MONETARY SHOCKS AND RELATIVE FARM PRICES - A REEXAMINATION

The effect of monetary policy on the farm sector remains controversial . Studies of the effects of monetary disturbances on relative farm pri ces report conflicting results: some find that positive monetary shock s increase relative farm prices in the short run, and others detect no such effect. We offer a resolution of these conflicting findings by r eestimating existing models on a common data set. When sample periods corresponding to the original studies are used, the conflicting result s are confirmed. In contrast, when samples are updated through 1993, a ll models supply the same result: monetary shocks do not affect relati ve farm prices.