Trade Development Chapter With ToT

Trade & Development
“MASS OF COMMODITIES" AND "SUM OF

ENJOYMENTS”
RICARDO & MALTHUS
BITS Pilani, K K Birla Goa Campus

Focus Areas
Why Trade?
Trade & Development – Does it Happen?
Nature of Trade Complexities in Developed vs.
Developing Economies
Trade Driven Welfare Gain
Free Trade vs. Protected Trade

The world’s poorest countries – the 49 least developed countries – have not shared in the
growth of world trade. The 646m people in the top exporting countries - the US, Germany,
Japan, France and UK - have 100 times more trade than their poor counterparts.
Mercantile Idea
 Mainly Great Britain, France, the Netherlands,

Portugal and Spain used mercantilism during the Meaning-
1500s to the late 1700s.
World Wealth
 Mercantilist countries practiced the so-called zero- was limited &
sum game.
countries only
 The economic development was prevented when the could increase
mercantilist countries paid the colonies little for their share at
export and charged them high price for import.
the expense of
 The main problem with mercantilism is that all neighbors.
countries engaged in export but was restricted from
import - prevention from development of
international trade.
Mercantilism maintained that-
 Wealth of a Nation is measured by its holdings Gold / Silver & Precious

Metals.
 It was more export oriented than import oriented.
 Proposed that the countries maximize the difference between Exports &
Imports by promoting Export & Discouraging Imports.
 BOP was Export favorable in terms of gold / silver holdings.

Limitations of Mercantilism-
1- It confused National wealth with that of king’s wealth.
2- Neglected other economic attributes like Human

Resource / Skills / Domestic Trade potentials etc. in favour of Export
oriented industries.
3- Excessive Export causes price rise of the product.
4- promotes economic protectionism.
Vacuum of the
Leads to Import of Leads to
Ex. Export product in domestic
the same goods price rise
Market

Adam Smith
David Ricardo
Alfred Marshall
Absolute Advantage F Y Edge Worth
Theory John Stuart Mill
Are the Classical Economists –

School of Thought of Free Trade.

Adam Smith in his book – “An
inquiry into the Nature and Causes
of the Wealth of Nations” (1776)-
 Criticized the intellectual basis of

Classical
mercantilism
Theory of Int. &
Trade.  Demonstrated that Mercantilism- ---
 Weakens the economy by providing

protection to domestic industries.

Argues that-
 Subsidized domestic Industries

use up tax payer money
 Mercantilism
therefore is not a
long term  Cause export orientation which
sustainable causes price rise & inflation of
economic planning the product.
philosophy.
 Finally it leads to import which
will lead to export of money to
foreign countries.
Absolute Advantage – Idea!
Adam Smith argued that it is Adam Smith’s Proposal
impossible for all nations to  Instead, proposed that all
become rich simultaneously by nations would gain
following mercantilism.
simultaneously if they
practiced free trade &
 This is possible because, the
export of one nation is another specialized in accordance
nation’s import. with their absolute
advantage.
 Smith also stated that the
wealth of nations depends Wealth of Nations are
upon the goods and services not limited but can be
available to their citizens, created through the
rather than their gold reserves. employment of K & L

 A country is said to be more
productive if it can produce
more goods (output) for a
given quantity of input like Wealth Can be
labor or energy / capital etc. Created through
strategic factor of
 Where ever there is absolute K&L
Advantage of any Factor of
Production, that becomes the
means to Export.

Operation
 While there are possible gains from trade, with absolute
advantage, the gains may not be mutually beneficial.
Country Computer Number of Finding
Prod. Per Hr. Employees
Japan 10 03 Abs. Advantage
Australia 05 03
Japan has Abs. Adv. On computer production &

shall Export the product

Example- Limitations
 More Emphasized on
 Capitalist Countries – Supply Chain of Factor
Capital Export
of Production
 Labour Excess Countries –  Hence, any change in
Labour Export
the supply conditions
 Land Advantage
Countries – Agri. Exports
altered the trade
pattern it self.
 Demand conditions
are equally important.
 Since absolute advantage is determined by a simple comparison
of labor productivities, it is possible for a country to have no
absolute advantage in anything.
 In that case, according to the theory of absolute advantage, no

trade will occur with the other party.
 It can be contrasted with the concept of comparative advantage

which refers to the ability to produce a particular good at a
lower opportunity cost.

Limitations-
• This is more supply centric
• Skill / Technology etc. not factored.
• Tourism / Education as products can not be exported.
• Great limitation on trade.

Comparative Advantage Theory
David Ricardo

 David Ricardo extended the Absolute country Textile Rubber Total Trade
Advantage Model to propose India 80 20 100
Comparative Advantage Model in
Malaysia 20 40 60
1817.
100 60 160
 Proposed that trade still can be

possible with only Comparative
Advantage of factor of Production. Country Textile Rubber Total Trade
India 80+80 00 160
 Core Competency Provides Malaysia 00 40+40 80

advantage to export. 160 80 240
 Example-
 India – Malaysia Trade Example
 It remains a major influence on much of international trade
policy and is therefore important in understanding the modern
global economy.
 The principle of comparative advantage states that a country

should specialize in producing and exporting those products in
which it has a comparative, or relative cost advantage compared
with other countries.
 And should import those goods in which it has a comparative

disadvantage.
 Out of such specialization, it is argued, will accrue greater benefit

for all.
 In this theory there are several assumptions that limit the real-
world application.
 The assumption that countries are driven only by the

maximization of production and consumption, and not by issues
out of concern for workers or consumers is a mistake.

