Economic Effects of Commodity-Price Stabilisation
Several underdeveloped countries complain that their developmental efforts are severely hampered by persistent and violent fluctuations in international prices of their export products and that this phenomenon causes instability in export earnings, and hence, in the availability of foreign exchange, which is so vital for growth. There is a plethora of economic literature, which deals with whether or not the export earnings of the underdeveloped nations are substantially more unstable than those of the developed nations, whether this instability is the result of oscillations in prices or in export supplies of primary products, whether countries facing higher fluctuations in export earnings grow at a slower rate than countries with relatively steady export earnings, and a whole host of related questions.†
KeywordsNational Income General Equilibrium Model Price Stabilisation Export Earning Buffer Stock
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