WATER MANAGEMENT AND ECONOMIC GROWTH. A MACROECONOMIC MODEL

The distribution of water has been extensively studied in the past through the water markets, the water banks and others. The present paper surveys the water management in an agricultural economy and the economic growth. The economic agents of this economy are the farmers that use the water resources as an intermediate input, the consumers and the monopolistic water service that supplies the farmers with water. In particular, we construct a macroeconomic model where the role of the state through the constructions like reservoirs, dams and subsidies to the monopolistic firm, in the economic growth is being surveyed. The main result of this model is that the economic growth is reversely dependent on the cost of this technical work while an increase in the cost of such a work has similar results with an increase in the labour.