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July/August 1991, 
Vol. 73, No. 4
Posted 1991-07-01

Monetary Policy and the Farm/Nonfarm Price Ratio: A Comparison of Effects in Alternative Models

by Michael T. Belongia

Michael T. Belongia reviews several models that have been used to link monetary policy to the relative price of farm products. The author then attempts to synthesize the conflicting empirical evidence that has been brought to bear on each. By using consistent measures of prices and monetary actions and estimating each model over the same time period, he finds that monetary actions have weak and short-lived effects on the farm /nonfarm product price ratio.