Concentration in Primary Products and Terms of Trade

• Main Author: Gaughf, Ronald C.
• Format: Others
• Published: Digital Commons @ Butler University 1971
• Subjects: developing countries; international trade; distribution; Economics; Growth and Development; International Economics
• Online Access: http://digitalcommons.butler.edu/grtheses/280; http://digitalcommons.butler.edu/cgi/viewcontent.cgi?article=1279&context=grtheses

It is generally accepted that the less developed nations have suffered a long run deterioration of their terms of trade, which represents an indirect transfer of income to the developed nations.1 If true, the gains from international trade are being unequally distributed and the less developed nations have a legitimate complaint. They are very concerned about their terms of trade on the international scene because their trade gains provide for skills required for modernization. Raul Prebisch2 cited the Latin American nations as a classic example in the deterioration of the terms of trade. Most of these nations export heavily in "primary commodities" and spend a large percent of their monies on imports. If these nations maintain a quasi-monopoly position in the marketing of the above items, then the writeer questions whether or not an unfavorable trade relationship does exist.