Abstract: This paper examines the effects of international trade in agricultural goods on structural transformation and economic growth. To do the analysis, I introduce international trade into a neoclassical growth model with two sectors, agriculture and non agriculture. A key feature of the model is the low-income elasticity of the agricultural good. Consequently, in the closed economy model, as countries get richer labor moves out of agriculture and into the other sector. International trade can accelerate this transition for countries with low agricu...
(read more)
Topics: 
International trade
International economics