ISSN 2375-0693
African Journal of Agricultural Economics and Rural Development ISSN 2375-0693 Vol. 7 (1), pp. 677-685, January, 2019. © International Scholars Journals
Full Length Research Paper
Agriculture and economic growth in Palestine: Growth multipliers from a four-sector simulation model
Abbas Tirawi, Tir Ghazil and Qadura Ziad
Agricultural Economics, Faculty of Agriculture, Al-Quds Open University, Palestine.
Accepted 07 April 2018
Abstract
This paper develops a four-sector numerical simulation model of economic growth in Palestine which permits the calculation of macroeconomic growth multipliers resulting from income shock to agriculture, services, manufacture and non-manufacture. The resulting multipliers are 1.53 for agriculture, 1.63 for services, 1.52 for manufacture and 1.30 for non-manufacture. An income shock to agriculture is clearly the most progressive choice, indicating the need to highlight agricultural development in growth strategy for Palestine. Yet the simulation results further indicate that going imposes relatively little trade off against total benefit. While a $1 Service sector income shock generates $0.63 in indirect benefit, a $1 agricultural income shock still generates $0.53 in indirect gains-a somewhat smaller benefit, but one likely to make the greatest possible impact on poverty reduction.
Key words: Agriculture, economic growth, growth multiplier, Palestine.