Assessing the Dynamics of Terms of Trade in a Model of Cumulative Causation and Structural Change
AbstractFollowing a structural economic dynamic approach, this paper examines the potential impact of cumulative causation on the dynamics of terms of trade between North-South countries. Cumulative causation although being responsible for generating technical progress may cause leakage of some productivity gains from the exporting sectors to abroad. In this vein possibilities exist that the laggard countries benefit from this effect but the final outcome depends on structural economic dynamics of both developed and underdeveloped nations. The overall dynamics of the terms of trade is then shown to be strongly affected both by demand and supply considerations.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 46049.
Date of creation: 2013
Date of revision:
Structural economic dynamics; terms of trade; cumulative causation.;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
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