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Abstract

The purpose of the following paper is to explore different factors causing structural changes in the Colombian coffee sector. The Colombian economy is characterized by a revenue function (Dixit and Norman’s GDP function) with three quasi-fixed inputs and three outputs. The characterization of the economy by a unique production possibility frontier allows modeling of the whole economy. This approach will distinguish effects of changing relative prices, different rates and biases of technological change, and changes in relative factor endowments on the coffee sector, the manufacturing sector and the rest of the economy.

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