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Agriculture and Economic Growth in a Market Economy: Analysis of the French Postwar Experience

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  • Irz, Xavier
  • Roe, Terry

Abstract

A general equilibrium model of structural change featuring three sectors (agriculture, manufacturing, services) and endogenous growth is presented to explain the evolution of agriculture in a growing market economy., Non-homothetic preferences, necessary to reproduce the Engel effect, as well as technological change occurring at different rates in the three sectors and originating in learning-by-doing constitute the main originalities of , the model. The analytical properties of the model are then shown to be consistent with one of the main regularities of the process of economic development: the continuous flow of labor out of agriculture and into the services sector. The model is then calibrated to France and the results of the simulations are compared to the pattern of structural transformations which has characterized the evolution of the French economy over the 1950-2000 period. The drastic reduction in agricultural workforce is reproduced as well as the phenomenon of de-industrialization (decrease in the relative importance of manufacturing ) after 1970. The model is then used to analyze the evolution of the domestic competitiveness of the agricultural sector over the period considered and the negative effect on the farm sector of deteriorating domestic terms of trade is highlighted.

Suggested Citation

  • Irz, Xavier & Roe, Terry, 1997. "Agriculture and Economic Growth in a Market Economy: Analysis of the French Postwar Experience," 1997 Conference, August 10-16, 1997, Sacramento, California 315467, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae97:315467
    DOI: 10.22004/ag.econ.315467
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    References listed on IDEAS

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