[JMP] Agriculture, Trade, Migration and Climate Change

Given the agricultural sector’s substantial contribution to both GDP and employment in many developing economies, the climate shock to agricultural productivity has the potential to reshape inter-regional and inter-sectoral labor reallocation as well as agricultural production. I build and quantify a dynamic spatial general equilibrium model incorporating farmers’ optimal crop choices, household migration, and international trade to understand the implications of agricultural productivity shocks induced by climate change around the globe. In particular, the model addresses the limitations of prior studies by accounting for non-homothetic preferences, as well as multi-cropping practices and irrigation heterogeneity across regions. The model is quantified for 20 major crops and 120 countries until year 2100, and simulation exploits the high-resolution spatial data, from the Global Agro-Ecological Zones (GAEZ) v4 project. The baseline simulation analyzes the economic implications of different climate scenarios including Representative Concentration Pathway (RCP) 4.5 and RCP 8.5. A further counterfactual simulation is conducted to quantify the impact of trade cost reductions on agricultural crop products.

Work in progress