Coping with terms-of-trade shocks in developing countries

Christian Broda and Cédric Tille

Current Issues in Economics and Finance, 2003, vol. 9, issue Nov

Abstract: Sharp swings in a developing country's terms of trade, the price of its exports relative to the price of its imports, can seriously disrupt output growth. An analysis of the effects of a decline in export prices in seventy-five developing economies suggests that countries with a flexible exchange rate will experience a much milder contraction in output than their counterparts with fixed exchange rate regimes.

Keywords: International trade; Exports; Imports; Developing countries; Prices; Foreign exchange rates; Gross domestic product (search for similar items in EconPapers)
Date: 2003
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