Rising manufacture exports and terms of trade: the case study of Korea

Abstract

This study observed rapidly rising shares of manufactured and electronic goods in Korea’s total exports and a trend decline in Korea’s terms of trade over the period of this study (1967-2001), in accordance with the Prebisch-Singer hypothesis. Contrary to the expectation of Prebisch, the increasing proportion of manufactured and electronic goods in Korea’s exports exerted no favourable influence on the course of Korea’s terms of trade. In fact, this study supports the later extension to the Prebisch-Singer hypothesis, that rather than an emphasis on relations between types of commodities there should be an emphasis on relations between types of countries.

Keywords

Korea Prebisch-Singer hypothesis terms of trade

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