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Agricultural productivity and trade: Argentina and the U.S.A

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Author Info

  • Chichilnisky, Graciela
  • McLeod, D.

Abstract

We study labor productivity in agriculture within a two-region, two factor and two commodity economy. Increases in productivity can lead to higher or to lower agricultural prices, depending on the internal structure of the economy. We give necessary and sufficient conditions for either outcome; these depend on technologies, factor endowments and export levels. In a developing economy, improvements in productivity generally lead to higher agricultural prices, i.e. to better terms of trade between agriculture and industry. In an industrial economy increasing productivity leads instead to lower agricultural prices. The sign of one expression determines the turning point between these two opposite price responses and allows us to explain the effects of trade and investment policies on domestic output and welfare. Simulations of the model are reported with data for Argentina and the U.S.A. circa 1970.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8081.

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Date of creation: 1984
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Handle: RePEc:pra:mprapa:8081

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Related research

Keywords: north-south model; north-south; labor productivity; export policies; asymmetric effects; agricultural productivity; agriculture pricing; trade; development; Argentina; United States; growth; expansion; domestic incomes; employment;

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References

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  1. Chichilnisky, Graciela, 1984. "North-South trade and exported-led policies," Journal of Development Economics, Elsevier, vol. 15(1-3), pages 131-160.
  2. Chichilnisky, Graciela, 1981. "Terms of trade and domestic distribution : Export-led growth with abundant labour," Journal of Development Economics, Elsevier, vol. 8(2), pages 163-192, April.
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Cited by:
  1. Chichilnisky, Graciela, 1990. "Global models and North-South relations," MPRA Paper 8126, University Library of Munich, Germany.
  2. Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.
  3. Chichilnisky, Graciela, 1990. "Large and small models: their suitability for North-South issues," MPRA Paper 8354, University Library of Munich, Germany.

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