Can globalisation stop the decline in commodities' terms of trade?

Mollick, Andre Varella and Faria, Joao Ricardo and Albuquerque, Pedro H. and Leon-Ledesma, Miguel A. (2008) Can globalisation stop the decline in commodities' terms of trade? Cambridge Journal of Economics, 32 (5). pp. 683-701. ISSN 0309-166X. (The full text of this publication is not available from this repository)

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Official URL
http://dx.doi.org/10.1093/cje/bem054

Abstract

In this paper we address the following question: would a fully integrated world economy eliminate the widely reported decline in the terms of trade of primary commodities? We address the question by looking at the terms of trade within the US (a highly integrated economy). Our findings show two results. First, US internal real commodities' terms of trade over the 1947-1998 period experienced slowly declining but significant trends. Second, once we control for the effect of US prices on international terms of trade, we find a long-run relationship between the US and international relative prices. These findings support the view that the decline of commodities' terms of trade bears no relationship with the process of globalisation. This seems to indicate that, if world terms of trade behaved as the US terms of trade, neither increased integration nor protectionist measures would eliminate this trend.

Item Type: Article
Uncontrolled keywords: economic integration; globalisation; Prebisch-Singer
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Maureen Cook
Date Deposited: 13 Jan 2010 13:52
Last Modified: 28 May 2014 14:21
Resource URI: http://kar.kent.ac.uk/id/eprint/15537 (The current URI for this page, for reference purposes)
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