Recent literature suggests that the value of land may increase faster
than the value of depreciable assets when inflation increases. Here, w
e affirm that result for the specific conditions facing agriculture-wh
ere the supply of agricultural land is nearly perfectly inelastic and
the supply of depreciable inputs is nearly perfectly elastic. The resu
lt is confirmed using three different data sets. The result implies th
at factor intensity of land relative to depreciable assets may change
over time in response to changes in inflation, even in the absence of
biased technical change.