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Green Revolutions and Miracle Economies : Agricultural Innovation, Trade and Growth

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  • Brishti Guha

    (SMU)

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    Abstract

    The purpose of this paper is to develop a simple model of an economy in which growth is driven by a combination of exogenous technical change in agriculture as well as by a rising world demand for labor-intensive manufactured exports. We explore the relative roles of agricultural innovation and rising export demand in a model with two traded industrial goods and a non-traded agricultural good, food. When the non-traded sector uses a specific factor, we show that technical change in agriculture may be the key to sustained factor accumulation in industry, in particular driving intersectoral labor migration. A key assumption is a less than unitary price elasticity of demand for food. Our results could form a crucial link in capturing the story of labor-abundant economies which experienced structural transformation and growth through labor-intensive manufactured exports, without prior technology breakthroughs in industry. They contribute to explaining the massive growth in factor accumulation which shows up in some growth accounting studies : they may also imply that some of the contribution of technical progress is mistakenly attributed solely to factor accumulation.

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    File URL: http://www.eaber.org/node/22424
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    Bibliographic Info

    Paper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 22424.

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    Date of creation: Jan 2005
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    Handle: RePEc:eab:develo:22424

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    Related research

    Keywords: Structural change; Agricultural productivity; labor migration; Terms of Trade;

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    1. Pasquale M. Sgro & Jean-Jacques Nowak & Mondher Sahli, 2004. "Tourism, Trade and Domestic Welfare," Working Papers 2004.24, Fondazione Eni Enrico Mattei.
    2. Matsuyama, K., 1992. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Working Papers e-92-3, Hoover Institution, Stanford University.
    3. Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August.
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