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Modeling growth options and structural change to reach middle income country status: The case of Ghana

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  • Breisinger, Clemens
  • Diao, Xinshen
  • Thurlow, James

Abstract

This paper develops a recursive dynamic computable general equilibrium (DCGE) model to evaluate sources of accelerated growth and structural transformation. It goes beyond stylized and aggregate general equilibrium models by examining country-specific growth options to reach middle income country (MIC) status. We first examine a set of countries that have successfully transformed their economies to inform model and scenario building. We then simulate potentials and trade-offs of selected sector- and factor-specific growth paths for Ghana. Results show that no individual sector's growth acceleration is sufficient for Ghana to reach MIC status by 2015. Manufacturing growth is constrained by its high dependency on agricultural inputs indicating the need for diversification. Services can support rather than drive economy-wide growth. Agriculture must remain the mainstay of economy-wide growth. While this will delay structural change in sectoral composition, it demonstrates that emphasizing agriculture is a viable option for some countries to reach MIC status.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 26 (2009)
Issue (Month): 2 (March)
Pages: 514-525

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Handle: RePEc:eee:ecmode:v:26:y:2009:i:2:p:514-525

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Dynamic CGE model Economic transformation Growth strategy Middle-income developing countries Ghana;

References

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  8. Breisinger, Clemens & Diao, Xinshen & Thurlow, James & Al-Hassan, Ramatu M., 2008. "Agriculture for development in Ghana: New opportunities and challenges," IFPRI discussion papers 784, International Food Policy Research Institute (IFPRI).
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Citations

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Cited by:
  1. Hamade, Kanj & Malorgio, Giulio & Midmore, Peter, 2011. "Combining Quantitative And Qualitative Approaches To Rural Development Analysis: The Case Of Agricultural Intensification In Lebanon," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108960, Agricultural Economics Society.
  2. Breisinger, Clemens & Engelke, Wilfried & Ecker, Olivier, 2011. "Petroleum subsidies in Yemen: Leveraging reform for development," IFPRI discussion papers 1071, International Food Policy Research Institute (IFPRI).
  3. Diao, Xinshen & Zhang, Yumei & Chen, Kevin Z., 2010. "Country-level impact of global recession and China’s stimulus package," IFPRI discussion papers 979, International Food Policy Research Institute (IFPRI).
  4. Diao, Xinshen, 2009. "Economywide impact of avian flu in Ghana: A dynamic CGE model analysis," IFPRI discussion papers 866, International Food Policy Research Institute (IFPRI).
  5. Shiwei Xu & Yumei Zhang & Xinshen Diao & Kevin Z. Chen, 2011. "Impacts of agricultural public spending on Chinese food economy: A general equilibrium approach," China Agricultural Economic Review, Emerald Group Publishing, vol. 3(4), pages 518-534, November.
  6. Devarajan, Shantayanan & Robinson, Sherman, 2013. "Contribution of Computable General Equilibrium Modeling to Policy Formulation in Developing Countries," Handbook of Computable General Equilibrium Modeling, Elsevier.
  7. Debowicz, Dario & Segal, Paul, 2012. "Structural change in Argentina, 1935–60: The role of import substitution and factor endowments," IFPRI discussion papers 1212, International Food Policy Research Institute (IFPRI).
  8. Diao, Xinshen & Zhang, Yumei & Chen, Kevin Z., 2012. "The global recession and China's stimulus package: A general equilibrium assessment of country level impacts," China Economic Review, Elsevier, vol. 23(1), pages 1-17.
  9. Esso, Loesse Jacques, 2010. "Threshold cointegration and causality relationship between energy use and growth in seven African countries," Energy Economics, Elsevier, vol. 32(6), pages 1383-1391, November.
  10. Wiebelt, Manfred & Breisinger, Clemens & Ecker, Olivier & Al-Riffai, Perrihan & Robertson, Richard & Thiele, Rainer, 2013. "Compounding food and income insecurity in Yemen: Challenges from climate change," Food Policy, Elsevier, vol. 43(C), pages 77-89.

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