The terms of trade have a major impact on the share of world income corresponding to developing countries. Therefore, it is not surprising that they have insisted on placing it at the top of the international economic agenda. The purpose of this article is not to examine the policy aspects of the terms of trade problem. Instead, it focuses on the debate on the theory of the deterioration hypothesis and on the statistical evidence that corroborates this hypothesis. Then we ask whether the one-dimensional criterion of the terms of trade, as conventionally defined, can even in principle bear the burden imposed on it, and attempts are made to improve it by adding more dimensions to it.
Keywords:
Raúl Prebisch, Terms of Trade Deterioration Theory, Developing Countries, Economic Theory, International Trade
Spraos, J. (1983). El deterioro de la relación de intercambio : algunas perspectivas. Estudios Internacionales, 16(62), p. 255–280. https://doi.org/10.5354/0719-3769.1983.16116
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