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Agricultural Productivity, Comparative Advantage, and Economic Growth

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  • Kiminori Matsuyama

Abstract

The role of agricultural productivity in economic development is addressed in a two-sector model of endogenous growth in which a) preferences are non-homothetic and income elasticity of demand for the agricultural good is less than unitary, and b) the engine of growth is learning-by-doing in the manufacturing sector. For the closed economy case, the model predicts a positive link between agricultural productivity and economic growth, while, for the small open economy case, it predicts a negative link. This suggests that the openness of an economy should be an important factor when planning development strategy and predicting growth performance.

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Bibliographic Info

Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 934.

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Date of creation: May 1990
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Handle: RePEc:nwu:cmsems:934

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Related research

Keywords: Agricultural Revolution; Dutch Disease; Endogenous Growth; Engel's Law; Industrail Revolution; Learning-by-doing; Regional Divergence.;

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References

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  1. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  2. Field, Alexander James, 1978. "Sectoral shift in antebellum Massachusetts: A reconsideration," Explorations in Economic History, Elsevier, vol. 15(2), pages 146-171, April.
  3. Michele Boldrin & Jose A. Scheinkman, 1988. "Learning-By-Doing, International Trade and Growth: A Note," UCLA Economics Working Papers 462, UCLA Department of Economics.
  4. Stokey, Nancy L, 1988. "Learning by Doing and the Introduction of New Goods," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 701-17, August.
  5. Grossman, Gene M & Helpman, Elhanan, 1991. "Quality Ladders in the Theory of Growth," Review of Economic Studies, Wiley Blackwell, vol. 58(1), pages 43-61, January.
  6. Wright, Gavin, 1979. "Cheap Labor and Southern Textiles before 1880," The Journal of Economic History, Cambridge University Press, vol. 39(03), pages 655-680, September.
  7. Kiminori Matsuyama, 1990. "Increasing Returns, Industrialization and Indeterminacy of Equilibrium," Discussion Papers 878, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
  9. Williamson, Jeffrey G., 1988. "Migration and urbanization," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 11, pages 425-465 Elsevier.
  10. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  11. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-80, November.
  12. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  13. van Wijnbergen, Sweder J G, 1984. "The 'Dutch Disease': A Disease after All?," Economic Journal, Royal Economic Society, vol. 94(373), pages 41-55, March.
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