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Total Response Measures in Systems of Nonlinear Equations: An Application to a Model of the U.S. Dairy Sector
Author(s) -
Halt Matthew T.,
Aradhyula Satheesh V.
Publication year - 1995
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/j.1744-7976.1995.tb00124.x
Subject(s) - nonlinear system , flexibility (engineering) , elasticity (physics) , nonlinear elasticity , mathematics , linear model , econometrics , economics , mathematical optimization , statistics , physics , thermodynamics , quantum mechanics
This paper develops total elasticity and flexibility results for general nonlinear, dynamic systems of equations. Unlike procedures for obtaining total response measures in linear systems, analytical procedures are difficult to obtain for nonlinear models; comparable results, however, may be obtained by using numerical simulations. The potential for obtaining total elasticity measures in nonlinear dynamic models is illustrated with an annual model of the U.S. dairy sector. Results show substantial evidence of asymmetric price and quantity adjustments, as well as limit cycles. Such complexities could not be uncovered by using linear models or a partial‐equilibrium framework.