Composition of trade, Microeconomics

Composition of Trade:

It is indicative of the structure and level of development of an economy. For instance, most of the UDCs depend for their export earnings on a few primary commodities (PCs); these countries export raw materials of agricultural origin and import manufactured industrial products, thus, denying themselves the benefits of value added. As an economy develops, its trade gets diversified. It no more remains depended on a few PCs. It begins to export more of manufactured industrial goods and import  industrial raw materials, capital equipment and technical know-how. 

Manufactured exports create greater value addition than PCs as they go through more stages of processing. The manufacturing sector has greater linkages with the rest of the economy and, hence, the downstream effect on exports from these sectors are likely to be greater than primary exports. 

The commodities entering trade could also be classified by various other criteria such as value added per unit of output, productivity of labour, capital intensity in production, the strength of backward and forward linkages, etc.  

The shifts in the commodity composition of trade in these categories would bring out the nature of structural changes in regard to income generation, employment effect and overall industrialisation through linkages effects, etc. The following questions need to be analysed in this regard: 

•  What is the degree of concentration in the composition of exports/imports? Has there been any change in the degree of concentration over time? 

•  Is there any shift in the shares of the primary products and manufactured products in the total export or import trade? 

Posted Date: 11/15/2012 12:17:54 AM | Location : United States







Related Discussions:- Composition of trade, Assignment Help, Ask Question on Composition of trade, Get Answer, Expert's Help, Composition of trade Discussions

Write discussion on Composition of trade
Your posts are moderated
Related Questions
In fall 2006, Pace University raised its annual tuition from $24,750 to $29,750. Freshman enrollment declined from 1500 in fall 2005 to 1110 in 2006. assuming the demand curve did

how can draw the table and diagram of production function function with one veriable

composite supply v/s joint supply

Consider the following: The city council has just approved the construction of a water park in your town. You are responsible for studying the impact of the new water park on the l


Which firm has the greatest minimum efficient scale?

what are the limitations of economies of scale?

The Short Run versus long Run - Short-run: Period of time in which the quantities of one or more production factors cannot be changed. These inputs are called as fi

Environmental pollution may be eloborate as the contamination of the environment, with harmful wastes arising mainly from human activities. All these activities release certain m

Is it true to say that inflation can only sustain with the increase in money supply?  Inflation can only be sustained if there is a persistent enhance in money supply. If there