Assessing the dynamics of terms of trade in a model of cumulative causation and structural change
By: ARAUJO, Ricardo Azevedo
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ArticlePublisher: São Paulo : Editora 34, jan./mar. 2016Title translated: Avaliando a dinâmica dos termos de troca em um modelo de causalidade cumulativa e mudança estrutural.Online resources: Acesso Revista de Economia Política = Brazilian Journal of Political Economy 36, 1, p. 150-167Abstract: The motivation for this paper stems from the steady decline in the share of consumer expenditures on goods produced in the global south, coupled with the (empirically ambiguous) Singer/Prebisch hypothesis that this can be explained by a secular decline in the southern terms of trade. Drawing on these sources of inspiration, the paper sets out to study the dynamics of the terms of trade using a multi-sector growth model based on the principle of cumulative causation. The upshot is a North-South model of growth and trade in which the evolution of the terms of trade depends on differential rates of productivity growth in different sectors of the economy and in which terms of trade dynamics may not be the best guide as to whether or not there is an uneven development problem
The motivation for this paper stems from the steady decline in the share of consumer expenditures on goods produced in the global south, coupled with the (empirically ambiguous) Singer/Prebisch hypothesis that this can be explained by a secular decline in the southern terms of trade. Drawing on these sources of inspiration, the paper sets out to study the dynamics of the terms of trade using a multi-sector growth model based on the principle of cumulative causation. The upshot is a North-South model of growth and trade in which the evolution of the terms of trade depends on differential rates of productivity growth in different sectors of the economy and in which terms of trade dynamics may not be the best guide as to whether or not there is an uneven development problem
ISSN eletrônico: 18094538
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