The increased production of export good requires the diversion of productive resources from other sectors to the export sector. The amount of utility lost or sacrificed per unit of resources employed in the production of export good constitutes the real cost of producing exports. Whether a country gains from trade or not, can be truly measured if the real costs [...]
The concept of income terms of trade attempted — a correction in the net barter terms of trade for changes in the volume of exports. Jacob Viner made another modification over the net barter or commodity terms of trade. He corrected the commodity terms of trade for changes in factor productivity in the production of export goods. The concept of [...]
The concept of double factoral terms of trade, formulated by Jacob Viner takes into account the change in factor productivity both in the domestic export industries and export industries of the foreign countries. This concept can be expressed as: TD = TC . (ZX/ZM) Here TD is the double factoral terms of trade, TC is the commodity terms of trade, [...]