Publication Type

Journal Article

Version

submittedVersion

Publication Date

6-2006

Abstract

The purpose of this paper is to develop a simple model of an economy in which growth is driven by a combination of exogenous technical change in agriculture and a rising world demand for labor-intensive manufactured exports. We explore the relative roles of an exogenous agricultural productivity shock and rising export demand in a model with two traded industrial goods and a non-traded agricultural good, food. When the non-traded sector uses a specific factor, we show that technical change in agriculture may be the key to factor migration into industry, in particular driving intersectoral labor migration. A key assumption is a less than unitary price elasticity of demand for food. Our results could form a crucial link in capturing the story of labor-abundant economies which experienced structural transformation and growth through labor-intensive manufactured exports, without prior technology breakthroughs in industry. They contribute to explaining the massive growth in factor accumulation which shows up in some growth accounting studies: they may also imply that some of the contribution of 'technical progress' is mistakenly attributed solely to factor accumulation.

Keywords

Structural change, agricultural productivity, labor migration, terms of trade

Discipline

Agricultural and Resource Economics | International Economics

Research Areas

Applied Microeconomics

Publication

Journal of International Trade and Economic Development

Volume

15

Issue

2

First Page

209

Last Page

230

ISSN

0963-8199

Identifier

10.1080/09638190600690986

Publisher

Taylor and Francis

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1080/09638190600690986

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