This paper aims to explain why and how the service sector may grow faster than manufacturing. It develops a two-sector, closed-economy model, having a manufacturing sector and a service sector. Accumulation of human capital serves as the basis of growth. The analysis focuses on business services, while household services are also considered. It is argued that differences in returns to scale between the two sectors and employment frictions in manufacturing explain why the growth rate of the service sector may be higher. The model also features that within the service sector the business services sub-sector may grow faster than household services.Résumé. Croissance dans les services aux entreprises : une hypothèse ancrée du côté de l'offre. Ce texte viseà expliquer pourquoi et comment le secteur des services peut croître plus vite que le secteur manufacturier. On développe un modèle d'économie ferméeà deux secteurs -un secteur manufacturier et un secteur des services. L'accumulation du capital humain està la base de la croissance. L'analyse met l'accent sur les services aux entreprises mais considère aussi les services domestiques. On suggère que les différences entre secteurs dans les rendementsà l'échelle, et les frictions dans l'emploi dans le secteur manufacturier expliquent pourquoi le taux de croissance du secteur des services peut etre plusélevé. Le modèle suggère aussi qu'à l'intérieur du secteur des services, le soussecteur des services aux entreprises peut croître plus vite que le sous-secteur des services domestiques.
We investigate the sectoral and the distributional effects of a food subsidy program, where food consumption in the economy is subsidized by taxing the manufacturing good producers. In a two-agent model comprising of farmer and industrialist households, agents consume food to accumulate health. Simulations indicate that while the subsidy program increases food output and agents’ health both in the short run and the long run, manufacturing output and aggregate real GDP appear to fall in the short run and increase only in the long run. The program does not make both agents better off and exhibits social welfare gains for a limited range of subsidies.
Rice (Oryza sativa L.) is one among the foremost important staple food crops globally. In Asia, more than two billion people are getting 60-70 per cent of their energy requirement from rice and its derived products. In India, rice occupies an area of 43.79 million ha with an average production of 112.91 million tones and productivity of 2.58 tonnes/ha. Demand for rice is growing every year and it is estimated that in 2025 AD, the requirement would be 140 million tonnes. To accomplish this objective, the profitability of rice must be brought to the level of 3.3 tons/ha (Anjani et al., 2014). Food security depends on the power to extend production with decreasing availability of water to grow crops. Rice is one of the greatest water user among cereal crops, consuming about 80% of the total irrigated fresh water resources in Asia. To produce 1 kg of grain, farmers have to supply 3-5 times more water in rice fields than other cereals (Kumar et al., 2013). Quickly exhausting water resources threaten the sustainability of the irrigated rice and subsequently the food security and vocation of rice producers and purchasers. In Asia, 17 million hectare (Mha) of flooded rice areas may encounter "physical water scarcity" and 22 Mha may experience "economic water scarcity" by 2025. Key technological interventions which could alter or rectify the utilization of freshwater in agriculture are the need of the hour. In this context, the scientific interventions on water management involving direct seeded rice (DSR), system of rice intensification (SRI), alternate wetting and drying (AWD), furrow irrigated raised bed planting systems (FIRB) and other inclusive technological practices could enforce appropriate irrigation schedules. The potentials for water savings in rice production appear to be very large, however there is need to convince farmers to use less water without compromising land productivity.
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