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Agricultural productivity, comparative advantage, and economic growth

  • Matsuyama, Kiminori

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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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 58 (1992)
Issue (Month): 2 (December)
Pages: 317-334

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Handle: RePEc:eee:jetheo:v:58:y:1992:i:2:p:317-334
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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  9. 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.
  10. 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.
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