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Keynote File Edit Insert Slide Format Arrange View Play Share Window Help 40% 3 Wed 28 Jul 8:04:49 P Untitled Edited 50% A RA 69 Collaborate View Zoom Add Slide Play Table Chart Text Shape Media Comment Format Animate Docu Slide 100% Slide Layout Big Fact 1 Appearance Title Body Slide Number Background Colour Fill O Agriculture's role in the process of economic growth has framed a central question in development economics for several decades (e.g., Johnston and Mellor, 1961, Schultz, 1968). While arguments differ regarding the specific mechanisms through which agricultural productivity increases might contribute to structural change in the economy, it has long been theorized that advances in agriculture can promote shifts in labor to higher productivity sectors that offer higher real incomes. Empirical work in more recent years has helped inform the conceptual arguments, and underscored the long-term growth and poverty reduction benefits from agriculture, especially for the most extreme forms of poverty (e.g., Gollin et al., 2007, Ravallion and Chen, 2007, de Janvry and Sadoulet, 2010, Christiaensen et al., 2011). Africa's recent years of economic growth seem to follow a regular pattern of structural change away from agriculture to other economic sectors (McMillan and Harttgen, 2014). At the same time, additional evidence underscores the role of the manufacturing sector in driving structural change and long-term convergence in incomes across countries (McMillan and Rodrik, 2011, Rodrik, 2013). The theoretical ambiguity on the role of agricultural productivity growth in structural change is captured by the formulation of Matsuyama (1992), which shows opposite effects in closed economies and small open economies. These debates and other evidence regarding agriculture's relatively low value added per worker compared to other sectors (eg. Gollin et al., 2014) have prompted some researchers to narrow the number of developing countries in which agriculture is recommended as a priority sector for investment (Collier and Dercon, 2014). These issues present a first order concern for understanding why some countries have not experienced long-term economic progress and what to do about it. If agriculture can play a central and somewhat predictable role within the poorest countries, then it is a natural candidate for targeted public investment Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest- moving inventory item has a demand of 6,000 units per year. The cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. The average ordering cost is $30 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (This is a corporate operation, and the are 250 working days per year) A) What is the EOQ? B) What is the average inventory if the EOQ is used? c) What is the optimal number of orders per year? The theoretical and empirical literature regarding structural change is vast, yet statistically identifying the causal role of agricultural productivity is challenging. Indicators of structural change tend to trend together in the process of development, impacts on labor force structure are likely to occur after a lag, and the macroeconomic nature of the question is not amenable to micro-style experiments. Our contribution is to focus on the role of agricultural inputs as drivers of higher yields and subsequent economic transformation, using the unique economic geography of fertilizer production in our identification strategy. The paper builds on the insights of Lagakos and Waugh (2013), which highlights gaps in understanding of cross-country variations in agricultural productivity. A variety of studies have estimated sources of total factor productivity (TFP) in agriculture in the poorest countries, including in sub-Saharan Africa (e.g., Bates and Block, 2013, Block, 2014), but agriculture is such an input-intensive sector that TFP assessments only provide one piece of the overarching crop sector puzzle. Our cross-country analysis also complements Bustos et al. (2016), who look at structural change Brazilian municipalities with the diffusion of agricultural technology and practices in soy Edit Slide Layout 2 O 28 Mechel