Why Don't Developing Countries Import More Food?
Most developing countries are far less productive in agriculture than in the non-agriculture sector compared to the rest of the world. Standard Ricardian trade theory predicts that developing countries should be large importers of food and should have few workers in agriculture. The data is in stark contrast to this prediction. In this paper, we explore deviations from from standard trade theory --- with economic and empirical content --- to quantitatively explain this apparent deviation from comparative advantage. In particular, we focus on the role of internal trade costs and curvature in the production possibility frontier, both of which increase the incentives for workers in developing countries to produce their own food.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
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- Diego Restuccia & Dennis Tao Yang & Xiaodong Zhu, 2003.
"Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis,"
diegor-03-01, University of Toronto, Department of Economics.
- Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
- Diego Restuccia & Dennis Tao Yang & Xiaodong Zhu, 2007. "Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis," Working Papers e07-3, Virginia Polytechnic Institute and State University, Department of Economics.
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