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Question: Modernization of Agriculture and Long-Term Growth

Answer:
ABSTRACT

This paper develops a two-sector model that illuminates the role played by agricultural
modernization in the transition from stagnation to growth. When agriculture relies on
traditional technology, industrial development reduces the relative price of industrial products,
but has a limited effect on per capita income because most labor has to remain in farming.
Growth is not sustainable until this relative price drops below a certain threshold, thus
inducing farmers to adopt modern technology that employs industry-supplied inputs. Once
agricultural modernization begins, per capita income emerges from stasis and accelerates
toward modern growth. Our calibrated model is largely consistent with the set of historical
data we have compiled on the English economy, accounting well for the growth experience of
England encompassing the Industrial Revolution.

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(Source: Pustaka Negeri Sarawak, 18 Jan 2022)

Source Link: https://ftp.iza.org/dp5239.pdf