The Fundamental Causes of Economic Growth: A Comparative Analysis of the Total Factor Productivity Growth of European Agriculture, 1950-2005

Abstract

In recent decades, the debate on economic growth has largely focused on the role of its fundamental causes: institutions, geography, trade, and culture. This study analyses the underlying causes of agricultural productivity growth in Europe during the second half of the twentieth century. To determine the importance of fundamental causes, Total Factor Productivity growth in European agriculture was calculated for the period 1950-2005 and several econometric models are discussed. This study highlights inclusive institutions, agricultural support policies that encourage innovation, qualified human capital and openness to international trade as key factors that favour productivity growth in agriculture.