TY  - RPRT
        AU  - Yang, Dennis T.
AU  - Zhu, Xiaodong
        TI  - Modernization of Agriculture and Long-Term Growth
        PY  - 2010/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5239
        UR  - https://www.iza.org/publications/dp5239
        AB  - 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.
        KW  - transition mechanisms
KW  - relative price
KW  - agricultural modernization
KW  - Industrial Revolution
KW  - long-term growth
KW  - structural transformation
KW  - England
        ER  -