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Impact of Terms of Trade on GDP in the Context of Prebisch–Singer Theorem: Evidence from Egypt and Guinea

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  • Ranjan Aneja

    (Central University of Haryana)

  • Arjun

    (Visvesvaraya National Institute of Technology)

Abstract

This study investigates the relationship between the Net Barter terms of trade and GDP of two African countries namely Egypt and Guinea along with seeking to validate the Prebisch–Singer hypothesis. To analysis the effects, the study has taken the data ranging from 1990 to 2019. To examine the relationship between Net Barter Terms of Trade and GDP, autoregressive distributed lag model (ARDL) have been employed. The findings of the study concludes that there exists a co-integration amid terms of trade and economic growth in the economy of Egypt, but Guinea remained out from the co-integration. The study also shows that there is a long-run and short-run relationship between the GDP and Terms of trade alone in Egypt with a comparative disadvantage in the terms of trade of a primary sector-oriented economy. Thus, the study partially validates the Prebisch–Singer hypothesis.

Suggested Citation

  • Ranjan Aneja & Arjun, 2022. "Impact of Terms of Trade on GDP in the Context of Prebisch–Singer Theorem: Evidence from Egypt and Guinea," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2561-2575, October.
    • Handle: RePEc:pal:eurjdr:v:34:y:2022:i:5:d:10.1057_s41287-021-00478-x
    DOI: 10.1057/s41287-021-00478-x
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