The Overshooting Hypothesis of Agricultural Prices: The Role of Asset Substitutability

Ching-chong Lai, Shih Wen Hu and Chih-Ping Fan

Journal of Agricultural and Resource Economics, 2005, vol. 30, issue 01, 23

Abstract: By allowing for various degrees of asset substitutability between bonds and agricultural products, this paper reexamines the robustness of the overshooting hypothesis of agricultural product prices. It is found, in both a closed economy and an open economy, that the crucial factor determining whether agricultural prices overshoot or undershoot their long-run response following an expansion in the money stock depends upon the extent of asset substitutability between bonds and agricultural goods.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:30784

DOI: 10.22004/ag.econ.30784

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