scholarly journals Corrigendum to: The Equilibrium Impact of Agricultural Risk on Intermediate Inputs and Aggregate Productivity

2021 ◽  
Keyword(s):  
Aggregate Productivity ◽  
Agricultural Risk ◽  
Intermediate Inputs

The Equilibrium Impact of Agricultural Risk on Intermediate Inputs and Aggregate Productivity

2020 ◽  
Author(s):  
Kevin Donovan
Keyword(s):  
Developing Countries ◽  
Incomplete Markets ◽  
Agricultural Sector ◽  
Aggregate Productivity ◽  
Agricultural Labor ◽  
Agricultural Risk ◽  
Intermediate Inputs ◽  
Idiosyncratic Shocks ◽  
Agricultural Labor Productivity ◽  
Cross Country

Abstract I consider the aggregate impact of low intermediate input intensity in the agricultural sector of developing countries. In a dynamic general equilibrium model with idiosyncratic shocks, incomplete markets, and subsistence requirements, farmers in developing countries use fewer intermediate inputs because it limits their exposure to uninsurable shocks. The calibrated model implies that Indian agricultural productivity would increase by 16 percent if markets were complete, driven by quantitatively important increases in both the average real intermediate share and measured TFP through lower misallocation. I then extend the results to consider the importance of risk in other contexts. First, the introduction of insurance decreases cross-country differences in agricultural labor productivity by 14 percent. Second, scaling the introduction of improved seeds to decrease downside risk reduces inequality by reallocating resources from rich to poor farmers via equilibrium effects. This reallocation substantially increases aggregate productivity relative to what would be expected from extrapolating the partial equilibrium impact.

scholarly journals Productivity growth and sectoral interactions under Domar aggregation: a study for the Brazilian economy from 2000 to 2014

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Theo Santini ◽  
Ricardo Azevedo Araujo
Keyword(s):  
Productivity Growth ◽  
Manufacturing Sector ◽  
Poor Performance ◽  
High Density ◽  
Aggregate Productivity ◽  
Intermediate Inputs ◽  
The Poor ◽  
Negative Role ◽  
Overall Performance ◽  
Productivity Gains

AbstractIn this paper, we use the Domar aggregation approach to study the evolution of Brazil’s productivity growth from 2000 to 2014, thus allowing us a disaggregated assessment of the issue. We found that the Brazilian economy’s overall performance is the outcome of a decrease in the economy’s density, as defined by the existing backward and forward connections amongst industries in intermediate inputs chains. It also can be explained by the poor performance of its sectors. Despite the relatively high density of the manufacturing sector, it performed a negative role concerning aggregate productivity growth both directly and indirectly. Directly insofar as that sector had negatives productivity growths during the period under consideration, and indirectly due to its high interconnection, which spread negative rather than positive productivity gains across the economy. Therefore, to improve the Brazilian economy’s poor performance, it is mandatory to restore the manufacturing sector’s capability to yield and spread productivity gains.

scholarly journals Misallocation in the Market for Inputs: Enforcement and the Organization of Production*

2020 ◽  
Vol 135 (4) ◽  
pp. 2007-2058 ◽  
Author(s):  
Johannes Boehm ◽  
Ezra Oberfield
Keyword(s):  
Cost Minimization ◽  
Structural Parameters ◽  
Aggregate Productivity ◽  
Input Output ◽  
Intermediate Inputs ◽  
Manufacturing Plants ◽  
Input Use ◽  
Macro Scale ◽  
State Variation ◽  
Organization Of Production

Abstract The strength of contract enforcement determines how firms source inputs and organize production. Using microdata on Indian manufacturing plants, we show that production and sourcing decisions appear systematically distorted in states with weaker enforcement. Specifically, we document that in industries that tend to rely more heavily on relationship-specific intermediate inputs, plants in states with more-congested courts shift their expenditures away from intermediate inputs and have a greater vertical span of production. To quantify the effect of these distortions on aggregate productivity, we construct a model in which plants have several ways of producing, each with different bundles of inputs. Weak enforcement exacerbates a holdup problem that arises when using inputs that require customization, distorting both the intensive and extensive margins of input use. The equilibrium organization of production and the network structure of input-output linkages arise endogenously from the producers’ simultaneous cost-minimization decisions. We identify the structural parameters that govern enforcement frictions from cross-state variation in the first moments of producers’ cost shares. A set of counterfactuals show that enforcement frictions lower aggregate productivity to an extent that is relevant on the macro scale.

scholarly journals Productivity Growth and Sectoral Interactions under Domar Aggregation: A Study for the Brazilian Economy from 2000 to 2014

2020 ◽  
Author(s):  
Theo Santini ◽  
Ricardo Araujo
Keyword(s):  
Productivity Growth ◽  
Manufacturing Sector ◽  
Poor Performance ◽  
High Density ◽  
Aggregate Productivity ◽  
Intermediate Inputs ◽  
The Poor ◽  
Negative Role ◽  
Overall Performance ◽  
Productivity Gains

Abstract In this paper, we use the Domar aggregation approach to study the evolution of productivity growth in Brazil from 2000 to 2014, thus allowing us a disaggregated assessment of the issue. We found that the overall performance of the Brazilian economy can be explained not only by the poor performance of its sectors but also in terms of diminishing industrial density, with fewer backward and forward connections amongst industries in terms of chains of intermediate inputs. Besides, despite the relatively high density of the manufacturing sector, it performed a negative role concerning aggregate productivity growth both directly and indirectly. Directly insofar as that sector had negatives productivity growths during the period under consideration, and indirectly due to its high interconnection, which spread negative rather than positive productivity gains across the economy. Therefore, to improve the poor performance of the Brazilian economy, it is mandatory to restore the capability of the manufacturing sector of yielding and spreading productivity gains.

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