CEES Working Paper Series


#9803      A Nonlinear Model of Information and Coordination in Hog Production: Testing the Coasian-Fowlerian Dynamic Hypotheses

Matthias Ruth
Center for Energy and Environmental Studies
and the Department of Geography
Boston University


L. Martin Cloutier
Agricultural Education and Consulting
Savoy, IL
lmc@centrec.com
Philip Garcia
Department of Agricultural and Consumer Economics
University of Illinois at Urbana-Champaign
p-garcia@uiuc.edu


Abstract

The objective of this paper is to report on the development of a new nonlinear and dynamic synthesis simulation model capable of reproducing Coase and Fowler's structural findings of the 1935-1940 paper series about the pig-cycle. The 'explanation' expounded by Coase and Fowler follows a well-integrated economic logic and an exemplary focus on economic structure that provides economic insight to foster our understanding commodity cycles. The mode was built using structural descriptions of the industry, technical parameters, assumptions and data available in the original paper series. The simulations results replicated all the findings under the alternative hypotheses ('static price expectations' and time-based price expectations) derived from Coase and Fowler's findings. Implications for information and coordination are discussed.

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