Terry Roe
University of Minnesota, Applied Economics, Faculty Member
High-value agricultural products such as processed foods are becoming increasingly important in U.S. production and trade. Efficiency gains in primary agriculture are transferred to the processed-food sector in the form of cheaper inputs.... more
High-value agricultural products such as processed foods are becoming increasingly important in U.S. production and trade. Efficiency gains in primary agriculture are transferred to the processed-food sector in the form of cheaper inputs. In turn, efficiency gains in processed-food sectors are transferred, in part, back to primary agriculture by increasing the derived demand and, thus, mitigating commodity price declines. Efficiency gains are relatively more important in primary agriculture than in food processing. Policies that encourage productivity growth and lower production costs will tend to increase the competitiveness of both sectors. Since almost all of the productivity growth in primary agriculture and food processing are passed along in lower prices, consumers are the ultimate beneficiaries.
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The paper questions why agricultural trade compromise between the USA and EC is so difficult, whether a compensatory scheme be found that is both politically feasible and resource saving, and whether liberalizing policies by selected OECD... more
The paper questions why agricultural trade compromise between the USA and EC is so difficult, whether a compensatory scheme be found that is both politically feasible and resource saving, and whether liberalizing policies by selected OECD countries will ease a trade compromise. These questions are addressed in a political economy context since, if the influence of special interests is ignored, trade compromises that both save resources and are politically feasible are unlikely to be searched for or found. The analysis entails the estimation of political preference weights, game theory, and a partial equilibrium world trade model based on 1988 data. The general answers are: the most influential special-interest groups face economic losses that, when coupled with their influence, tend to prevent a broad-based trade compromise given the current set of policy instruments; partial trade liberalization can occur if instruments are decoupled from production incentives, but free trade does ...
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I begin with a discussion of the Carter, Gray, and Furtan paper and then turn to Orden's paper. I conclude with only a few remarks on VillaIssa's paper. First, I take exception to the conceptual framework in CGF, not because the... more
I begin with a discussion of the Carter, Gray, and Furtan paper and then turn to Orden's paper. I conclude with only a few remarks on VillaIssa's paper. First, I take exception to the conceptual framework in CGF, not because the framework is incorrect, nor does it necessarily alter the conclusions drawn from their empirical results. Instead, the approach (their fig. 1) ignores the importance of capital markets in exchange rate determination, while the others, figures 2 and 3, illustrate the problem of casting questions of exchange rates into a partial equilibrium framework. The Slater model is a model of the current
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Capital market integration has increased the scale and mobility of capital movements within and among nations to unprecedented levels. Integration is fairly recent. Frankel concludes from his review of the literature that barriers in the... more
Capital market integration has increased the scale and mobility of capital movements within and among nations to unprecedented levels. Integration is fairly recent. Frankel concludes from his review of the literature that barriers in the major world financial markets were sufficiently low that by 1989, financial markets could be viewed as being fully integrated.' The scale and mobility of capital flows among nations has numerous implications to currency values, interest rates, wealth, and, through current capital account linkages, to relative product and factor prices. Capital flows that have real economic effects also affect the functioning of policy instruments and how effective they are in remunerating an interest group at the expense, if any, of others. This paper provides insights into the process and linkages by which the integration of capital markets has altered economic policy through interest group pressures on government. If economic policy is viewed as the outcome of interest groups seeking through the power of the state that which cannot be provided by the market alone, then capital market adjustments that affect the return to policy instruments can also affect the returns to lobbying resources and, hence, the balance of political influence among the various groups.2 This type of explanation for economic policy has been forwarded under the rubric of models of "rent seeking" (Krueger 1974).3 The paper is organized as follows.4 Selected historical evidence linking capital markets to pressures for legislation in the United States and other countries is briefly reviewed. In some cases, capital market adjustments have eased pressures for protection, while, in other cases, adjustments either forced policy change because of a liquidity constraint or made unprofitable the lobbying for sustaining policy in face of these adjustments. The discussion in the next section provides deeper insight into capital market-lobbying linkages. Discussion focuses on the results from a simple model of rent seeking, where government intervenes in markets and provides sector-specific public goods.
