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This paper analyzes the impact that Terms Of Trade (TOT) are likely to have on the growth of the People's Republic of China's (PRC) neighboring countries. Two scenarios employing a dynamic computable general equilibrium framework are considered: a convergence scenario, where historical trends are projected; and a baseline scenario, where technological progress in the PRC is placed in line with that of the United States (US). The results show that the PRC's technological convergence leads to increased world prices for mining products, and lower world prices for manufactures, especially those exported extensively by the PRC. On the whole, however, the effects on the growth and TOT of the PRC's neighboring countries are relatively small.
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