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Credit Constraints, Farm Characteristics, and the Farm Economy: Differential Impacts on Feeder Cattle and Beef Cow Inventories
Author(s) -
Bierlen Ralph,
Dixon Bruce L.,
Ahrendsen Bruce L.,
Barry Peter J.
Publication year - 1998
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1244058
Subject(s) - cash flow , investment (military) , economics , monetary economics , financial market , variable (mathematics) , financial accelerator , cash , differential (mechanical device) , business , finance , monetary policy , mathematical analysis , mathematics , engineering , dynamic stochastic general equilibrium , politics , political science , law , aerospace engineering
A recurrent topic in the macroeconomic literature is the financial accelerator—the notion that informational asymmetries introduce inefficiencies to financial markets which amplify and propagate the effects of real or monetary shocks. With the purpose of finding empirical evidence that is consistent with a financial accelerator operating in the cattle sector, inventory investment models are estimated with an appended cash flow variable. The inclusion of cash flow is motivated by the notion that investment by credit‐constrained farms should be sensitive to movements in internal funds. Results are consistent with the financial accelerator operating in the feeder cattle but not in the cow‐calf sector.