The Determination of the Terms of Trade

Ali M. El-Agraa
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Ali M. El-Agraa: University of Leeds

Chapter 5 in International Trade, 1989, pp 63-89 from Palgrave Macmillan

Abstract: Abstract The discussion of the gains from international trading in Chapter 4 was rather limited since it established only in an arbitrary way how the international price ratio, t i , is determined. It will be remembered that the country under consideration was assumed to be so small that its actions exerted no influence on the international economy. However, when countries are not small they play an active role in determining the international supply of and demand for traded goods. It is then no longer justifiable to assume that t i is given or exogenously determined: t i has to be determined inside the system, or endogenously. The aim of this chapter is to show how this is achieved.

Keywords: Relative Price; Excess Demand; Excess Supply; Food Export; Community Satisfaction (search for similar items in EconPapers)
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-10206-8_5

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DOI: 10.1007/978-1-349-10206-8_5

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