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There is increasing concern that the intensification of cereal production in northern Nigeria is threatening the sustainability of the agricultural environment. This article describes the effects of trade restrictions on grain imports and... more
There is increasing concern that the intensification of cereal production in northern Nigeria is threatening the sustainability of the agricultural environment. This article describes the effects of trade restrictions on grain imports and of fertilizer subsidy on households' decisions, and draws implications for degradation of the agricultural environment. It develops social accounting matrices (SAMs) for two household types as the basis for capturing the structure of resource allocation, cropping choices, and input use, and then uses the SAM to simulate household responses to changes in relative grain prices and fertilizer prices. Both simulations, but particularly the fertilizer price change, favour the shift from cereals to legumes. A third simulation reflecting technical change in legumes results in the largest shifts from cereals to legumes. It is concluded that appropriate policy reforms complemented by technical change will increase diversification of the cropping system ...
Research Interests: Business, Economics, Agricultural Economics, Resource Allocation, Agriculture, and 14 moreApplied Economics, Natural Resource Economics, Technical Change, Soil nitrogen, Social Accounting Matrices., Subsidy, Organic Matter, Policy Reform, Sustainability, Environment, Cropping System, ENVIRONMENTAL SCIENCE AND MANAGEMENT, Cumulant, and Cropping
Effects of economy-wide factors on Brazilian economic growth and biofuels production: an inter-temporal general equilibrium analysis
This report is an application of the conceptual model detailed in UNEP, Ecosystem Service Economic Working Paper No. 20, "Ecosystem Services and the Macroeconomy: A Review of Linkages and Evaluation of Analytical Tools".
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Removing trade barriers, subsidies, and other trade distortions forms of support will cause aggregate world prices of agricultural commodities to rise by over 11 percent relative to an index of all other prices. Agricultural support and... more
Removing trade barriers, subsidies, and other trade distortions forms of support will cause aggregate world prices of agricultural commodities to rise by over 11 percent relative to an index of all other prices. Agricultural support and protection in developed countries is the major cause of low agricultural prices, and implicitly, a tax on net agricultural exporters in developing countries. The reform of agricultural policies would likely increase livestock product prices more than any other commodity. Reform increases world trade in agricultural commodities, but leaves the level of total agricultural production almost unchanged. In the short to medium term, some net agricultural importing countries suffer a welfare loss due to an adverse change in their terms of trade that reform causes. In the longer-run, however, agricultural policy reform benefits almost all countries, and developing countries in particular, due to the change reform induces in the developing countries’ investme...
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HIV prevalence dynamics are introduced into a three sector, neoclassical growth model. The model is calibrated to South African national accounts data and used to examine the potential impact of HIV/AIDS on economic growth. Projections... more
HIV prevalence dynamics are introduced into a three sector, neoclassical growth model. The model is calibrated to South African national accounts data and used to examine the potential impact of HIV/AIDS on economic growth. Projections portend that, if left unchecked, the long run impact of HIV/AIDS could cause South African GDP to be about 60% less than would be the level of GDP in the absence of the disease. In spite of a relatively high death rate, the disease is also found to decrease the per capita level of GDP, due mostly to a decline in labor productivity and a corresponding slower growth in capital deepening. JEL Classification: I19, O11, O41, O55 ∗Professor and Associate Professor, respectively, Department of Applied Economics, University of Minnesota, St. Paul, MN. Senior authorship is not assigned. email: troe @umn.edu; smith142@umn.edu †We are grateful to Andre Jooste, Germano Mwabu, Haroumi Nelson, and Chris Udry for helpful comments on earlier versions of this paper. M...
