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Trend and volatility in the net barter terms of trade, 1900-92: new results from the application of a (not so) new method

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  • David Sapsford

    (International Business Research Group, University of Lancaster, Lancaster, UK)

  • V. N. Balasubramanyam

    (International Business Research Group, University of Lancaster, Lancaster, UK)

Abstract

This paper argues that the trend and volatility in the terms of trade need to be treated not as separate phenomena but rather as 'twin-pillars' of the same underlying problem faced by LDCs; namely their heavy dependence on primary commodities (or more recently upon components and parts of manufactured goods) as a source of export revenue. The paper reports estimates relating to the magnitude of both the trend and volatility that occurred in the barter terms of trade since 1900. In particular, the authors report evidence to suggest that after 1972 there occurred a major increase in the trend rate deterioration of the net barter terms of trade and that this worsening trend was accompanied by a marked increase in volatility. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • David Sapsford & V. N. Balasubramanyam, 1999. "Trend and volatility in the net barter terms of trade, 1900-92: new results from the application of a (not so) new method," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(6), pages 851-857.
    • Handle: RePEc:wly:jintdv:v:11:y:1999:i:6:p:851-857
    DOI: 10.1002/(SICI)1099-1328(199909/10)11:6<851::AID-JID631>3.0.CO;2-7
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    References listed on IDEAS

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    1. D. Sapsford & P. Sarkar & H. W. Singer, 1992. "The prebisch‐singer terms of trade controversy revisited," Journal of International Development, John Wiley & Sons, Ltd., vol. 4(3), pages 315-332, May.
    2. Bleaney, Michael F & Greenaway, David, 1993. "Long-Run Trends in the Relative Price of Primary Commodities and in the Terms of Trade of Developing Countries," Oxford Economic Papers, Oxford University Press, vol. 45(3), pages 349-363, July.
    3. Cuddington, John T & Urzua, Carlos M, 1989. "Trends and Cycles in the Net Barter Terms of Trade: A New Approach," Economic Journal, Royal Economic Society, vol. 99(396), pages 426-442, June.
    4. Sapsford, David & Balasubramanyam, V. N., 1994. "The long-run behavior of the relative price of primary commodities: Statistical evidence and policy implications," World Development, Elsevier, vol. 22(11), pages 1737-1745, November.
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    Cited by:

    1. Surajit Deb, 2003. "Terms of Trade and Supply Response of Indian Agriculture: Analysis in Cointegration Framework," Working papers 115, Centre for Development Economics, Delhi School of Economics.
    2. José Antonio Ocampo & María Angela Parra, 2004. "The commodity terms of trade and their strategic implications for development," International Trade 0403001, University Library of Munich, Germany.

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