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.
Résumé
Cette étude examine la relation entre les termes nets de l'échange et le PIB de deux pays africains, l'Égypte et la Guinée, tout en cherchant à valider l'hypothèse de Prebisch-Singer. Pour analyser les effets, l'étude s’est appuyée sur des données allant de 1990 à 2019. Pour examiner la relation entre les termes nets de l'échange et le PIB, nous avons utilize un modèle autorégressif à retards échelonnés. Au vu des résultats obtenus, l'étude conclut qu'il existe, dans l'économie égyptienne, une co-intégration entre termes de l'échange et croissance économique. En Guinée, cette co-intégration n’a pas lieu. L'étude montre également qu'il existe une relation à long terme et à court terme entre le PIB et les termes de l'échange en Égypte, avec un désavantage comparatif au niveau des termes de l'échange d'une économie axée sur le secteur primaire. Ainsi, l'étude valide partiellement l'hypothèse de Prebisch-Singer.
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Notes
As per the World Bank data Catalog, net barter terms of trade index value (NBTT) is the ratio of the export unit value to import unit value, in per cent and it’s measured by the relative to the base year 2000.https://datacatalog.worldbank.org/net-barter-terms-trade-index-2000-100-0#:~:text=Net%20barter%20terms%20of%20trade%20index%20is%20calculated%20as%20the,to%20the%20base%20year%202000.
http://datatopics.worldbank.org/world-development-indicators/#:~:text=World%20Development%20Indicators%20(WDI)%20is,country%20comparable%20data%20on%20development.&text=The%20World%20Development%20Indicators%20is,and%20the%20fight%20against%20poverty, and https://databank.worldbank.org/source/world-development-indicators.
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Aneja, R., Arjun Impact of Terms of Trade on GDP in the Context of Prebisch–Singer Theorem: Evidence from Egypt and Guinea. Eur J Dev Res 34, 2561–2575 (2022). https://doi.org/10.1057/s41287-021-00478-x
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DOI: https://doi.org/10.1057/s41287-021-00478-x