Economic Development and Endogenous Terms-of-Trade Determination: Review and Reinterpretation of the Prebisch-Singer Thesis
In this paper the theoretical literature relating to the Prebisch-Singer Thesis and economic development is extensively reviewed. The aim is to examine models which exhibit a positive relation between indicators of economic development, such as per capita income, real wages, or employment and terms of trade development. In many models the economy is better off when terms of trade fall and income and price elasticities do not appear in the growth rate solutions. As this is at variance with the Prebisch-Singer Thesis, two simple models have been developed: (i) in a vent-for-surplus model, income and price elasticities appear in the solution for employment, but the terms of trade are driven down by the factors that increase employment; (ii) in a model with exogenous employment and imported capital goods, higher income elasticities of export demand increase in the long run growth rates of real wages, per capital income, capital-labour ratio and terms of trade, thus representing the ideas of Prebisch, Singer and Myrdal on the relation between exports and growth.
|Date of creation:||1994|
|Date of revision:|
|Publication status:||Published in Unctad Review (1995): pp. 17-33|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- Athukorala, Premachandra, 1993. "Manufactured exports from developing countries and their terms of trade: A reexamination of the Sarkar-Singer results," World Development, Elsevier, vol. 21(10), pages 1607-1613, October.
- Griffin, Keith & Gurley, John, 1985. "Radical Analyses of Imperialism, the Third World, and the Transition to Socialism: A Survey Article," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1089-1143, September.
- Evans, David, 1987. "The long-run determinants of North-South terms of trade and some recent empirical evidence," World Development, Elsevier, vol. 15(5), pages 657-671, May.
- 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, 05.
- 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 426-42, June.
- Esfahani, Hadi Salehi, 1991. "Exports, imports, and economic growth in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 35(1), pages 93-116, January.
- Bacha, Edmar L., 1978. "An interpretation of unequal exchange from Prebisch-Singer to Emmanuel," Journal of Development Economics, Elsevier, vol. 5(4), pages 319-330, December.
- Burgstaller, Andre, 1985. "North-South trade and capital flows in a ricardian model of accumulation," Journal of International Economics, Elsevier, vol. 18(3-4), pages 241-260, May.
- Darity, William A, Jr, 1990. "The Fundamental Determinants of the Terms of Trade Reconsidered: Long-run and Long-period Equilibrium," American Economic Review, American Economic Association, vol. 80(4), pages 816-27, September.
- Juergen Donges & James Riedel, 1977.
"The expansion of manufactured exports in developing countries: An empirical assessment of s upply and demand issues,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 113(1), pages 58-87, March.
- Donges, Juergen B. & Riedel, James, 1976. "The expansion of manufactured exports in developing countries: An empirical assessment of supply and demand issues," Kiel Working Papers 49, Kiel Institute for the World Economy.
- Andrea Maneschi, 1983. "The Prebisch-Singer Thesis and the 'Widening Gap' between Developed and Developing Countries," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 104-08, February.
- Burgstaller, A. & Saavedra-Rivano, N., 1984. "Capital mobility and growth in a North-South model," Journal of Development Economics, Elsevier, vol. 15(1-3), pages 213-237.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:54864. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.