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Agriculture and the macroeconomy, with emphasis on developing countries

In: Handbook of Agricultural Economics

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  • Schiff, Maurice
  • Valdes, Alberto

Abstract

Based on an economy-wide perspective, this paper begins with a discussion of the bias against exports and agriculture that characterized the economic literature and the development strategies in many developing countries after World War II. This is followed by an analysis of how the macroeconomic environment affects agricultural price incentives. Specifically, the paper discusses how policies concerning industrial protection, exchange rates, and interest rates and other fiscal policies can strongly influence the economic incentives for agriculture compared with other sectors, identifying the most relevant literature and alternative approaches used on this issue. It then proceeds to examine how the real exchange rate can be affected by exogenous shocks, such as the foreign terms of trade, with emphases on the Dutch disease phenomenon and agriculture. The paper next examines the influence of interest rates on incentives in agriculture, arguing that, surprisingly, this has been a neglected area in the literature.The paper explores the effects on agriculture of structural adjustment programs implemented since the early 1980s in developing countries. The final section surveys the literature on agriculture and the macroeconomy in industrial countries, focusing on the impact of the exchange rate on export competitiveness in the United States, the cost of agricultural protection for the overall economy in Europe and Japan, and the increased importance of fluctuations in money markets for the farm sector and the additional instability they generate.

Suggested Citation

  • Schiff, Maurice & Valdes, Alberto, 2002. "Agriculture and the macroeconomy, with emphasis on developing countries," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 27, pages 1421-1454, Elsevier.
  • Handle: RePEc:eee:hagchp:3-27
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    Citations

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    Cited by:

    1. Bazyli Czyżewski & Andrzej Czyżewski & Łukasz Kryszak, 2019. "The Market Treadmill Against Sustainable Income of European Farmers: How the CAP Has Struggled with Cochrane’s Curse," Sustainability, MDPI, vol. 11(3), pages 1-16, February.
    2. Alexandre Gohin & GianCarlo Moschini, 2006. "Evaluating the Market and Welfare Impacts of Agricultural Policies in Developed Countries: Comparison of Partial and General Equilibrium Measures," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(2), pages 195-211.
    3. Abbott, Philip C., 2003. "Agricultural Trade Liberalization and Adjustment in Developing Countries," Policy Reform and Adjustment Workshop, October 23-25, 2003, Imperial College London, Wye Campus 15731, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    4. Bakari, Sayef, 2018. "The Impact Of Citrus Exports On Economic Growth: Empirical Analysis From Tunisia," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 6(1), January.
    5. B Kelsey Jack, "undated". "Market Inefficiencies and the Adoption of Agricultural Technologies in Developing Countries," CID Working Papers 50, Center for International Development at Harvard University.
    6. Tedesco, Ilaria & Pelloni, Alessandra & Trovato, Giovanni, 2015. "Oecd Agricultural Subsidies And Poverty Rates In Lower Income Countries," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(2), pages 1-19, April.
    7. Upali Wickramasinghe, 2016. "Fostering productivity in the rural and agricultural sector for inclusive growth and sustainable development in Asia and the Pacific Abstract:," MPDD Working Paper Series WP/16/07, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    8. Sayef Bakari & Mohamed Mabrouki, 2017. "The Effect Of Agricultural Exports On Economic Growth In South-Eastern Europe: An Empirical Investigation Using Panel Data," Journal of Smart Economic Growth, , vol. 2(4), pages 49-64, December.
    9. Sayef Bakari, 2017. "The Impact of Vegetables Exports on Economic Growth in Tunisia," Economic Research Guardian, Weissberg Publishing, vol. 7(2), pages 72-87, December.
    10. Benjamin N. Dennis & Talan B. Işcan, 2007. "Agricultural Distortions, Structural Change, and Economics Growth: A Cross-Country Analysis," Working Papers daleconwp2007-03, Dalhousie University, Department of Economics.
    11. Rocchi, Benedetto & Romano, Donato & Hamza, Raid, 2013. "Agriculture reform and food crisis in Syria: Impacts on poverty and inequality," Food Policy, Elsevier, vol. 43(C), pages 190-203.
    12. Shifa, Abdulaziz B., 2013. "The dual policy in the dual economy—The political economy of urban bias in dictatorial regimes," Journal of Development Economics, Elsevier, vol. 105(C), pages 77-85.

    More about this item

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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