries have become major growth markets for U.S. agricultural exports, and foreign direct investment (FDI) has become even more important than exports as a means of accessing foreign markets. The critical question is whether FDI is a substitute for or a complement of exports. This research builds upon an existing theoretical FDI model and contributes to the literature through the development of a simultaneous equation system for FDI and exports, which is estimated using two-stage least squares. Empirical analyses were used to examine the relationship between U.S. FDI and exports of processed foods into East Asian countries - China, Japan, Singapore, South Korea, and Taiwan - from 1989 to 1998. The results indicated that a complementary relationship between FDI and exports. Additionally, these results indicated that interest rates, exchange rates, gross domestic product (GDP), and compensation rates are important variables that influence U.S. FDI in East Asian countries, while GDP, exchange rates, and export prices are important export determinants.

THE TRADE AND ENVIRONMENTAL DEBATE: RELEVANT FOR SOUTHERN AGRICULTURE?

This research estimates price and expenditure elasticities of U.S. red wine imports from five countries--Italy, France, Spain, Australia, and Chile--which are compared to elasticities of domestically produced red wine using the first-difference version of the almost ideal demand system (AIDS). Expenditure elasticity results indicate that if U.S. total expenditures on red wine increase, domestic producers would gain most. Empirical results for conditional own-price elasticities of demand indicate that U.S. and Chilean red wines are elastic while U.S. demand for red wines from other countries are highly inelastic. Due to the magnitude of consumption of U.S. domestic red wines relative to imports, an increase in the price of U.S. wine results in a decline in quantity demanded that is six times larger than that for French and Italian red wines and over 20 times larger than that of other import countries. Results suggest that U.S. red-wine producers could increase their total revenue by decreasing prices, while Italian and French producers can increase total revenues by increasing prices.

Key Issues and Challenges for the 1999 World Trade Organization Agriculture Round

The 1996 American Agricultural Economics Association (AAEA) Employment Services Committee (ESC) survey results reveal that although enrollments are declining in both undergraduate and graduate programs, faculty numbers are increasing. These trends belie the fact that the increase in faculty has come among nontenure track faculty and that the number of tenure track assistant professors has declined markedly because of fewer hires, promotions, and attrition. One result is an aging tenure track faculty. Salaries among all faculty have been increasing at over 2% per year; however, a greater proportion of faculty is in the nontenure track at lower salaries. Key strategies to reverse declining enrollments are for departments to improve diversity, to gather information on placement of students at all levels, and especially to learn more about private-industry placements at the undergraduate and masters levels and about foreign employment at the graduate level.