Working Paper: NBER ID: w9940
Authors: Christopher Blattman; Jason Hwang; Jeffrey G. Williamson
Abstract: The contending fundamental determinants of growth -- institutions, geography and culture --exhibit far more persistence than do the growth rates they are supposed to explain. So, what exogenous shocks might account for the variance around those persistent fundamentals? The terms of trade seems to be one good place to look. Using a panel data base for 35 countries, this paper estimates the impact of terms of trade volatility and secular change between 1870 and 1938. We find that volatility was much more important than secular change. Additionally, both effects were asymmetric between core and periphery, findings that speak directly to the terms of trade debates that have raged since Prebisch and Singer wrote more than 50 years ago.
Keywords: No keywords provided
JEL Codes: F1; N10; O1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| terms of trade volatility (F14) | GDP per capita growth rates in peripheral countries (O52) |
| terms of trade volatility (F14) | GDP per capita growth rates in core countries (O52) |
| secular improvements in terms of trade (F19) | GDP per capita growth rates (O47) |
| natural resource dependence (Q37) | GDP per capita growth rates (O47) |
| terms of trade behavior (F14) | GDP per capita growth rates (O47) |