A microcomputer-based econometric model, AGGIES (AGricultural Globally Integrated Econometric System)/COTTON, is developed for the cotton industry. It is a structural model integrated with a farm program simulator, depicting in considerable detail the decision, processes of production, consumption, inventory holding,international trade, price determination, and government policy. The model emphasizes simulation capabilities of the 1985 farm program and its interactions with the international market forces. This is a mixed frequency model of monthly and annual data with linkage mechanisms in analyzing the effects of dynamic market expectations.

The model is currently run on IBM-PC, utilizing Advanced Retrieval Econometric Modeling System (AREMOS) software for database management, model estimation, forecast solution, and impact simulation. It is a 47-equation model including annual block of acreage, yield, and production for four major U.S. regions and Texas; and monthly equations of cotton ginning and mill consumption, export sales and market share, inventory stock, and domestic and international prices. The policy simulator has a comprehensive set of program parameters in determination of cash receipts, net loan receipts, deficiency and loan deficiency payments, diversion and disaster payments, producers' costs and returns, and government program outlays.