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Project Description

Summary:  View help for Summary Agriculture in poor countries has low productivity, high employment, and negligible trade flows relative to other sectors. These facts motivate a multisector, open-economy view of international productivity differences. With a quantitative multicountry model featuring nonhomothetic preferences, multiple interrelated sectors, distorted labor markets, and costly trade, I find: trade amplifies the negative effect of labor market distortions; trade costs—large for poor countries, especially in agriculture—significantly contribute to international productivity differences; and explicitly modeling agriculture reveals additional channels through which poor countries may gain from trade. (JEL F41, J24, J43, O13, O19, Q11, Q17)

Scope of Project

JEL Classification:  View help for JEL Classification
      F41 Open Economy Macroeconomics
      J24 Human Capital; Skills; Occupational Choice; Labor Productivity
      J43 Agricultural Labor Markets
      O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
      O19 International Linkages to Development; Role of International Organizations
      Q11 Agriculture: Aggregate Supply and Demand Analysis; Prices
      Q17 Agriculture in International Trade


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