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Agricultural productivity and trade: Argentina and the U.S.A

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  • Chichilnisky, Graciela
  • McLeod, D.

Abstract

We study labor productivity in agriculture within a two-region, two factor and two commodity economy. Increases in productivity can lead to higher or to lower agricultural prices, depending on the internal structure of the economy. We give necessary and sufficient conditions for either outcome; these depend on technologies, factor endowments and export levels. In a developing economy, improvements in productivity generally lead to higher agricultural prices, i.e. to better terms of trade between agriculture and industry. In an industrial economy increasing productivity leads instead to lower agricultural prices. The sign of one expression determines the turning point between these two opposite price responses and allows us to explain the effects of trade and investment policies on domestic output and welfare. Simulations of the model are reported with data for Argentina and the U.S.A. circa 1970.

Suggested Citation

  • Chichilnisky, Graciela & McLeod, D., 1984. "Agricultural productivity and trade: Argentina and the U.S.A," MPRA Paper 8081, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8081
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    References listed on IDEAS

    as
    1. Chichilnisky, Graciela, 1984. "North-South trade and exported-led policies," Journal of Development Economics, Elsevier, vol. 15(1-3), pages 131-160.
    2. Chichilnisky, Graciela, 1981. "Terms of trade and domestic distribution : Export-led growth with abundant labour," Journal of Development Economics, Elsevier, vol. 8(2), pages 163-192, April.
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    Cited by:

    1. Chichilnisky, Graciela, 1990. "Large and small models: their suitability for North-South issues," MPRA Paper 8354, University Library of Munich, Germany.
    2. Chichilnisky, Graciela, 1990. "Global models and North-South relations," MPRA Paper 8126, University Library of Munich, Germany.
    3. Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.

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    More about this item

    Keywords

    north-south model; north-south; labor productivity; export policies; asymmetric effects; agricultural productivity; agriculture pricing; trade; development; Argentina; United States; growth; expansion; domestic incomes; employment;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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