Terms of Trade and Welfare for a Developing Economy with an Imperfectly Competitive Sector

Review of Development Economics

Posted: 11 Jul 1997

See all articles by Partha Sen

Partha Sen

University of Delhi - School of Economics; National Bureau of Economic Research (NBER)

Abstract

The effect of terms of trade economy on the welfare of a small open economy is analyzed. It exports a homogeneous good and imports some brands of the differentiated good. It also produces some brands of the differentiated good which are not traded. A term of trade deterioration causes resources to move to the non-traded, import-competing sector. The economy's income rises and the price index for the differentiated good falls, resulting in higher welfare. This accords well with the experience of developing economies of East and Southeast Asia.

JEL Classification: F0, F2, F4

Suggested Citation

Sen, Partha, Terms of Trade and Welfare for a Developing Economy with an Imperfectly Competitive Sector. Review of Development Economics, Available at SSRN: https://ssrn.com/abstract=41982

Partha Sen (Contact Author)

University of Delhi - School of Economics ( email )

110007 Delhi
India
+91 11 725 7159 (Phone)
+91 11 725 7159 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
678
PlumX Metrics