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Agricultural productivity, comparative advantage and economic growth

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  • Agricultural productivity, comparative advantage and economic growth
  • Matsuyama, Kiminori
  • National Bureau of Economic Research


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Title Agricultural productivity, comparative advantage and economic growth
Similar Titles
Material Type Report
Author(English)

Matsuyama, Kiminori

Publisher

Cambridge : National Bureau of Economic Research

Date 1991-01
Series Title; No NBER Working Paper / 3606
Pages 27
Subject Country United Kingdom(Europe)
Language English
File Type Link
Subject Economy < Economic Conditions
Economy < Economic Administration
Industry and Technology < Agriculture
Holding National Bureau of Economic Research
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Abstract

The role of agricultural productivity in economic development is addressed in a two-sector model of endogenous growth in which a) preferences are non-homothetic and the income elasticity of demand for the agricultural good is less than unitary, and b) the engine of growth is learning-by-doing in the manufacturing sector. For the closed economy case, the model predicts a positive link between agricultural productivity and economic growth and thus provides a formalization of the conventional wisdom, which asserts that agricultural revolution is a precondition for industrial revolution. For the open economy case, however, the model predicts a negative link; that is, an economy with a relatively unproductive agricultural sector experiences faster and accelerating growth. The result suggests that the openness of an economy should be an important factor when planning development strategy and predicting growth performance.