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How moving to world prices affects the terms of trade in 15 countries of the former Soviet Union

  • Tarr, David G.

The author presents the first documented estimates of how moving to international trade prices effects the terms of trade in 15 countries of the former Soviet Union. First, he decomposes the total impact of a change in the inter-republic and extra-republic terms of trade. The broad pattern, he estimates, is that exporters of raw material and energy (notably Kazakhstan, Russia, and Turkmenistan) gain, whereas countries that concentrate in food and machinery exports (notably the Belarus, Estonia, Latvia, Lithuania, and especially Moldova) are the biggest losers. The results support the customs union theory of pricing within the CMEA. The author also estimates the initial impact of terms of trade on the GDP for all 15 countries. This, as well as the commodity composition of trade and estimated changes in relative prices by commodity at the 105-sector and 15-sector levels for each of the 15 independent states, is available in the appendix.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1074.

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Date of creation: 31 Jan 1993
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Handle: RePEc:wbk:wbrwps:1074
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  1. Desai, Padma, 1986. "Is the Soviet Union subsidizing Eastern Europe?," European Economic Review, Elsevier, vol. 30(1), pages 107-116, February.
  2. Brada, Josef C., 1988. "Interpreting the Soviet subsididzation of Eastern Europe," International Organization, Cambridge University Press, vol. 42(04), pages 639-658, September.
  3. Brada, Josef C., 1985. "Soviet subsidization of Eastern Europe: The primacy of economics over politics?," Journal of Comparative Economics, Elsevier, vol. 9(1), pages 80-92, March.
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