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
A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is


hi, how much does it cost for you guys to write a 5-6 pages on a article on supply and demand? However, on the 5-6 pages it wont all be writings..i need a few graphs. i would need


Define the returns to scale in production technology. Returns to scale in production technology: Assume that we are using some vector of inputs x to generate some output y a

(a) Suppose Scientists discover that eating soybeans prevents cancer and heart disease.

Problem 1: Any development strategy should put people first; indeed, its very effectiveness should be measured in terms of how it impacts the poor. (a) Describe the link bet

Measured cell emf are the basis for standard electrode potentials. chemistry assignments A method for the presentation of the data obtained from measurements of the equilibrium

Aggregate Demand When referred to in the circumstance of GNP or GDP, aggregate demand dealings the sum of what is spent by various parties in the United States for product and

Which of the following industries do you think are likely to exhibit large economies of scale? Explain why in each case. a. House building b. Electricity generation c. Market ga