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Terms of Trade Indices in the Presence of Re‐Export Trade

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  • P. J. LLOYD
  • R. J. SANDILANDS

Abstract

This paper shows how the index of the commodity terms of trade as ordinarily constructed should be adjusted to take account of re‐exports in the broad sense of the use of intermediate inputs in export activities which had been imported. The neglect of this adjustment produces indices which generally overstate the movement of the terms of trade. An empirical study of Singapore suggests that the bias may be substantial.

Suggested Citation

  • P. J. Lloyd & R. J. Sandilands, 1985. "Terms of Trade Indices in the Presence of Re‐Export Trade," The Economic Record, The Economic Society of Australia, vol. 61(3), pages 667-673, September.
  • Handle: RePEc:bla:ecorec:v:61:y:1985:i:3:p:667-673
    DOI: 10.1111/j.1475-4932.1985.tb02021.x
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    1. repec:bla:ecorec:v:45:y:1969:i:110:p:288-90 is not listed on IDEAS
    2. S. H. Ng, 1969. "The Terms of Trade in the Case of Entrepôt Trade," The Economic Record, The Economic Society of Australia, vol. 45(2), pages 288-290, June.
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