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INVESTMENT, CREDIT CONSTRAINTS AND PUBLIC POLICY IN A NEOCLASSICAL ADJUSTMENT COST FRAMEWORK AgEcon
Cechura, Lukas.
This paper deals with the analysis of the impact of credit rationing on the farmer’s economic equilibrium and the analysis of different policy scenarios in a derived neoclassical adjustment cost framework. The theoretical model is an optimal dynamic investment model, in which the upper bound on investment is introduced. The limit of the investment enables to analyse the consequence of the occurrence of credit rationing on farmer’s capital accumulation, investment and supply. The method of optimal control is used to solve the optimization problem. The results show that the occurrence of credit rationing may significantly determine a farmer’s economic equilibrium. Then the analysis of defined policy scenarios suggests that a loan guarantee efficiently solves...
Tipo: Working or Discussion Paper Palavras-chave: Credit constraint; Investment; Capital; SGAFF (Supporting and Guarantee Agricultural and Forestry Fund); Adjustment cost and farmer’s economic equilibrium; Kreditrationierung; Investitionen; Kapital; EAGFL (Europäische Ausrichtungsund Garantiefond für die Landwirtschaft); Dynamische Anpassungskosten und langfristiges Gleichgewicht.; Agribusiness; Agricultural Finance; Financial Economics; Institutional and Behavioral Economics; Political Economy; C61; Q12; Q14; Q18.
Ano: 2008 URL: http://purl.umn.edu/91954
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The Institutional Support of Agricultural Loans and its Role in Czech Agriculture AgEcon
Cechura, Lukas.
The paper deals with the analysis of the institutional support of agricultural loans and its role in Czech agriculture based on the dynamic optimal model. The dynamic optimization problem is solved by the Lagrange method. The application of the theoretical model shows that the lower is the interest rate paid by the farmer the lower is the optimal consumption and consequently the farmer is willing to employ higher part of the capital in the production. Thus, the initial capital is more effectively employed. The time series analysis shows that the SGAFF’s activities significantly support the farmer’s investments. In spite of the problems in the setting of the SGAFF’s policy, the role of the SGAFF in financing of agricultural activities can be regarded to be...
Tipo: Conference Paper or Presentation Palavras-chave: SGAFF (Supporting and Guarantee Agricultural and Forestry Fund); Dynamic optimization; Agricultural output; Investments.; Agricultural Finance.
Ano: 2007 URL: http://purl.umn.edu/7815
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