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Agricultural Development vs. Industrialization: Effects of Trade

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  • Cristina Echevarria

Abstract

The question addressed in this paper is how trade affects the composition of the national product, thus having an effect on the overall growth rate of the economy. The paper uses a dynamic general equilibrium model with three different consumption goods: agriculture, manufactures, and services (nontradable). The main finding is that if the country produces only primaries and services, the effects of trade on growth are mixed. Trade helps growth at low levels of income but at higher levels trade slows the country's growth. If the country produces manufactures and services, the effect of trade on growth is not substantial.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 28 (1995)
Issue (Month): 3 (August)
Pages: 631-47

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Handle: RePEc:cje:issued:v:28:y:1995:i:3:p:631-47

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Cited by:
  1. Douglas Gollin & Stephen L. Parente & Richard Rogerson, 2004. "The Food Problem and the Evolution of International Income Levels," Working Papers 899, Economic Growth Center, Yale University.
  2. Jing Zhang & Kei-Mu Yi, 2009. "Structural Change in an Open Economy," 2009 Meeting Papers 804, Society for Economic Dynamics.
  3. Richard Rogerson, 2001. "Farm Work, Home Work and International Productivity Differences," Center for Development Economics 170, Department of Economics, Williams College.
  4. Stijepic, Denis & Wagner, Helmut, 2008. "Impacts of Intermediate Trade on Structural Change," MPRA Paper 40841, University Library of Munich, Germany, revised 23 Aug 2012.
  5. Pina, Gilson M. G., 2013. "Mudança estrutural e a relação entre os setores em Cabo Verde
    [Structural change and the sectoral linkage in Cape Verde]
    ," MPRA Paper 46015, University Library of Munich, Germany.
  6. E. Cristina Echevarria, 2008. "International trade and the sectoral composition of production," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 192-206, January.

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