Capturing the Linkages Between Agriculture and the Domestic Economy

There are signs of an increasing recognition among agricultural economists that agriculture is a fully integrated partner in the na-tion's economy and should be treated as such when modeling aggre-gate outcomes in this sector. While early attempts to model out-comes in agriculture ignored many of the major linkages between this sector and the general economy, a move has been underway for several years now to explicitly account for many of these linkages in one fashion or another. These efforts generally can be differentiated by their recognition of the transmission mechanisms through which events outside the sector affect agriculture and by the timing of agriculture's effects on the rest of the domestic economy. My assignment today is to discuss the interface between agricul-ture and the domestic economy and the importance of endogenizing these linkages when modeling events in agriculture. More specifi-cally, I shall (1) briefly review the major interdependencies betwee