Premium
THE IMPACT OF CHANGES IN TERMS OF TRADE ON A SYSTEM OF NATIONAL ACCOUNTS: AN ATTEMPTED SYNTHESIS *
Author(s) -
Kurabayashi Yoshimasa
Publication year - 1971
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1971.tb00781.x
Subject(s) - gdp deflator , economics , national accounts , rest (music) , productivity , production (economics) , relative price , constant (computer programming) , econometrics , terms of trade , measures of national income and output , total factor productivity , mathematical economics , macroeconomics , computer science , real gross domestic product , medicine , programming language , cardiology
The objective of this paper is to reformulate the terms of trade effect within a framework of national accounts in constant prices. The issue has been discussed by Professor R. C. Geary, Dr. G. Stuvel and others. In what follows the author proposes a new formula for deflating the net factor income from abroad and the net lending to the rest of the world. It is shown that the terms of trade effect which follows from the formula be expressed as a synthesis of Geary's and Stuvel's approaches. The author also shows that a similar approach be applied to the construction of the sector production account in constant prices. By formulating an appropriate deflator which is right for deflating factor incomes he concludes that the terms of trade arising from changes in inputs prices relative to output price be closely associated with the term which expresses the effect of productivity changes.