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Modeling growth options and structural change to reach middle income country status: The case of Ghana

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  • Breisinger, Clemens
  • Diao, Xinshen
  • Thurlow, James

Abstract

This paper develops a recursive dynamic computable general equilibrium (DCGE) model to evaluate sources of accelerated growth and structural transformation. It goes beyond stylized and aggregate general equilibrium models by examining country-specific growth options to reach middle income country (MIC) status. We first examine a set of countries that have successfully transformed their economies to inform model and scenario building. We then simulate potentials and trade-offs of selected sector- and factor-specific growth paths for Ghana. Results show that no individual sector's growth acceleration is sufficient for Ghana to reach MIC status by 2015. Manufacturing growth is constrained by its high dependency on agricultural inputs indicating the need for diversification. Services can support rather than drive economy-wide growth. Agriculture must remain the mainstay of economy-wide growth. While this will delay structural change in sectoral composition, it demonstrates that emphasizing agriculture is a viable option for some countries to reach MIC status.

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  • Breisinger, Clemens & Diao, Xinshen & Thurlow, James, 2009. "Modeling growth options and structural change to reach middle income country status: The case of Ghana," Economic Modelling, Elsevier, vol. 26(2), pages 514-525, March.
    • Handle: RePEc:eee:ecmode:v:26:y:2009:i:2:p:514-525
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    15. Devarajan, Shantayanan & Robinson, Sherman, 2013. "Contribution of Computable General Equilibrium Modeling to Policy Formulation in Developing Countries," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 277-301, Elsevier.
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    18. Diao, Xinshen, 2009. "Economywide impact of avian flu in Ghana: A dynamic CGE model analysis," IFPRI discussion papers 866, International Food Policy Research Institute (IFPRI).
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    21. Breisinger, Clemens & Ecker, Olivier & Al-Riffai, Perrihan & Robertson, Richard & Thiele, Rainer & Wiebelt, Manfred, 2011. "Climate change, agricultural production and food security: Evidence from Yemen," Kiel Working Papers 1747, Kiel Institute for the World Economy (IfW Kiel).
    22. Diao, Xinshen & Zhang, Yumei & Chen, Kevin Z., 2012. "The global recession and China's stimulus package: A general equilibrium assessment of country level impacts," China Economic Review, Elsevier, vol. 23(1), pages 1-17.
    23. Patrice Rélouendé Zidouemba & Françoise Gerard, 2018. "Does Agricultural Productivity Actually Matter for Food Security in a Landlocked Sub†Saharan African Country? The Case of Burkina Faso," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(1), pages 103-142, March.
    24. Diao, Xinshen & Zhang, Yumei & Chen, Kevin Z., 2010. "Country-level impact of global recession and China’s stimulus package," IFPRI discussion papers 979, International Food Policy Research Institute (IFPRI).

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