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The Role of Agriculture in Development

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A longstanding question in economics is why some countries are so much richer than others. Today, for example, income per capita in the worldÂ’s richest countries is roughly thirty-five times greater than it is in the worldÂ’s poorest countries. Recent work (e.g., Robert E. Lucas 2001, and Rachel Ngai 1999) argues that the proximate cause of this disparity is that todayÂ’s poor countries began the process of industrialization much later and that this process is slow. In this paper we argue that a model of structural transformation provides a useful theory of both why industrialization occurs at different dates, and why it proceeds slowly. A key implication of this model is that growth in agricultural productivity is central to development, a message that also appears prominently in the traditional development literature. (See, e.g., Peter Timmer (1986)).

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Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2002-09.

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Length: 13 pages
Date of creation: Oct 2002
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Publication status: published in American Economic Review Papers and Proceedings 92(2) May 2002: 160-164.
Handle: RePEc:wil:wileco:2002-09

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  1. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1996. "The Poverty of Nations: A Quantitative Exploration," NBER Working Papers 5414, National Bureau of Economic Research, Inc.
  2. Kongsamut, Piyabha & Rebelo, Sergio & Xie, Danyang, 2001. "Beyond Balanced Growth," Review of Economic Studies, Wiley Blackwell, vol. 68(4), pages 869-82, October.
  3. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
  4. Kiminori Matsuyama, 1990. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Discussion Papers 934, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-52, May.
  6. Robert E. Lucas, 2000. "Some Macroeconomics for the 21st Century," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 159-168, Winter.
  7. Gary D. Hansen & Edward C. Prescott, 1999. "Malthus to Solow," Staff Report 257, Federal Reserve Bank of Minneapolis.
  8. L. Rachel Ngai, 2003. "Barriers and the Transition to Modern Growth," CEP Discussion Papers dp0561, Centre for Economic Performance, LSE.
  9. Laitner, John, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 545-61, July.
  10. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 680-687, August.
  11. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-33, March.
  12. Peter Timmer, C., 1988. "The agricultural transformation," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 8, pages 275-331 Elsevier.
  13. repec:fth:stanho:e-92-3 is not listed on IDEAS
  14. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  15. Oded Galor, 2006. "The Demographic Transition," Working Papers 2006-24, Brown University, Department of Economics.
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