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Farm Work, Home Work, and International Productivity Differences

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Author Info
Douglas Gollin (Williams College)
Stephen L. Parente (University of Illinois, Urbana-Champaign)
Richard Rogerson (Arizona State University)

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Abstract

Agriculture's share of economic activity is known to vary inversely with a country'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 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. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2004.05.003
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Publisher Info
Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 7 (2004)
Issue (Month): 4 (October)
Pages: 827-850
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Handle: RePEc:red:issued:v:7:y:2004:i:4:p:827-850

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kiminori Matsuyama, 1990. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Discussion Papers 934, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  2. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Laitner, John, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Blackwell Publishing, vol. 67(3), pages 545-61, July.
  4. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April. [Downloadable!] (restricted)
  5. Jones, Charles I., 1994. "Economic growth and the relative price of capital," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 359-382, December. [Downloadable!] (restricted)
  6. Prescott, Edward C, 1998. "Needed: A Theory of Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-51, August.
    Other versions:
  7. Gerhard Glomm, 1992. "A Model of Growth and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 901-22, November. [Downloadable!] (restricted)
  8. William J. Collins & Jeffrey G. Williamson, 1999. "Capital Goods Prices, Global Capital Markets and Accumulation: 1870-1950," NBER Working Papers 7145, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1996. "The Poverty of Nations: A Quantitative Exploration," NBER Working Papers 5414, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Cristina Echevarria, 1995. "Agricultural Development vs. Industrialization: Effects of Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 631-47, August. [Downloadable!] (restricted)
  11. 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. [Downloadable!]
  12. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  13. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-33, March. [Downloadable!] (restricted)
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  14. Rupert, Peter & Rogerson, Richard & Wright, Randall, 1995. "Estimating Substitution Elasticities in Household Production Models," Economic Theory, Springer, vol. 6(1), pages 179-93, June.
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  15. Kongsamut, Piyabha & Rebelo, Sérgio & Xie, Danyang, 1997. "Beyond Balanced Growth," CEPR Discussion Papers 1693, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  16. 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. [Downloadable!] (restricted)
  17. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-52, May.
  18. Restuccia, Diego & Urrutia, Carlos, 2001. "Relative prices and investment rates," Journal of Monetary Economics, Elsevier, vol. 47(1), pages 93-121, February. [Downloadable!] (restricted)
  19. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, April.
  20. Caselli, Francesco & Coleman II, Wilbur John, 1999. "How Regions Converge," CEPR Discussion Papers 2191, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  21. McGrattan, Ellen R & Rogerson, Richard & Wright, Randall, 1997. "An Equilibrium Model of the Business Cycle with Household Production and Fiscal Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 267-90, May.
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  22. Francesco Caselli & Wilbur John Coleman II, 2001. "The U.S. Structural Transformation and Regional Convergence: A Reinterpretation," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 584-616, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Berthold Herrendorf & Akos Valentinyi, 2005. "Which Sectors Make the Poor Countries so Unproductive?," IEHAS Discussion Papers 0519, Institute of Economics, Hungarian Academy of Sciences. [Downloadable!]
  2. Diego Restuccia & Dennis Tao Yang & Xiaodong Zhu, 2003. "Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis," Working Papers diegor-03-01, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  3. Francesco Caselli, 2005. "Accounting for Cross-Country Income Differences," CEP Discussion Papers dp0667, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  4. Marla Ripoll & Juan Carlos Cordoba, 2006. "Agriculture and Aggregation," Working Papers 371, University of Pittsburgh, Department of Economics, revised Nov 2008. [Downloadable!]
  5. Dietz Vollrath, 2008. "The Dual Economy in Long-run Development," Working Papers 2008-03, Department of Economics, University of Houston. [Downloadable!]
    Other versions:
  6. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," Bristol Economics Discussion Papers 06/581, Department of Economics, University of Bristol, UK. [Downloadable!]
    Other versions:
  7. James Albrecht & Lucas Navarro & Susan Vroman, 2008. "The Effects of Labour Market Policies in an Economy with an Informal Sector," ILADES-Georgetown University Working Papers inv208, Ilades-Georgetown University, School of Economics and Bussines. [Downloadable!]
    Other versions:
  8. L. Rachel Ngai & Christopher A. Pissarides, 2008. "Trends in Hours and Economic Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 239-256, April. [Downloadable!] (restricted)
    Other versions:
  9. Areendam Chanda & Carl-Johan Dalgaard, . "Dual Economies and International Total Factor Productivity Differences," Departmental Working Papers 2005-11, Department of Economics, Louisiana State University. [Downloadable!]
    Other versions:
  10. Peter Rangazas, 2005. "Human Capital and Growth: An Alternative Accounting," Topics in Macroeconomics, Berkeley Electronic Press, vol. 5(1), pages 1307-1307. [Downloadable!] (restricted)
  11. Jonathan Temple & Ludger Woessmann, 2004. "Dualism and Cross-Country Growth Regressions," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  12. Christos Koulovatianos & Carsten Schröder & Ulrich Schmidt, 2006. "Non-Market Household Time and the cost of Children," Vienna Economics Papers 0606, University of Vienna, Department of Economics. [Downloadable!]
    Other versions:
  13. Herrendorf, Berthold & Valentinyi, Akos, 2005. "What Sectors Make the Poor Countries So Unproductive?," CEPR Discussion Papers 5399, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  14. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January. [Downloadable!] (restricted)
    Other versions:
  15. Stephen Parente, 2000. "EconomicDynamics Interviews Stephen Parente on the barriers to development," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 2(1), November. [Downloadable!]
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