The secular deterioration in the terms of trade of the developing countries has occurred on account of the following reasons: 1. Absence of Qualitative Improvement of Products 2. Distribution of Gains from Technical Progress 3. Immiserizing Growth 4. Low Income Elasticity of Demand 5. Impact of Import on the Import- Competing Industries 6. Large Surpluses of Farm Products and a [...]
The concept of income terms of trade was developed by G.S. Dorrance and H. Staehle. This concept is an improvement upon the net barter terms of trade. It takes into account the indices of export and import prices and quantity index of exports. The income terms of trade are determined by the product of net barter terms of trade and [...]
In this article we will discuss about the net barter terms of trade with its criticisms. In the contemporary world, the concept of net barter terms of trade was introduced by F.W. Taussig. This concept was called as commodity terms of trade by Jacob Viner. It is defined as ratio of export prices to import prices. It can be expressed [...]