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Agriculture and the macroeconomy

Author

Listed:
  • Schiff, Maurice
  • Valdes, Alberto
Abstract
Based on an economy-wide perspective, this paper begins with a discussion of the bias against exports and agriculture that characterized the economic literature and the development strategies in many developing countries after World War II. This is followed by an analysis of how the macroeconomic environment affects agricultural structural price incentives. Specifically, the paper discusses how early policies concerning industrial protection, exchange rates, and interest rates and other fiscal policies can strongly influence the economic incentives for agriculture compared with other sectors, identifying the most relevant literature and alternative approaches used on this issue. It then proceeds to examine how the real exchange rate can be affected by exogenous shocks, such as the foreign terms of trade, with emphases on the Dutch Disease phenomenon and agriculture. The paper next examines the influence of interest rates on incentives in agriculture, arguing that, surprisingly, this has been a neglected area in the literature. The paper explores the effects on agriculture of structural adjustment programs implemented since the early 1980s in developing countries. The final section surveys the literature on agriculture and the macro-economy in industrial countries, focusing on the impact of the exchange rate on export competitiveness in the United States, the cost of agricultural protection for the overall economy in Europe and Japan, and the increased importance of fluctuations in money markets for the farm sector and the additional instability they generate

Suggested Citation

  • Schiff, Maurice & Valdes, Alberto, 1998. "Agriculture and the macroeconomy," Policy Research Working Paper Series 1967, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1967
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    References listed on IDEAS

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    Cited by:

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    2. Aldona Mrówczyńska-Kamińska & Ewelina Szuba-Barańska & Walenty Poczta, 2021. "Wyniki produkcyjne oraz efektywność agrobiznesu w krajach Europy Środkowo-Wschodniej," Ekonomista, Polskie Towarzystwo Ekonomiczne, vol. 1, pages 87-117, January.
    3. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, July.
    4. World Bank, 2005. "Agriculture and Achieving the Millennium Development Goals," World Bank Publications - Reports 8455, The World Bank Group.
    5. Piotr Bórawski & Mariola Grzybowska-Brzezińska & James William Dunn, 2015. "The Evaluation of Efficiency of Polish Agriculture," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(1), pages 175-183.
    6. Gerpacio, Roberta V. & Pingali, Prabhu L., 2007. "Tropical and Subtropical Maize in Asia: Production Systems, Constraints, and Research Priorities," Maize Production Systems Papers 56107, CIMMYT: International Maize and Wheat Improvement Center.
    7. Oloukoï, Laurent & Amoussouga Gero, Fulbert & Acclassato, Dénis & Chabossou, F. Augustin, 2013. "Dynamique De La Competitivite Externe De L’Agriculture Au Benin : Analyse Par Une Approche Dynamique Synthetique," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161621, African Association of Agricultural Economists (AAAE).
    8. David, Cristina C., 1998. "Towards an Efficient Path to Food Security: The Philippine Case," Discussion Papers DP 1998-39, Philippine Institute for Development Studies.
    9. Hewitt, Joanna, 2008. "Impact evaluation of research by the International Food Policy Research Institute on agricultural trade liberalization, developing countries, and WTO's Doha negotiations:," Impact assessments 28, International Food Policy Research Institute (IFPRI).
    10. Aldona Mrówczyńska-Kamińska & Ewelina Szuba-Barańska & Walenty Poczta, 2021. "Wyniki produkcyjne oraz efektywność agrobiznesu w krajach Europy Środkowo-Wschodniej," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 1, pages 87-117.
    11. David, Cristina C., 1997. "Agricultural policy and the WTO Agreement: The Philippine Case," Discussion Papers DP 1997-13, Philippine Institute for Development Studies.
    12. Bathla, Seema, 2012. "Volatility in Agriculture Commodity Prices in India: Impact and Macroeconomic and Sector-Specific Policy Responses," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122543, European Association of Agricultural Economists.
    13. François Joseph Cabral, 2008. "Insécurité alimentaire en milieu urbain et rural au Sénégal : les mêmes causes créent-elles les mêmes effets ?," Cahiers de recherche 08-12, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    14. Fynn, John & Haggblade, Steven, 2006. "Potential Impact of the Kwacha Appreciation and Proposed Tax Provisions of the 2006 Budget Act on Zambian Agriculture," Food Security Collaborative Working Papers 54475, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    15. Aldona Mrówczyńska-Kamińska, 2013. "Znaczenie agrobiznesu w gospodarce narodowej w krajach Unii Europejskiej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 79-100.
    16. David, Cristina C., 1999. "Constraints to Food Security: The Philippine Case," Discussion Papers DP 1999-31, Philippine Institute for Development Studies.
    17. Shifa, Abdulaziz, 2011. "The Dual Policy in the Dual Economy - The Political Economy of Urban Bias in Dictatorial Regimes," Research Papers in Economics 2011:22, Stockholm University, Department of Economics.
    18. Bathla, Seema, 2011. "Resilience of Indian agriculture to external shocks: Analyzing through a structural econometric model," IAMO Forum 2011: Will the "BRICs Decade" Continue? – Prospects for Trade and Growth 14, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).

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