 Economic Development and Endogenous Terms-of-Trade Determination: Review and Reinterpretation of the Prebisch-Singer ThesisMPRA Paper from University Library of Munich, Germany Abstract: In this paper the theoretical literature relating to the Prebisch-Singer Thesis and economic development is extensively reviewed. The aim is to examine models which exhibit a positive relation between indicators of economic development, such as per capita income, real wages, or employment and terms of trade development. In many models the economy is better off when terms of trade fall and income and price elasticities do not appear in the growth rate solutions. As this is at variance with the Prebisch-Singer Thesis, two simple models have been developed: (i) in a vent-for-surplus model, income and price elasticities appear in the solution for employment, but the terms of trade are driven down by the factors that increase employment; (ii) in a model with exogenous employment and imported capital goods, higher income elasticities of export demand increase in the long run growth rates of real wages, per capital income, capital-labour ratio and terms of trade, thus representing the ideas of Prebisch, Singer and Myrdal on the relation between exports and growth. Keywords: Prebisch-Singer Thesis; terms of trade; growth; development. (search for similar items in EconPapers) Published in Unctad Review (1995): pp. 17-33 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54864 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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