agricultural research centers that receive principal funding from governments, private foundations, and international and regional organizations, most of which are members of the Consultative Group on International Agricultural Research... more
agricultural research centers that receive principal funding from governments, private foundations, and international and regional organizations, most of which are members of the Consultative Group on International Agricultural Research (CGIAR). FINANCIAL CONTRIBUTORS AND PARTNERS IFPRI’s research, capacity strengthening, and communications work is made possible by its financial contributors and partners. IFPRI gratefully acknowledges generous unrestricted funding from Australia
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Research Interests: Economics, Climate Change, Irrigation, Water resources, Agricultural Economics, and 15 moreApplied Economics, Water Management, General Equilibrium, CGE modelling, South Africa, Water Supply, Water Pricing, Computable General Equilibrium, Water Allocation, Agricultural Production, Irrigation Water, Water Conservation, Rural Livelihood, Irrigated Agriculture, and Policy Reform
Using an endogenous growth framework, this paper analyzes the impact of lobbying for public goods on the long run steady-state growth rate of the economy. A socially optimal level of lobbying can be found to exist in the absence of a... more
Using an endogenous growth framework, this paper analyzes the impact of lobbying for public goods on the long run steady-state growth rate of the economy. A socially optimal level of lobbying can be found to exist in the absence of a social planner. Atomistic households, however, exceed this level by viewing taxes as fixed, ignoring the aggregate tax impact of lobbying via increased public expenditures. Two extensions are presented. In one, anti-tax lobbying is analyzed, drawing parallel results. In another, a quasi-public good is introduced, lobbying for which is based not on altruism, but on private gains, though public gains occur as a side effect.
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The closed economy neoclassical growth model predicts convergence to a capital stock level that is independent of its initial level, suggesting that discrepancies in per capita income among the world’s economies should largely disappear... more
The closed economy neoclassical growth model predicts convergence to a capital stock level that is independent of its initial level, suggesting that discrepancies in per capita income among the world’s economies should largely disappear in the long-run. This paper shows that international trade among countries differing only in their level of initial capital is sufficient to generate long-run income differences across countries. The long-run level of capital of the country most initially endowed with capital is shown to exceed the level of capital otherwise obtained in autarchy while the country least endowed converges to a capital stock lower than would otherwise be obtained in autarchy.
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The closed economy neoclassical model predicts lung-run convergence in per-capita income. We show, within a neoclassical framework, that international trade among two countries differing only in their initial capital endowment generates... more
The closed economy neoclassical model predicts lung-run convergence in per-capita income. We show, within a neoclassical framework, that international trade among two countries differing only in their initial capital endowment generates long-run income differences. Our results suggests that trade creates opposite incentives to accumulate capital. Transitionally, the returns to investment with trade are smaller for countries initially less endowed with capital as when compared to their autarchic situation, while the reverse happens for those countries most endowed with capital. Thus, countries starting with relatively less (more) capital end, in the long run, with less (more) capital than in autarchy.
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We investigate the Ramsey-like dynamics of nonrenewable resource abundance on economic growth and welfare in a two country world. One country is endowed with a non-renewable- resource Otherwise, countries are identical. The one country... more
We investigate the Ramsey-like dynamics of nonrenewable resource abundance on economic growth and welfare in a two country world. One country is endowed with a non-renewable- resource Otherwise, countries are identical. The one country result of Rodriguez and Sachs (1999) that the initial stock of the resource influences negatively the GDP growth of the resource-rich country, is shown to not hold in general. The endowment of the nonrenewable resource can have an initial positive effect on the growth rate of the resource-rich country provided the elasticity of the initial price of the resource with regard to the initial stock of the resource is greater than minus one. The ratio of the consumption levels of the two countries are shown to be constant over time, and determined by the ratio of initial wealth. An analytical solution of the model allows us to indicate how accumulable and depletable assets affect per country welfare and income growth. For this case we demonstrate that a tec...
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Contact for this paper: Laura Bipes, Department of Applied Economics, University of Minnesota, 1994 Buford Avenue, 232 ClaOff, St. Paul, MN 55108. This volume contains the main papers that were presented at an IATRC symposium which... more
Contact for this paper: Laura Bipes, Department of Applied Economics, University of Minnesota, 1994 Buford Avenue, 232 ClaOff, St. Paul, MN 55108. This volume contains the main papers that were presented at an IATRC symposium which focused on Policy Reform, Market Stability, and Food Security. It was held June 26-27, 1998 in Alexandria, Virginia and was co-sponsored by the Center
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HIV prevalence dynamics are introduced into a three sector, neoclassical growth model. The model is calibrated to South African national accounts data and used to examine the potential impact of HIV/AIDS on economic growth. Projections... more
HIV prevalence dynamics are introduced into a three sector, neoclassical growth model. The model is calibrated to South African national accounts data and used to examine the potential impact of HIV/AIDS on economic growth. Projections portend if left unchecked, the long run impact of HIV and AIDS could drive South African GDP to levels that are over 60% less than no-HIV levels, with AIDS death rates decreasing the long run stock of labor by over 60%.
