Скачать или смотреть DE II Module 47

The main learning objective are –
a. the connection between colonialism, trade during colonial era and divergence among countries – i.e., increasing gap of per-capita income between colonizing nation and colonized nation (focussing mainly on India and China);
b. the second objective is to discuss how for structural reasons developing countries lose out in the long run if they involve themselves in free-trade with developed nations simply because of the production pattern that characterizes these two types of countries. And this leads to an increasing gap or inequality between trading countries – to be more specific countries in the ‘core’ and ‘periphery’.
History tells us that countries such as India and China were not lagging behind always. Trade with the British changed the production pattern and subsequently affected industrial performances of these countries and led to increasing divergence.
Prebisch-Singer hypothesis argues that due to various structural reasons and more specifically for the typical production patterns that characterize the developing and developed differently, developing countries have failed to benefit from the technical progress and have suffered from the declining terms of trade. According to Prebisch and Singer, in contrast to the classical argument about gains from trade, the relative price of primary goods actually falls and this has been empirically seen in the case of the United Kingdom from 1876 to 1947. This was shown by Hans Singer, then working in the United Nations Department of Economic Affairs in New York City, in his paper titled "Post-war Price Relations between Under-developed and Industrialized Countries". Its subsequent follow-up by the United Nations in 1949 led actually to the origin of the Prebisch-Singer hypothesis and the related debate. It was observed in these reports that during the sixty years preceding 1938 primary product prices had fallen relative to prices of manufactures.