A recent literature in development economics has focused renewed attention on land redistribution. Driven in part by political events in countries like Zimbabwe, the literature has sought to understand the economic implications of land reform. Much of this literature focuses on credit market imperfections and the role of land as collateral. Redistribution of land allows poor farmers to borrow, invest, and thus escape poverty. But in terms of aggregate production, redistributing land may have positive, negative, or neutral effects on output. This paper will use a calibrated, dynamic, span-of-control model to investigate the impact of redistributing land. It will compare such an agrarian reform program with an alternative policy in which income, rather than land, is redistributed to the poor.
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