The New Terms of Trade Problem: Economic Rents in International Exchange

  • C. W. Reynolds


The Post-OPEC petroleum economy permits one to apply Professor Rostow’s leading and lagging sectors approach to growth at the global level. He saw the process of economic change as one of overlapping patterns of sectoral growth, in which some industries led while others lagged.1 When leading sectors moved forward in a group, as during the epoch of British textile and steam power development at the beginning of the nineteenth century, their yields permitted new levels of accumulation. Entrepreneurs were then enabled to acquire financial capital and invest in lagging sectors in response to the opportunities provided by induced demand and technological change. The process of progressive alteration of values by market forces and government policy, generating a succession of sectoral surpluses, was seen by Rostow, in the great Schumpeterian tradition, to be essential to sustained economic growth. This paper examines the effect of recent improvements in the energy terms of trade on the pattern of international economic rents. It raises questions about the role of these changes, including the inducement of energy import-competing sectors, for the development of rich, poor, and middle-income countries.


Industrial Country Resource Rent Wage Bill Economic Rent World Development Report 
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.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Business Week, 1980, selected issues.Google Scholar
  2. International Bank for Reconstruction and Development (World Bank), World Bank Atlas, 1974; 1978, Washington DC.Google Scholar
  3. Kindleberger, C. P. Economic Development, (New York: McGraw-Hill, 1958).Google Scholar
  4. Kuznets, Simon, Modern Economic Growth, (New Haven: Yale University Press, 1966).Google Scholar
  5. Mamalakis, Markos and C. W. Reynolds (eds), Essays on the Chilean Economy (Homewood, Illinois: Irwin, 1965).Google Scholar
  6. Prebisch, Raul, ‘The Economic Development of Latin America and Its Principal Problems’, Economic Bulletin for Latin America, vol. VII (Feb 1962) no. 1.Google Scholar
  7. Reynolds, C. W. ‘Domestic Consequences of Export Instability’, American Economic Review (May 1963) pp. 93–102.Google Scholar
  8. Reynolds, Lloyd G., Image and Reality in Economic Development, (New Haven: Yale University Press 1977).Google Scholar
  9. Rostow, W. W., The World Economy. History and Prospect (Austin: University of Texas Press, 1978).CrossRefGoogle Scholar
  10. Rostow, W. W., ‘Trends in the Allocation of Resources in Secular Growth’, in Leon H. Dupriez (ed.), Economic Progress, (Louvain: International Economic Association, 1955).Google Scholar
  11. Schumpeter, Joseph A., The Theory of Economic Development (Cambridge: Harvard University Press, 1955).Google Scholar
  12. Singer, H. W., ‘The Distribution of Gains between Investing and Borrowing Countries’, American Economic Review (May 1950).Google Scholar
  13. Singer, H. W., ‘The Distribution of Gains from Trade and Investment — Revisited’, Journal of Development Studies (Oct 1975).Google Scholar
  14. United Nations Statistical Office, Statistical Yearbook (New York, 1977).Google Scholar
  15. United Nations Statistical Office, Yearbook of National Accounts Statistics, vol. 1, (New York, 1979).Google Scholar
  16. World Bank, World Development Report, 1979, (Washington DC: Oxford University Press, 1979).CrossRefGoogle Scholar

Copyright information

© Charles P. Kindleberger and Guido di Tella 1982

Authors and Affiliations

  • C. W. Reynolds

There are no affiliations available

Personalised recommendations