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The productivity of the agricultural sector and its effects on economic growth: a CGE analysis

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  • Botero García, Jesús Alonso
  • Hurtado, Alvaro
  • Montañez Herrera, Diego Fernando

Abstract

Productivity is the essence of medium- and long-term economic growth in any economy; in this sense, we quantify the effects on economic activity in Colombia of productivity growth in the agricultural sector under a computable general equilibrium framework capable of incorporating determinants of its sources of growth of a more "endogenous" nature. The above, within an economy with heterogeneous firms and imperfect competition under the Melitz model, has 12 branches, 17 products, 16 trading partners, skilled and unskilled labor (informal or not), a fiscal framework with exogenous government and 20 types of households (half urban and half rural) that allows for distributional analysis. This analytical and quantitative tool is very useful for economic policy makers in that it allows them to contemplate a fairly complete picture of the Colombian economy in computational terms and to evaluate the different scenarios of the effects of the design and implementation of economic policies aimed at achieving productivity growth in the agricultural sector and its impact on the path of output over the next decade. Additionally, it is one of the first steps in the integration of computable general equilibrium models with modern techniques such as those in the field of artificial intelligence, which allows for quantitative and analytical improvements in macroeconomic policy decision making, so necessary in times of crisis.

Suggested Citation

  • Botero García, Jesús Alonso & Hurtado, Alvaro & Montañez Herrera, Diego Fernando, 2021. "The productivity of the agricultural sector and its effects on economic growth: a CGE analysis," Conference papers 333318, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugtwp:333318
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    Productivity Analysis;

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