Does Agricultural Productivity Growth Promote a Dynamic Comparative Advantage in the Manufacturing Sector?

Kamei, Keita (2013): Does Agricultural Productivity Growth Promote a Dynamic Comparative Advantage in the Manufacturing Sector?

Abstract

This paper develops a dynamic Ricardian trade model with a supply of productive infrastructure in the manufacturing sector. We discuss the onset of trade liberalization when the home country has a (dynamic) comparative advantage in the manufacturing sector. Moreover, we compare over time the total welfare that adds welfare during autarkic periods (pre-industrialization periods) to that during specializing in manufacturing sector periods (industrialization periods) with one that exclusively specializes in the agricultural sector. From this setting, the following results are obtained: (1) an increase in agricultural productivity may hasten the onset of liberalization, (2) an improvement in labor efficiency in the public sector necessarily hastens the onset of the trade liberalization; and (3) the total welfare that adds the welfare during autarkic periods to that during specializing in manufacturing sector periods may be higher than that of the economy that exclusively specializes in the agricultural sector.

• Item Type: MPRA Paper
• Language: English
• Keywords: Productive infrastructure, Industrialization, Timing of trade liberalization, Agricultural productivity
• Subjects: F - International Economics > F1 - Trade > F10 - General; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology

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