Welfare and sectoral productivity shifts in a small open economy with imported agricultural inputs: The case of Sub-Saharan Africa

Abstract

This paper studies the impact of sectoral productivity growth on welfare in Sub-Saharan Africa. Using the analytical framework of a DSGE model, the main finding is that, for the estimated values of structural parameters, the allocation of scarce resources to the tradable agricultural sector for boosting productivity leads to a greater increase in overall welfare than would be the case if they were allocated to the non-traded goods sector.