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The Terms of Trade and Economic Growth in the Periphery 1870-1938

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  • Christopher Blattman
  • Jason Hwang
  • Jeffrey G. Williamson

Abstract

The contending fundamental determinants of growth -- institutions, geography and culture --exhibit far more persistence than do the growth rates they are supposed to explain. So, what exogenous shocks might account for the variance around those persistent fundamentals? The terms of trade seems to be one good place to look. Using a panel data base for 35 countries, this paper estimates the impact of terms of trade volatility and secular change between 1870 and 1938. We find that volatility was much more important than secular change. Additionally, both effects were asymmetric between core and periphery, findings that speak directly to the terms of trade debates that have raged since Prebisch and Singer wrote more than 50 years ago.

Suggested Citation

  • Christopher Blattman & Jason Hwang & Jeffrey G. Williamson, 2003. "The Terms of Trade and Economic Growth in the Periphery 1870-1938," NBER Working Papers 9940, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9940
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    Cited by:

    1. Josef Falkinger & Volker Grossmann, 2005. "Institutions and Development: The Interaction Between Trade Regime and Political System," Journal of Economic Growth, Springer, vol. 10(3), pages 231-272, September.
    2. Yoshiaki Sugimoto, 2006. "Endogenous Trade Policy: Political Struggle in the Growth Process," ISER Discussion Paper 0678, Institute of Social and Economic Research, Osaka University.
    3. Marc Badia†Miró & Anna Carreras†Marín & Christopher M. Meissner, 2018. "Geography, policy, or productivity? Regional trade in five South American countries, 1910–50," Economic History Review, Economic History Society, vol. 71(1), pages 236-266, February.
    4. Syed Jawaid & Abdul Waheed, 2011. "Effects of Terms of Trade and its Volatility on Economic Growth: A Cross Country Empirical Investigation," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(2), pages 217-229, December.
    5. Blaise Gnimassoun & John C. Anyanwu, 2019. "The Diaspora and economic development in Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(4), pages 785-817, November.
    6. Khalil Jebran & Amjad Iqbal & Zia Ur Rehman Rao & Arshad Ali, 2018. "Effects of Terms of Trade on Economic Growth of Pakistan," Foreign Trade Review, , vol. 53(1), pages 1-11, February.
    7. Zouheir Abida, 2011. "Real Exchange Rate Misalignment and Economic Growth: An Empirical Study for the Maghreb Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 45-61, July.
    8. Luis A. V. Catão, 2007. "Sudden Stops and Currency Drops: A Historical Look," NBER Chapters, in: The Decline of Latin American Economies: Growth, Institutions, and Crises, pages 243-290, National Bureau of Economic Research, Inc.
    9. Mr. Luis Catão & Sandeep Kapur, 2004. "Missing Link: Volatility and the Debt Intolerance Paradox," IMF Working Papers 2004/051, International Monetary Fund.
    10. Atrayee Ghosh Roy & Hendrik Van den Berg, 2009. "Budget deficits and U.S. economic growth," Economics Bulletin, AccessEcon, vol. 29(4), pages 3015-3030.
    11. Blaise Gnimassoun & C. John Anyanwu, 2018. "The Diaspora And Economic Development In Africa," Working Papers hal-04141793, HAL.
    12. Trofimov, Ivan D., 2018. "Income terms of trade and economic convergence: Evidence from Latin America," MPRA Paper 87598, University Library of Munich, Germany.
    13. Pierre JACQUET & Alexis ATLANI & Marwan LISSER, 2017. "Policy responses to terms of trade shocks," Working Papers P205, FERDI.
    14. Gulzar Ali & Zhaohua Li, 2017. "An Empirical Investigation on the Role of exports, imports and its Determinants in Foreign Trade of Pakistan," Information Management and Business Review, AMH International, vol. 8(6), pages 39-58.
    15. Serge Coulombe, 2007. "Globalization and Regional Disparity: A Canadian Case Study," Regional Studies, Taylor & Francis Journals, vol. 41(1), pages 1-17.
    16. Pierre JACQUET & Alexis ATLANI & Marwan LISSER, 2017. "Policy responses to terms of trade shocks," Working Papers P205, FERDI.
    17. Blaise Gnimassoun & John Anyanwu, 2019. "Working Paper 308 - The Diaspora and Economic Development in Africa," Working Paper Series 2434, African Development Bank.
    18. Piotr Misztal, 2012. "Terms of Trade and Economic Growth in Poland in the period 1980-2009," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(45), pages 51-67, December.
    19. Nabila Khurshid & Asma Fiaz & Jamila Khurshid, 2020. "Analyzing the Impact of Gender Inequality on Economic Development in Pakistan: ARDL Bound Test Cointegration Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 10(4), pages 264-270.

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    JEL classification:

    • F1 - International Economics - - Trade
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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