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This paper focuses on estimating the effects of the real FDI-weighted exchange rate on real U.S. foreign direct investment (FDI) in the global processed food industry. We use a straightforward production possibility framework as our... more
This paper focuses on estimating the effects of the real FDI-weighted exchange rate on real U.S. foreign direct investment (FDI) in the global processed food industry. We use a straightforward production possibility framework as our theoretical basis to demonstrate the shift of production between countries on the basis of exchange rate fluctuations. The log-log regression model, derived from the theoretical model, gives statistically robust results to show that for the years 1983 to 2002, the exchange rate fluctuations, the level of fixed capital in the U.S. food industry, and the cost of materials in both the United States and abroad were major determinants of the stock of U.S. FDI in the global processed food industry. As the dollar appreciated, U.S. FDI increased. An overall conclusion is that countries with an undervalued exchange rate will experience increased FDI. Countries with overvalued exchange rates incur costs from lost export opportunities for domestic firms as well as ...
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While it is generally accepted that change in the real value of the dollar is an important determinant of exports, it has not been rigorously demonstrated that this relationship, derivable from theory, holds empirically for agricultural... more
While it is generally accepted that change in the real value of the dollar is an important determinant of exports, it has not been rigorously demonstrated that this relationship, derivable from theory, holds empirically for agricultural exports and the components of agricultural exports. Starting with a dynamic maximizing framework, this paper estimates the real trade-weighted exchange rate and trade partner income effects on U. S. agricultural exports. For the period 1970–2006, a one percent annual increase in trade partners’ income is found to increase total agricultural exports by about 0. 75 percent, while a one percent appreciation of the dollar relative to trade partner trade-weighted currencies decreases total agricultural exports by about 0. 5 percent. While these effects carry over to 12 commodity subcategories, they are conditioned by differences between bulk and high value commodities, and differences in the export demand from high compared to low income countries. We use...
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... Document details. Title Agriculture, trade, and the environment: discovering and measuring the critical linkages. Editors Bredahl, ME;Ballenger, N.;Dunmore, JC;Roe, TL Book Agriculture, trade, and the environment: discovering and... more
... Document details. Title Agriculture, trade, and the environment: discovering and measuring the critical linkages. Editors Bredahl, ME;Ballenger, N.;Dunmore, JC;Roe, TL Book Agriculture, trade, and the environment: discovering and measuring the critical linkages. 1996 pp. ...
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... Author info | Abstract | Publisher info | Download info | Related research | Statistics. Author Info. Roe, Terry Shane, Mathew ... Download Info. To download: If you experience problems downloading a file, check if you have the proper... more
... Author info | Abstract | Publisher info | Download info | Related research | Statistics. Author Info. Roe, Terry Shane, Mathew ... Download Info. To download: If you experience problems downloading a file, check if you have the proper application to view it first. ...
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ABSTRACT A two-sector Ramsey-type model of growth is developed to investigate how agricultural productivity affects economic growth. In a closed-economy framework, the transitional dynamics of the model establish theoretically that when... more
ABSTRACT A two-sector Ramsey-type model of growth is developed to investigate how agricultural productivity affects economic growth. In a closed-economy framework, the transitional dynamics of the model establish theoretically that when preferences respect Engel's law, the level and growth rate of agricultural productivity influence the speed of capital accumulation. Further, a calibration exercise shows that a small difference in agricultural productivity has drastic implications for the rate and pattern of growth of the economy. Hence, low agricultural productivity can form a bottleneck limiting growth, because high food prices result in a low saving rate. The paper also develops a framework to analyse the same relationship in the case of an economy open to international trade. We establish that, in the long run, openness to trade increases the sustainability as well as the growth rate of the economy – and, hence, may offer a means of bypassing the previously mentioned bottleneck created by low agricultural productivity.