The Fallacy Of Composition: A Review Of The Literature
The paper reviews the literature on the fallacy of composition with an emphasis on labour-intensive manufactures. It briefly addresses the protectionist and the partial-equilibrium versions of the argument before focusing on general-equilibrium considerations and the debate on the manufactures terms of trade of developing countries. The review indicates a potential fallacy of composition problem in labour-intensive manufactures, where competition among different groups of developing countries for export market shares may constitute a new form of the fallacy of composition. The likelihood of a country that exports labour-intensive manufactures to become subject to the fallacy of composition rises with the increasing integration of several strongly populated low-income countries into world markets, while it declines with continuous structural change and favourable aggregate demand conditions particularly in developed and the advanced developing countries.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +41 22 907 12 34
Fax: +41 22 907 00 43
Web page: http://www.unctad.org/Templates/Page.asp?intItemID=2101&lang=1
More information through EDIRC
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.:
- Faini, Riccardo & Clavijo, Fernando & Senhadji-Semlali, Abdel, 1992. "The fallacy of composition argument : Is it relevant for LDCs' manufactures exports?," European Economic Review, Elsevier, vol. 36(4), pages 865-882, May.
- Prema-Chandra Athukorala, 2000. "Manufactured exports and terms of trade of developing countries: Evidence from Sri Lanka," Journal of Development Studies, Taylor & Francis Journals, vol. 36(5), pages 89-104.
- Cline, William R., 1982. "Can the East Asian model of development be generalized?," World Development, Elsevier, vol. 10(2), pages 81-90, February.
- Ianchovichina, Elena & Robert McDougall, 2000.
"Theoretical Structure of Dynamic GTAP,"
GTAP Technical Papers
480, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Ianchovichina,Elena & Walmsley,Terrie L. (ed.), 2012. "Dynamic Modeling and Applications for Global Economic Analysis," Cambridge Books, Cambridge University Press, number 9781107011694.
- Warwick J McKibbin & K K Tang, 1998.
"The Global Economic Impacts of Trade and Financial Reform in China,"
Departmental Working Papers
1998-08, The Australian National University, Arndt-Corden Department of Economics, revised Sep 1998.
- Warwick J. McKibbin & K. K. Tang, 2000. "Trade and Financial Reform in China: Impacts on the World Economy," The World Economy, Wiley Blackwell, vol. 23(8), pages 979-1003, 08.
- Zhi Wang, 1999. "The Impact of China's WTO Entry on the World Labour-intensive Export Market: A Recursive Dynamic CGE Analysis," The World Economy, Wiley Blackwell, vol. 22(3), pages 379-405, 05.
- Sapsford, David, 1990. "Primary Commodity Prices and the Terms of Trade," The Economic Record, The Economic Society of Australia, vol. 66(195), pages 342-56, December.
- Schiff, Maurice, 1995. "Commodity exports and the adding-up problem in LDCs: Trade, investment and lending policy," World Development, Elsevier, vol. 23(4), pages 603-615, April.
- Terrie L. Walmsley & Thomas W. Hertel, 2001.
"China's Accession to the WTO: Timing is Everything,"
The World Economy,
Wiley Blackwell, vol. 24(8), pages 1019-1049, 09.
- Hertel, Thomas W. & Terrie Walmsley, 2000. "China's Accession to the WTO: Timing is Everything," GTAP Working Papers 403, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- 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.
- Ianchovichina, Elena & Martin, Will, 2001.
"Trade liberalization in China's accession to the World Trade Organization,"
Policy Research Working Paper Series
2623, The World Bank.
- Martin, Will & Mitra, Devashish, 2001. "Productivity Growth and Convergence in Agriculture versus Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 49(2), pages 403-22, January.
- Bloch, Harry & Sapsford, David, 2000. "Whither the Terms of Trade? An Elaboration of the Prebisch-Singer Hypothesis," Cambridge Journal of Economics, Oxford University Press, vol. 24(4), pages 461-81, July.
- 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 349-63, July.
When requesting a correction, please mention this item's handle: RePEc:unc:dispap:166. 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: (Joerg Mayer)
If references are entirely missing, you can add them using this form.