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Commodity terms of trade and individual countries' net barter terms of trade: Is there an empirical relationship?
Author(s) -
Lutz Matthias G.
Publication year - 1999
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/(sici)1099-1328(199909/10)11:6<859::aid-jid632>3.0.co;2-h
Subject(s) - barter , economics , commodity , terms of trade , developing country , index (typography) , sample (material) , international economics , balance of trade , econometrics , international trade , macroeconomics , chemistry , chromatography , world wide web , computer science , market economy , economic growth
This paper examines the statistical relationship between aggregate commodity terms of trade and the net barter terms of trade of 66 non‐oil developing countries. Stationarity of the estimated long‐run equation is tested for each country using Engle–Granger ADF tests. Four different commodity terms of trade series are examined. For more than half the sample a stationary long‐run relationship is detected. The responsiveness of the country terms of trade to the overall index varies considerably between countries. These findings suggest that the long‐term trend in the overall terms of trade is still relevant to developing countries today. Copyright © 1999 John Wiley & Sons, Ltd.