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The Missing Food Problem

Trevor Tombe ()

Working Papers from Wilfrid Laurier University, Department of Economics

Abstract: 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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