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- Title
Trade in Intermediates and the Colonial Pattern of Trade.
- Authors
Marjit, Sugata
- Abstract
This paper builds up a model of trade in intermediate goods and uses it to analyze certain features of the colonial pattern of trade. Different parts of an intermediate good are traded between two nations and the intermediate good is then used to make two country-specific products. I discuss the effects of technical progress in different sections of the productive spectrum on factoral terms of trade and allocation of resources in each country. In a three-country, two-good colonial world it is shown that immiserization can occur even with given commodity terms of trade. <BR> In this paper I have focused on trade in intermediate goods and the colonial pattern of trade. Most underdeveloped countries can be characterized by elements of colonial trade. I have used some well established models of trade to discuss growth, welfare and technical progress in the peripheries of a colonial world. Section I concentrated on building up a model of trade in intermediates where the machine is produced with a continuum of parts. The relatively low-wage country in this framework will produce more parts of the machine. These parts may or may not be consecutive ones. This suggests that a low-wage economy may also produce the higher stages of the productive spectrum. In Section II I described a three-country model of colonial trade. The unifying link between the two sections is the nature of the production process that initially characterizes the production of the intermediate good in Section I.
- Subjects
TERMS of trade; INTERMEDIATE goods; COMMERCIAL products; ECONOMIC policy; TECHNOLOGICAL progress; MANUFACTURED products
- Publication
Economica, 1987, Vol 54, Issue 214, p173
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2554389