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Economywide Implications of Agricultural Liberalization in the United States

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  • Kilkenny, Maureen
  • Robinson, Sherman

Abstract

Agriculture is a relatively small part of the U.S. economy, but public expenditures supporting agriculture are large in both relative and absolute terms. Given this combination, changes in agricultural policies may have significant economywide effects. These effects will depend on the degree of factor mobility, the disposition of the saved farm program expenditures, and the nature of existing sector-specific distortions. We use a 10- sector computable general equilibrium model to analyze unilateral and multilateral agricultural liberalization under various assumptions about factor mobility and macroeconomic closure. We find that assumptions at the microeconomic level about land and labor mobility (but not necessarily capital mobility) are critical in determining economywide gains from liberalization. At the macroeconomic level, the important assumption in determining the magnitude of the gains is whether or not the saved program expenditures are used to reduce the Government deficit.
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Suggested Citation

  • Kilkenny, Maureen & Robinson, Sherman, 1990. "Economywide Implications of Agricultural Liberalization in the United States," CUDARE Working Papers 198562, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:198562
    DOI: 10.22004/ag.econ.198562
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    1. Roningen, Vernon O. & Dixit, Praveen M., 1989. "Economic Implications Of Agricultural Policy Reforms In Industrial Market Economies," Staff Reports 278843, United States Department of Agriculture, Economic Research Service.
    2. Robinson, Sherman & Kilkenny, Maureen & Hanson, Kenneth, 1990. "The USDA/ERS Computable General Equilibrium (CGE) Model of the United States," Staff Reports 278341, United States Department of Agriculture, Economic Research Service.
    3. Seitzinger, Ann Hillberg & Paarlberg, Philip L., 1989. "The Export Enhancement Program: How Has It Affected Wheat Exports," Agricultural Information Bulletins 309513, United States Department of Agriculture, Economic Research Service.
    4. Haley, Stephen L. & Krissoff, Barry, 1988. "The Value Of The Dollar And Competitiveness Of U.S. Wheat Exports: Further Evidence," Staff Reports 278031, United States Department of Agriculture, Economic Research Service.
    5. Kilkenny, Maureen, 1988. "Modelling the Removal of Production Incentive Distortions in the US Agricultural Sector," 1988 Conference, August 24-31, 1988, Buenos Aires, Argentina 183151, International Association of Agricultural Economists.
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    Cited by:

    1. Hanson, Kenneth & Robinson, Sherman & Tokarick, Stephen, 1990. "U.S. Adjustment in the 1990's: A CGE Analysis of Alternative Trade Strategies," Staff Reports 278325, United States Department of Agriculture, Economic Research Service.
    2. Kai Ding & Filippo Rebessi, 2020. "Optimal Agricultural Policy: Small Gains?," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1907-1928, October.
    3. Hahn, William F. & Crawford, Terry L. & Bailey, Linda & Shagam, Shayle, 1990. "The World Beef Market--Government Intervention and Multilateral Policy Reform," Staff Reports 278343, United States Department of Agriculture, Economic Research Service.
    4. Robinson, Sherman & Kilkenny, Maureen & Hanson, Kenneth, 1990. "The USDA/ERS Computable General Equilibrium (CGE) Model of the United States," Staff Reports 278341, United States Department of Agriculture, Economic Research Service.
    5. Kilkenny, Maureen, 1991. "The "30-30-30 Proposal": CGE Simulation of Unilateral Compliance by the USA to Partial Trade Liberalization," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271354, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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