Composition of trade, Microeconomics

Assignment Help:

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? 


Related Discussions:- Composition of trade

Monopsony, what are the pros and cons of monopsony

what are the pros and cons of monopsony

What is the benefit from the existence of monopolies, Explain how consumers...

Explain how consumers might benefit from the existence of monopolies. While the standard issue of monopolies having higher prices and lower output that competitive markets migh

Calculate price and average total cost atc, 1. Through graphs describe the ...

1. Through graphs describe the relationship between the price, P , and the average total cost, ATC , for a firm in perfect competition when it earns an economic profit; earns a n

Organization becoming too large to effectively manage, Economies of scale a...

Economies of scale are advantages obtained from a company becoming large and diseconomies of scale are additional costs inflicted because a firm has become very large.  The causes

Analyze the economic factors, Question 1: Using relevant examples to il...

Question 1: Using relevant examples to illustrate your arguments analyze the different economic impacts of tourism and discuss the different ways in which government can maximi

Cost theory, What are the economies and diseconomics of scale?

What are the economies and diseconomics of scale?

Neer vs reer, NEER Vs REER: In a situation where there are multiple tr...

NEER Vs REER: In a situation where there are multiple trade partners, the effect of cross-currency movements are judged by nominal effective exchange rate (NEER) and real effe

Real estate development and process, Answer the following question Focus on...

Answer the following question Focus on Real Estate Development Normal 0 false false false EN-IN X-NONE X-NONE

Applications, hey, I just have a question on how to apply things like ATC a...

hey, I just have a question on how to apply things like ATC and AVC in a problem. im just not too sure about what happens to the quantity of a particular good when asked. this is p

Chamberline approach, a more simple explanation of the group equilibrium in...

a more simple explanation of the group equilibrium in the short and long run

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd