Economics Dictionary of ArgumentsHome
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| Terms of trade: Terms of trade in economics measure the ratio between a country's export prices and import prices. It indicates the relative value of a nation's exports compared to its imports, reflecting trade advantages. An improvement in terms of trade means a country can import more for a given level of exports, enhancing economic welfare. See also International Trade._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Robert C. Feenstra on Terms of Trade - Dictionary of Arguments
Feenstra I 10-1 Terms of trade/Feenstra: (…) [there are] effects of growth on the terms of trade, i.e. the price of exports relative to imports. This brings us to the famous case of “immiserizing growth,” due to Bhagwati (1958)(1), where we ask whether growth can actually lower a country’s welfare due to a fall in the terms of trade. >Economic growth, >International trade, >Endogenous growth, >Exogenous growth. Developing countries: The idea that developing countries might be subject to a decline in their terms of trade, particularly for primary commodities, is associated with the Latin American economist Raul Prebisch (1950)(2). While there is little evidence to support that hypothesis in general, it is still the case that terms of trade decline due to growth have been observed (Acemoglu and Ventura, 2002(3), Debaere, 2001)(4). >Developing countries, >Acemoglu. 1. Bhagwati, Jagdish N., 1958, “Immiserizing Growth: A Geometrical Note,” Review of Economic Studies, 25, June. 2. Prebisch, Raul, 1950, The Economic Development of Latin America and Its Principal Problems. New York: United Nations. 3. Acemoglu, Daron and Jaume Ventura, 2002, “The World Income Distribution,” Quarterly Journal of Economics, 117(2), 659-694. 4. Debaere, Peter, 2001, “Does International Trade Theory Explain a Country’s Terms of Trade?” University of Texas at Austin, manuscript._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
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