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The Missing Food Problem

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  • Trevor Tombe

    ()
    (Wilfrid Laurier University)

Abstract

Poor countries have low labour productivity in agriculture relative to other sectors, yet predominantly consume domestically produced food. The existing literature on cross-country agricultural and aggregate productivity differences abstracts from open economy considerations – leaving open the question of why poor countries import so little food. I propose an answer: high trade barriers and low relative input costs (wages) in developing-country agriculture. With a modified Eaton-Kortum trade model, I show these distortions reconcile the cross-country productivity data with observed trade flows. Through various counterfactual exercises, I find these distortions contribute to cross-country productivity differences and future work should ascertain their underlying causes.

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Bibliographic Info

Paper provided by Wilfrid Laurier University, Department of Economics in its series Working Papers with number tt0060.

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Length: 37
Date of creation: 2012
Date of revision: 2012
Handle: RePEc:wlu:wpaper:tt0060

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Keywords: Food Problem; Dual Economy Models; Trade; Agriculture; Productivity;

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References

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Cited by:
  1. repec:fip:fedreq:y:2011:i:3q:p:329-357:n:vol.97no.3 is not listed on IDEAS
  2. Diego Restuccia & Richard Rogerson, 2012. "Misallocation and Productivity," Working Papers tecipa-468, University of Toronto, Department of Economics.
  3. Diego Restuccia, 2011. "Recent developments in economic growth," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 329-357.
  4. Jonathan Eaton & Samuel Kortum, 2012. "Putting Ricardo to Work," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 65-90, Spring.
  5. Trevor Tombe & Jennifer Winter, 2014. "What's Inside Counts: Migration, Taxes, and the Internal Gains from Trade," Working Papers 2013-28, Department of Economics, University of Calgary, revised 05 Feb 2014.

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