Relative prices and investment: an essay on resource allocation

In this essay the mainstream story about how resources are allocated in a market economy is challenged. The conventional view is that a change in relative prices leads to a change in the composition of output as a result of a reallocation of the stock of primary factors of production (land, labor an...

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Detalles Bibliográficos
Autor: Griffin, Keith
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2005
País:Brasil
Institución:Instituto de Pesquisa Econômica Aplicada (IPEA)
Repositorio:Repositório Institucional da IPEA (RCIpea)
Idioma:inglés
OAI Identifier:oai:repositorio.ipea.gov.br:11058/15630
Acceso en línea:https://repositorio.ipea.gov.br/handle/11058/15630
Access Level:acceso abierto
Palabra clave:Poverty
Relative prices
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spelling Relative prices and investment: an essay on resource allocationPovertyRelative pricesIn this essay the mainstream story about how resources are allocated in a market economy is challenged. The conventional view is that a change in relative prices leads to a change in the composition of output as a result of a reallocation of the stock of primary factors of production (land, labor and capital). No investment is required. This is possible, however, only if the primary factors of production are homogeneous and hence highly mobile. If land, labor and capital are heterogeneous and specific to particular economic activities, resources will not be mobile and the ability of an economy to respond to price incentives will be highly dependent on the rate of investment in natural, physical and human capital. The argument is illustrated by considering the response of economic agents to changes in the relative price of annual and permanent crops, a change in agriculture’s terms of trade, structural adjustment and trade liberalization in sub-Saharan Africa and systemic change from plan to market in the former Soviet Union15 p. : il.2024-10-04T00:02:26Z2024-10-04T00:02:26Z20052005info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://repositorio.ipea.gov.br/handle/11058/15630ark:/51990/001300000gqcmengInternational Policy Centre for Inclusive GrowthUnited Nations Development ProgrammeLicença total exclusivaO texto e dados desta publicação podem ser reproduzidos desde que as fontes sejam citadas. Reproduções com fins comerciais são proibidas.info:eu-repo/semantics/openAccessreponame:Repositório Institucional da IPEA (RCIpea)instname:Instituto de Pesquisa Econômica Aplicada (IPEA)instacron:IPEAGriffin, Keith2025-07-31T22:35:53Zoai:repositorio.ipea.gov.br:11058/15630Repositório InstitucionalPUBhttp://repositorio.ipea.gov.br/oai/requestsuporte@ipea.gov.bropendoar:2025-07-31T22:35:53Repositório Institucional da IPEA (RCIpea) - Instituto de Pesquisa Econômica Aplicada (IPEA)false
dc.title.none.fl_str_mv Relative prices and investment: an essay on resource allocation
title Relative prices and investment: an essay on resource allocation
spellingShingle Relative prices and investment: an essay on resource allocation
Griffin, Keith
Poverty
Relative prices
title_short Relative prices and investment: an essay on resource allocation
title_full Relative prices and investment: an essay on resource allocation
title_fullStr Relative prices and investment: an essay on resource allocation
title_full_unstemmed Relative prices and investment: an essay on resource allocation
title_sort Relative prices and investment: an essay on resource allocation
dc.creator.none.fl_str_mv Griffin, Keith
author Griffin, Keith
author_facet Griffin, Keith
author_role author
dc.subject.por.fl_str_mv Poverty
Relative prices
topic Poverty
Relative prices
description In this essay the mainstream story about how resources are allocated in a market economy is challenged. The conventional view is that a change in relative prices leads to a change in the composition of output as a result of a reallocation of the stock of primary factors of production (land, labor and capital). No investment is required. This is possible, however, only if the primary factors of production are homogeneous and hence highly mobile. If land, labor and capital are heterogeneous and specific to particular economic activities, resources will not be mobile and the ability of an economy to respond to price incentives will be highly dependent on the rate of investment in natural, physical and human capital. The argument is illustrated by considering the response of economic agents to changes in the relative price of annual and permanent crops, a change in agriculture’s terms of trade, structural adjustment and trade liberalization in sub-Saharan Africa and systemic change from plan to market in the former Soviet Union
publishDate 2005
dc.date.none.fl_str_mv 2005
2005
2024-10-04T00:02:26Z
2024-10-04T00:02:26Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
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dc.identifier.uri.fl_str_mv https://repositorio.ipea.gov.br/handle/11058/15630
dc.identifier.dark.fl_str_mv ark:/51990/001300000gqcm
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identifier_str_mv ark:/51990/001300000gqcm
dc.language.iso.fl_str_mv eng
language eng
dc.rights.driver.fl_str_mv International Policy Centre for Inclusive Growth
United Nations Development Programme
Licença total exclusiva
info:eu-repo/semantics/openAccess
rights_invalid_str_mv International Policy Centre for Inclusive Growth
United Nations Development Programme
Licença total exclusiva
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:Repositório Institucional da IPEA (RCIpea)
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reponame_str Repositório Institucional da IPEA (RCIpea)
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repository.mail.fl_str_mv suporte@ipea.gov.br
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