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Farm Work, Home Work and International Productivity Differences

AgricultureÂ’s share of economic activity is known to vary inversely with a countryÂ’s level of development. This paper examines whether extensions of the neoclassical growth model can account for some important sectoral patterns observed in a current cross-section of countries and in the time series data for currently rich countries. We find that a straightforward agricultural extension of the neoclassical growth model restricted to match U.S. observations fails to account for important aspects of the cross-country data. We then introduce a version of the growth model with home production, and we show that this model performs much better.

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File URL: http://web.williams.edu/Economics/wp/Gollin_Farm_Work_Home_Work_and_International_Productivity_Differences.pdf
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Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2002-08.

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Length: 40 pages
Date of creation: Mar 2001
Date of revision:
Publication status: published in Review of Economic Dynamics, 2004, vol. 7, issue 4, pages 827-850
Handle: RePEc:wil:wileco:2002-08
Contact details of provider: Postal: Williamstown, MA 01267
Phone: 413 597 2476
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Web page: http://econ.williams.edu
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  18. Peter Timmer, C., 1988. "The agricultural transformation," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 8, pages 275-331 Elsevier.
  19. Restuccia, Diego & Urrutia, Carlos, 2001. "Relative prices and investment rates," Journal of Monetary Economics, Elsevier, vol. 47(1), pages 93-121, February.
  20. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc.
  21. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  22. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 680-687, August.
  23. Alston, Lee J. & Hatton, T. J., 1991. "The Earnings Gap Between Agricultural and Manufacturing Laborers, 1925–1941," The Journal of Economic History, Cambridge University Press, vol. 51(01), pages 83-99, March.
  24. Gerhard Glomm, 1992. "A Model of Growth and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 901-22, November.
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