We examine the contribution of trade to the rise of modern agricul-ture, taking into account interactions between trade, input require-ments, and technology adoption. We develop and estimate a new multicountry general equilibrium model that incorporates producers’ choices of which crops to produce and with which technologies at the level of grid cells covering the earth’s surface. We find that trade cost reductions in agricultural inputs and the international transmission of productivity growth in the agricultural input sector since the 1980s in-duced large shifts from traditional, labor-intensive technologies to mod-ern, input-intensive ones, with important global and distributional implications for productivity and welfare.
ASJC Scopus subject areas
- Economics and Econometrics