U.S. macroeconomic and tax policy: impacts on U.S. farm operations

Agricultural economists have generally concluded that macroeconomic and tax policy matters regarding the financial wellbeing of U.S. farm operations. Farm operations react more quickly and with greater response to both anticipated and unanticipated macroeconomic policy changes than do the commercial business operations, sometimes resulting in overshooting in the agricultural economy. In the early 1980s, the Federal Reserves disinflationary policy and large federal budget deficits had disproportionately large effects on real agricultural interest rates. This paper concludes with a presentation of numerous potential researchable issues regarding macroeconomic and tax policys impact on farm financial well-being.