Sarkar-Singer Hypothesis Essay -- International Trade

Sarkar-Singer HypothesisIntroductionSince terms of trade deterioration hypothesis was proposed by Prebisch and Singer in 1950, comparative advantage was doubted. Due to the export structure of developing countries (DCs) is rule by primary coil products, and the export structure of industrialised countries (ICs) dominated by manufactured products they compared primary products export of DCs and manufactured products export of ICs, and indicated that the terms of trade trend to deteriorate over time. This hypothesis is supported by many studies, such as Grilli and Yang (1998) and Spraos (1980) and so the widening gap like existed.This hypothesis is confronted the traditional view, international trade and specialisation may not be better off. The Prebisch-Singer hypothesis also impacts on the trade policy of the majority of DCs to become inward looking. However, many studies appeal that the defected of Prebisch-Singer hypothesis, Sarkar and Singer analysis is the important appeal. Du e to Singer (1958) views that the export structure of the DCs was dominated by primary products export structure of the ICs by the manufactured products. Therefore, theearly studies use the terms of trade between primary products and manufactures as a proxy.Sarkar (1986) express that the result of manufactured sectors, however, Singer (1987) proposes that even the change in the commodity composition of exports, the disadvantages in DCs lead the deterioration be continuous. Sarkar and Singer (1991) focuses on this subject, examines the impact of the respite in the commodity composition of exports of DCs. They proposed that the changes in commodity composition of exports are the important factor, as the primary sectors of DCs have a lower rat... ...ent, Vol. 19, No. 4, knave 333-340Singer, H. W. (1950) The distribution of gains between investing and borrowing countries, American Economic Review, Vol. 40, No. 2, Page 473-485Singer, H. W. (1958) Comment, Review of Economics and Stat istics, Vol. 40, Page87-88Singer, H. W. (1987) Terms of trade in John Eatwell, Murray Milgate and peckerwood Newman (Eds), The New Palgrave A Dictionary of Economics, London Macmillan, Page 626-628Singer H. W. (1998) The Terms of Trade Fifty Years Later Convergence and Divergence, The South Letter (30)Sproas, J. (1980) The statistical Debate on the Net Barter Terms of Trade Between Primary Commodities and Manufactures, Economic Journal, Vol. 90, Page 107-128United Nations Conference on Trade and using (2005) Trade and Development Report Chapter III Evolution of the Terms of Trade and its Impact on Developing Countries