IDEAS home Printed from
   My bibliography  Save this article

Industry-Agriculture Interlinkage, Agricultural Trade Liberalization and Supply Constraints: A Post WTO Perspective


  • Ranjanendra Narayan Nag

    (St. Xavier’s College, 30 Park Street, Kolkata-700016, India)

  • Partha Pratim Ghosh

    (St. Xavier’s College, 30 Park Street, Kolkata-700016, India)


The objective of the paper is to examine macroeconomic developments of a labor surplus economy in terms of a dual economy framework. We attempt to build up a two-sector dependent economy model, which is open to trade-flows. We focus on specific forms of openness that a labor surplus economy is subject to, particularly in the transition period. The industrial sector is a non-traded sector, which uses an imported intermediate input. The import bill is financed by agricultural export in presence of binding foreign exchange constraint. The paper highlights the role of the foreign exchange contribution of the agricultural sector in the determination of industrial output and employment. The different comparative static exercises attempted in this paper clearly demonstrate that the results of the conventional closed economy models of a labor surplus economy can be seriously altered in an open economy setting, which accommodates multiple supply constraints, namely wage-goods constraint and foreign exchange constraint. The paper provides a critique of conventional demand management and expenditure switching policies and it also offers justification for agricultural trade liberalization. The results obtained in this paper can provide important insights into the nature of industry agriculture interlinkage in an open economy set up, particularly in the post WTO framework.

Suggested Citation

  • Ranjanendra Narayan Nag & Partha Pratim Ghosh, 2003. "Industry-Agriculture Interlinkage, Agricultural Trade Liberalization and Supply Constraints: A Post WTO Perspective," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 38(2), pages 235-251, July.
  • Handle: RePEc:dse:indecr:v:38:y:2003:i:2:p:235-251

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Dual Economy; Trade Liberalization; Multiple Supply Constraints.;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dse:indecr:v:38:y:2003:i:2:p:235-251. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pami Dua). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.