Wikipedia Commons Like Wallerstein, Dependency Theory emerged in Latin America which argued that world trading system benefited only advanced capitalists' economies. Often the Terms of Trade favored these countries over the least developing countries (LDCs). Terms of Trade = Export Prices / Import Prices LDC economies depend upon export of raw materials and agricultural commodities. And they import finished products from developed countries. As the commodity prices rise slowly but manufactured product prices rise sharply, the terms of trade would deteriorate for LDCs unless their exports rise faster than the imports. The global trade is done mostly by corporate subsidiaries thus commodity prices are not exposed to market. These giant corporations often secure the deal with long term agreements, thus even though commodity prices might have rose but they would pay what was agreed in the agreement. They also have sophisticated accounting devices which enable them to avoi...
Find minimal advice to get help in study, life, job, money and much more. The website helps to make you understand complex concepts in a lucid manner. I am sharing my personal study notes and life advices on money and life in general.
Comments
Post a Comment