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Does Agricultural Productivity Growth Promote a Dynamic Comparative Advantage in the Manufacturing Sector?

  • Kamei, Keita
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    This paper develops a dynamic Ricardian trade model with a supply of productive infrastructure in the manufacturing sector. We discuss the onset of trade liberalization when the home country has a (dynamic) comparative advantage in the manufacturing sector. Moreover, we compare over time the total welfare that adds welfare during autarkic periods (pre-industrialization periods) to that during specializing in manufacturing sector periods (industrialization periods) with one that exclusively specializes in the agricultural sector. From this setting, the following results are obtained: (1) an increase in agricultural productivity may hasten the onset of liberalization, (2) an improvement in labor efficiency in the public sector necessarily hastens the onset of the trade liberalization; and (3) the total welfare that adds the welfare during autarkic periods to that during specializing in manufacturing sector periods may be higher than that of the economy that exclusively specializes in the agricultural sector.

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    File URL: http://mpra.ub.uni-muenchen.de/48603/1/MPRA_paper_48603.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 48603.

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    Date of creation: 2013
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    Handle: RePEc:pra:mprapa:48603
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    1. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
    2. Jing Jun Chang & Been-Lon Chen & Mei Hsu, 2006. "Agricultural Productivity and Economic Growth: Role of Tax Revenues and Infrastructures," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 891–914, April.
    3. Tarlok Singh, 2010. "Does International Trade Cause Economic Growth? A Survey," The World Economy, Wiley Blackwell, vol. 33(11), pages 1517-1564, November.
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