AGRICULTURE’S IMPACT FOR THE ECONOMY: INTER-INDUSTRY LINKAGES AND MULTIPLIER EFFECTS

Abstract

The role of agriculture sector is understood as being vital for economic development and well being of rural areas. Common agriculture policies in the EU and production shocks in agriculture sector reflect in production changes that causes direct and indirect effects for other industries development in the region, as well as, households’ income. This paper aimed to evaluate agriculture sector’s direct and indirect impacts for the economy by analyzing sectoral linkages and multiplier effects. Input-output analysis techniques were applied. Both output and income multipliers were evaluated. This paper supports the idea that agriculture sectors were more multiplying the economy than other sectors on average. This sector remains important catalyst of the economy, especially while taking into account development challenges in rural areas.

Keywords: agriculture, input-output analysis, multiplier effect, inter-industry linkages, networks

Article DOI: http://doi.org/10.15544/RD.2017.057