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The Missing Food Problem

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Abstract

Poor countries have low labour productivity in agriculture relative to other sectors, yet predominantly consume domestically produced food. The existing literature on cross-country agricultural and aggregate productivity differences abstracts from open economy considerations – leaving open the question of why poor countries import so little food. I propose an answer: high trade barriers and low relative input costs (wages) in developing-country agriculture. With a modified Eaton-Kortum trade model, I show these distortions reconcile the cross-country productivity data with observed trade flows. Through various counterfactual exercises, I find these distortions contribute to cross-country productivity differences and future work should ascertain their underlying causes.

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  • Trevor Tombe, 2012. "The Missing Food Problem," Working Papers tt0060, Wilfrid Laurier University, Department of Economics, revised 2012.
  • Handle: RePEc:wlu:wpaper:tt0060
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    Citations

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    Cited by:

    1. Jonathan Eaton & Samuel Kortum, 2012. "Putting Ricardo to Work," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 65-90, Spring.
    2. Chaoran Chen, 2017. "Untitled Land, Occupational Choice, and Agricultural Productivity," American Economic Journal: Macroeconomics, American Economic Association, pages 91-121.
    3. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, pages 3401-3438.
    4. Diego Restuccia & Richard Rogerson, 2013. "Misallocation and productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 1-10, January.
    5. Sebastian Sotelo, 2015. "Domestic Trade Frictions and Agriculture," Working Papers 641, Research Seminar in International Economics, University of Michigan.
    6. repec:fip:fedreq:y:2011:i:3q:p:329-357:n:vol.97no.3 is not listed on IDEAS
    7. Trevor Tombe & Jennifer Winter, "undated". "Fiscal Integration with Internal Trade: Quantifying the Effects of Equalizing Transfers," Working Papers 2013-28, Department of Economics, University of Calgary, revised 04 Feb 2017.
    8. Diego Restuccia, 2011. "Recent developments in economic growth," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 329-357.
    9. repec:nbr:nberch:13947 is not listed on IDEAS

    More about this item

    Keywords

    Food Problem; Dual Economy Models; Trade; Agriculture; Productivity;

    JEL classification:

    • F1 - International Economics - - Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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