New Technological Knowledge, Rural and Urban Agriculture, and Steady State Economic Growth

Abstract

We analyze the growth effects over space arising from the adoption of new agricultural technology in a rural-urban setting. We use a dynamic model to study the impacts of technology and learning on the steady state growth rates of rural and urban regions that produce agricultural goods. New applications of agricultural technologies are tested and adopted in the rural region and they are gradually learned by the urban region. Our analysis leads to four results. First, we determine the steady state growth rate of agricultural output per worker in the rural region.Second, we define an urban to rural region agricultural technology knowledge ratio, analyze its stability properties, and then use this ratio to compute the steady state growth rate of agricultural output per worker in the urban region. Third, for specific parameter values, we study the ratio of agricultural output per worker in the urban to the rural region when both regions have converged to their balanced growth paths. Finally, we discuss the policy implications of our analysis.

Introduction to 'Rural-Urban Dichotomies and Spatial Development in Asia'

“…Like development economists, regional scientists have also analyzed rural-urban dichotomies in the post-world war II era. 5 In this regard, Batabyal et al (2019b) and Batabyal and Yoo (2019) tell us that in the work of many regional scientists, urban regions are frequently dynamic, they display relatively rapid rates of economic growth, they are industrial, and they are often technologically more advanced. In contrast, rural regions are viewed as being not as dynamic, they are often agricultural, they display slow rates of growth, and they are technologically backward.…”

Empirical Analysis of Causal Linkage between Agricultural Output and Real GDP: Evidence from Nigeria

“…Based on their findings, they suggested the public investment in irrigation, credit to farmers and the supports for micro and small agro-based industrialists as the strategic actions to achieve economic growth in India. In another analysis, Batabyal, Kourtit and Nijkamp [20] investigated the roles of rural and urban agro-tech in attaining steady state in economic growth. Of the studies on agriculture and economic growth, none to the best of our knowledge analysed their dynamic and causal relationship for Nigeria within the period investigated.…”