For years economists have ignored the diversity in agriculture and its potential to increase long run growth rates by enhancing a country's knowledge base. Non-traditional agriculture requires significant investments in the infrastructure and knowledge; and therefore, has the potential to increase long run growth rates. Policy makers in developing countries have tended to enact macroeconomic policies designed to enhance the manufacturing sector at the expense of the agricultural sector. A theoretical model is developed to explain the dynamics between two non-traditional export sectors and the long run economic growth of the country. The model illustrates that growth in highly perishable agricultural exports, not domestic production of manufactured goods, can potentially lead to higher long run growth rates. The model is applied to the fruit and flower industries in Colombia to bring forth an example with real world relevance. 相似文献
The present paper examines the directional causality between export diversification and real exchange rate in the middle-income countries of Asia and Latin America over the period from 1995 to 2013. Additionally, we investigate asymmetries in the causality issue by examining the direction across trading partners.
Our empirical results show that there is a two-way causality between the two variables when we look at the sample as a whole. A causal link running from the real exchange rate to export diversification is consistent with the standard literature but it is not systematic at all. The reverse causation is very appealing and challenges the standard argument on exchange rate determination. When the causality issue is investigated by treating export markets differently, our findings at the aggregate level are confirmed in exports destined for the advanced countries. The analysis for ‘South-South’ trade only shows a unidirectional link from the real exchange rate to changes in export diversification. The same tests performed at the individual countries level reveal a heterogeneous causality across trading partners. 相似文献