Agricultural Subsidy/Tax in an Intersectoral Economic Model with Distinct Population Growth Rates
DOI:
https://doi.org/10.5540/03.2023.010.01.0005Keywords:
Two-Sector Economic Growth Model, Labor Migration, Distinct Population Growth Rates, Agricultural Subsidy/TaxAbstract
In this paper we introduce an ad valorem subsidy/tax to the agricultural sector in a two-sector – agricultural and industrial – migration and economic growth model. We show that the adoption of an agricultural subsidy (tax) by the government slows down (accelerates) the growing over time of the per capita capital of the economy, and of the proportion of workers in the industrial sector. Besides, we show that the adoption of a subsidy (tax) in the agricultural sector implies in a less (more) industrialized economy in the long run.
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References
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