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WORLD INCOME SHARES AND THE TERMS OF TRADE: A NORTH‐SOUTH GROWTH CYCLE
Author(s) -
Mainwaring Lynn
Publication year - 1989
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1989.tb00336.x
Subject(s) - economics , income shares , offset (computer science) , productivity , terms of trade , monetary economics , labour economics , macroeconomics , income distribution , inequality , mathematical analysis , mathematics , computer science , programming language
The trading relationship between a primary‐producing South and a manufacturing North has dynamic properties of conflict and symbiosis similar to those of the closed‐economy, worker‐capitalist relationship. In a simple model these dynamics may lead to cyclical behaviour involving two variables, the Southern share of world income and the rate of exploitation of primary producing capacity. The rate of change of the terms of trade is also cyclical. Long‐run income shares are constant, however, implying that the Southern terms of trade rise by just enough to offset productivity savings on primary inputs.