The Missing Food Problem
Trevor Tombe ()
Working Papers from Wilfrid Laurier University, Department of Economics
Poor countries have low labour productivity in agriculture relative to other sectors, yet predominantly consume domestically produced food. The existing literature on cross-country agricultural and aggregate productivity differences abstracts from open economy considerations – leaving open the question of why poor countries import so little food. I propose an answer: high trade barriers and low relative input costs (wages) in developing-country agriculture. With a modified Eaton-Kortum trade model, I show these distortions reconcile the cross-country productivity data with observed trade flows. Through various counterfactual exercises, I find these distortions contribute to cross-country productivity differences and future work should ascertain their underlying causes.
Keywords: Food Problem; Dual Economy Models; Trade; Agriculture; Productivity (search for similar items in EconPapers)
JEL-codes: F1 F41 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-eff
Date: 2012, Revised 2012
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