
doi: 10.2139/ssrn.3481037
Macroeconomists and growth economists often assume that the relative price of agriculture is determined domestically, and insulated from external forces. We examine this proposition empirically using panel data models with time effects and then an unobserved factor error structure. We find that external influences are most powerful in Asia and least powerful in sub-Saharan Africa, but even in some African countries, the relative price co-varies quite strongly with the regional average. In contrast, the evidence that this effect has increased over time is limited.
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