Estimating the Structure of Agricultural Investment: A Stochastic- Coefficients Approach

Abstract

Two approaches, a flexibie-accelerator model and a stochastic-coefficients alternative, are used to estimate the structure of aggregate agricultural investment. Structural estimates of the adjustment rates for each model differ. The stochastic-coefficients model, however, performs better in out-of-sample forecasting.

KEY WORDS:

• Flexible accelerator
• Adjustment coefficient