TESTING SHORT-RUN FACTOR DEMAND MODELS IN CANADIAN AND UNITED-STATES AGRICULTURE

Equilibrium factor demand models are being replaced by a variety of short-run and dynamic models in empirical production research. In this paper, we provide evidence on the usefulness of short-run production models in aggregate Canadian and American agriculture from 1961-82. We offer an alternative data-based dynamic model which encompasses the short-run model. This permits us to test for the short-run models and for two simpler dynamics models. Our results for both countries reject both the short-run models and the simpler dynamic models in favour of our most general dynamic model. -Authors