By Dr. Thorsten Wichmann (auth.)
A two-sector version of a constructing kingdom which include agriculture and is gifted. progress and structural swap are mentioned in variations with exogenous in addition to endogenous technical growth, algebraically and through numerical simulations. effects from considering peculiarities of foodstuff creation and intake are analyzed. those comprise expertise adoption in agriculture, Engel's legislations and a courting among the extent of nutrients and productivity.
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Extra info for Agricultural Technical Progress and the Development of a Dual Economy
14. Note that for (J = 1 this condition reduces to the simple requirement that the social discount rate must be larger than the growth rate of labor. This condition has already been pointed out by Coss (1965). Economically it simply means that the social planner values the utility of nearby generations more than that of future generations. Since percapita utility is weighted by the labor force in the integral, p must be greater).. to discount at all. 46 3. The Dual Economy Revisited development process, is characterized by n, the fraction of labor in agriculture.
It is therefore only logical that they focus on special characteristics of modern production inhibiting its adoption or on economic policies harming this sector. The NGT helps in identifying some of these characteristics, for example, increasing returns due to externalities, learning effects from the introduction of new techniques, or specific human capital requirements. The analysis in NGT fashion presented includes these special characteristics and shows that their inclusion can indeed lead to underdevelopment traps or multiple, high and low growth, equilibria.
Externalities are also emphasized by this literature. A further topic for discussion are poverty or subsistence constraints which are due to the fact that farmers in developing countries very often earn only their subsistence consumption. This implies that their ability to save or to sacrifice in any other way present consumption to obtain a higher consumption in the future is very limited. Within exogenous growth models this only influences capital accumulation. Farmers are carried out of this subsistence misery by exogenous techni- cal progress.
Agricultural Technical Progress and the Development of a Dual Economy by Dr. Thorsten Wichmann (auth.)