The Diminishing Influences of Agricultural Output Changes on General Price Changes in China
It has been argued that the influences of agriculture on the macro economy will be weakening along with economic development. We in this paper assess the impact of agricultural output changes on the general price level over time with China as an example. Our results suggest that China witnessed a declining influence of agricultural output changes on general price changes. The contribution of given agricultural output change on the general price change in 2005 was merely less than 60% of that in 1987, which in turn implies that macro policies targeting to curb general inflation via boosting agricultural output will be less effective as those of twenty years ago. We generate these results with the general equilibrium model calibrated to aggregated China¡¯s input-output tables of 1987, 1997, and 2005.
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- Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
- Ardeni, Pier Giorgio & Freebairn, John, 2002. "The macroeconomics of agriculture," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 28, pages 1455-1485 Elsevier.
- Xian Xin & Xiuqing Wang, 2007. "Was China¡¯s Inflation in 2004 Led by An Agricultural Price Rise?," Working Papers 0702, China Agricultural University, College of Economics and Management.
- Xiwen Chen, 2009. "Review of China's agricultural and rural development: policy changes and current issues," China Agricultural Economic Review, Emerald Group Publishing, vol. 1(2), pages 121-135, May.
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