Inflationary Expectations and the Value of U.S. Farm Real Estate: Some Consistent Estimates

Will Martin and Earl Heady

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: In a number of recent papers, Martin Feldstein has hypothesized that expected inflation may increase the real value of assets such as farm real estate. In this paper, simple models of the value of U.S. farm real estate were developed to test this hypothesis. Both adaptive expectations and "rational" interest rate-based expectations of future inflation were considered. Adaptive expectations measures for expected inflation generally suggested a negative impact of inflation on real estate value. The interest rate-based expectation measures had a positive coefficient in all cases but only in one case out of six was this coefficient significant.

Date: 1982-02
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Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:82-wp1

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