Abstract:
This paper shows the role of the general dynamic model in empirical research of production
technology in agriculture. The model is a first order autoregressive multivariate
specification, first developed by Anderson and Blundell. This model is general enough to
nest several simpler dynamic as well as static models within it. Therefore, it provides a
framework for applying classical testing procedures and identifying the appropriate
specification in the empirical econometric model of production. The usefulness of the general
dynamic model is shown by estimating the production structure in the Iranian crop
sector. The results indicate that the Iranian crop production is best characterized by a
long-run static model derived from a non-homothetic translog specification which incorporates
non-neutral technological change and allows for structural change after the Islamic
Revolution of 1979.
