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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.

Suggested Citation

  • Tarr, David G., 1993. "How moving to world prices affects the terms of trade in 15 countries of the former Soviet Union," Policy Research Working Paper Series 1074, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1074

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    References listed on IDEAS

    1. Brada, Josef C., 1988. "Interpreting the Soviet subsididzation of Eastern Europe," International Organization, Cambridge University Press, vol. 42(04), pages 639-658, September.
    2. 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.
    3. Desai, Padma, 1986. "Is the Soviet Union subsidizing Eastern Europe?," European Economic Review, Elsevier, vol. 30(1), pages 107-116, February.
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    Cited by:

    1. Lev Freinkman & Evgeny Polyakov & Carolina Revenco, 2004. "Trade Performance and Regional Integration of the CIS Countries," World Bank Publications, The World Bank, number 14933.
    2. Alexander Granberg & Victor Suslov & Larisa Melnikova, 1998. "Equilibrium, kernel, integration in the multiregional system under liberalization of external trade," ERSA conference papers ersa98p127, European Regional Science Association.
    3. Marina Bakanova & L303272cio Vinhas de Souza, 2001. "Trade and Growth under Limited Liberalization, The Case of Belarus," International Trade 0108005, EconWPA.
    4. Pomfret, Richard, 2000. "Agrarian Reform in Uzbekistan: Why Has the Chinese Model Failed to Deliver?," Economic Development and Cultural Change, University of Chicago Press, vol. 48(2), pages 269-284, January.
    5. Shepotylo, Oleksandr & Tarr, David, 2007. "The structure of import tariffs in the Russian Federation : 2001-05," Policy Research Working Paper Series 4265, The World Bank.
    6. Tarr, David, 2007. "Russian WTO accession : what has been accomplished, what can be expected," Policy Research Working Paper Series 4428, The World Bank.
    7. Avanesyan, Vahram & Freinkman, Lev, 2002. "Costing-out the Big Bang: Impact of external shocks on the Armenian economy at the outset of transition," MPRA Paper 10012, University Library of Munich, Germany.


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