Global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture

Open access
Date
2018-03Type
- Journal Article
ETH Bibliography
yes
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Abstract
We study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level. We use a two-sector Schumpeterian model of growth, in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population. Agriculture demands land as an input, itself treated as a scarce form of capital. In our model both population and sectoral technological progress are endogenously determined, and key technological parameters of the model are structurally estimated using 1960-2010 data on world GDP, population, cropland and technological progress. Introducing random shocks to the evolution of total factor productivity in agriculture, we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages, and that it significantly affects both optimal consumption and population trajectories. Show more
Permanent link
https://doi.org/10.3929/ethz-b-000308754Publication status
publishedExternal links
Journal / series
American Journal of Agricultural EconomicsVolume
Pages / Article No.
Publisher
Oxford University PressSubject
agricultural productivity; economic growth; endogenous innovations; environmental constraints; food security; global population; land conversion; stochastic controlOrganisational unit
03877 - Bommier, Antoine / Bommier, Antoine
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Notes
It was possible to publish this article open access thanks to a Swiss National Licence with the publisher.More
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ETH Bibliography
yes
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