Economics, Econometrics and Finance
8 years ago

Fast-growing countries can improve terms of trade through quality upgrades.

THE REAL-SIDE DETERMINANTS OF COUNTRIES' TERMS OF TRADE
Peter Debaere, Minsoo Lee

Paper Summary

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Countries' terms of trade are influenced by factors like factor accumulation and market demand. Fast-growing countries may see their terms of trade worsen, but improving quality and variety of output can help offset this. Per capita GDP and R&D play a role in determining terms of trade. Big countries have more control over their terms of trade.