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Primary-Product Price Instability and Export Instability in LDCs

  • Graham Bird

Abstract

It is often suggested that one of the main economic problems with which LDCs have to cope is instability in their export earnings. Export instability is felt to constitute a problem since it can affect a country’s domestic income, consumption, savings, investment, tax revenues, balance of payments, and, perhaps most significantly from the point of view of developing countries, capacity to import. Since imports are largely financed from export receipts, an export shortfall will have a direct impact on an LDCs ability to finance imports. Where imports are of a developmental nature, such as capital goods and fertilisers, and are not domestically substitutable, a shortfall in export earnings will tend to exert an adverse influence on development and growth. To the extent that export instability is unpredictable, at least to any precise degree, the uncertainties generated by it will impede efficient development planning.

Keywords

Price Elasticity Demand Curve Supply Curve Export Earning Export Sector 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Graham Bird 1982

Authors and Affiliations

  • Graham Bird
    • 1
  1. 1.University of SurreyUK

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