Limitations of the Theory
 Transport costs may outweigh any comparative

advantage
 Increased specialization may lead to diseconomies of
scale
 Governments may restrict trade.
 Comparative advantage measures static advantage but
not any dynamic advantage for example in the future
India could become good at producing books if it made
the necessary investment
Summary
Other Theories
 Factor Endowment Theory

Comparative Advantage  Trade Creation & Trade
Model Most Prevalent Diversion Models
 National Competitive
Advantage Theory
 Strategic Rivalry Theory
Etc.

IMF Trade Direction LAC
Trade Direction China
IMF Data
Japan Trade Direction
Africa Trade Direction
USA Trade Direction
Europe Trade Direction
Free Trade Agreement Areas
Prominent Trade Blocks
Trade Blocks
1996 Int. Trade Position

It can be of multiple formats with varying
degree of Free Trade Scope & Quality
Types of Free Trade Instruments

FTAs
PTAs

Monetary Unions

Customs Unions

Regional Trade Blocks

World Trade Blocks are
a major theme of
Economic Globalization
Today

ISI to Trade Blocks
International
Trade Idea!

Trade Creation/ Trade Diversion Vs.
Terms of Trade
1950s
Idea
Intellectual Basis? 1. F.W. Taussig; G.S. Dorrance et al
talked of TOT
 Jacob Viner;James Mead; Richard G.
2. Using Gross Barter/ Net &
Lipsey; Kelvin Lancaster et al talked
Income TOT to compute whether
of – India has benefitted out of REPs
or not
 Trade Creation: TC &
 Trade Diversion: TD
 Customs Union
 Theory of 2nd Best

Why Trade & Why International
Trade?
Idea of Welfare Gain?

Free Trade vs. Protected Trade
Trade Computation Method
1. G = Mq ÷ Xq * 100 =
G = Gross Barter TOT
Import Quantity of that Year ÷ Imp G
N = Net Barter TOT
Price Index ÷ Export Quantity of that N
I = Income TOT
Year ÷ Export Price Index × 100 S = Single Factorial TOT I
D = Double Factorial TOT D
R = Real Cost TOT
2. N= Xp/Mp X 100 i.e. Export Price U = Utility TOT
Index divided by Import Price Index
Multiplied by 100 Ricardo’s Comparative
Advantage Model
3. I= NXq ( India’s N remains constant
for all countries). Hence it will be N These calculations shall
Multiplied by Export Quantity of provide the real time Terms of
that year divided by Export Price of Trade of any given country
that Year.
Terms of Trade Calculation
Gross Barter ToT Net Barter ToT
G= Mq/Xq x 100.  N=Xp ÷ Mp x 100 or
 N= Only Export Price Index ÷ Only
 However, when you collect data, you Import Price Index x 100
get monetized value of Import &  or to get Xp & Mp use - Export Value
Export like – for Example - Index/Export Volume Index and
 India’s Export to USA= US$250billion accordingly for Mp – Import Value
& Import may be US$320billion. Index/ Import Volume Index
Hence while calculating Mq/Xq use  Or N= Export Value Index/Export
the method – Volume Index ÷ Import Value Index/
 G= Mq/Xq or G= M/Mp ÷ X/Xp Import Volume Index
 M=Import in monetized Value ÷
Import Price Index (Index is available Income Terms of Trade
in the net very easily)
 Mp=Import Value Index ÷ Import I= NXq may accordingly be calculated.
Value Index
Double Factorial ToT
 D=NXz.
 When Xz is a representation of Factor Productivity of a given
country and can be used as FPz also.
 Hence D = NFPz (N indicates the rate of Xp & Mp being exchanged)

FPz analyzing productivity ratio, it gives far better result in ToT
analysis.
 Example – Since factor productivity is not available with every

country, we use common factor productivity with USA (available
easily) in relation to the 2nd country’s FPz with USA.
 India’s D ToT with China= N India X FPz of India with USA ÷FPz China
with USA
G ToT Scenario Analysis
1. Base YearY2000- G= Mq/Xq *100
Or 100/100*100= 100
G= Mq ÷ Xq * 100
=
i.e
2. Y2001 G= 96/100*100= 96 Import Quantity of that Year ÷
3. Y2002 G= 100/96*100= 104.16 Imp Price Index ÷ Export
Quantity of that Year ÷ Export
4. Y2003 G= 108/100*100= 108 Price Index × 100
5. Y2004 G= 108/80*100=135
6. Y2005 G=80/90*100= 88.88
7. Y2006 G= 114/112*100=101.78

N ToT Scenario Analysis
1. Base YearY2000- N= Xp/Mp *100
Or 100/100*100= 100 N= Xp/Mp X 100 i.e.
2. Y2001 N= 96/100*100= 96 Export Price Index
3. Y2002 N= 100/96*100= 104.16 divided by Import
Price Index Multiplied
4. Y2003 N= 108/100*100= 108
by 100
5. Y2004 N= 108/80*100=135
6. Y2005 N=80/90*100= 88.88
7. Y2006 N= 114/112*100=101.78

I= NXq ( India’s N
I ToT Scenario Analysis remains constant for all
countries). Hence it will
be N Multiplied by Export
Quantity of that year
Base YearY2000- I ToT= NXq divided by Export Price of
Or that Year.
Xp/Mp *Xq
1. Y2001 I ToT= 96/100 *100= 96

2. Y2002 I= 100/96 *100= 104.166
3. Y2003 I= 108/100*120= 129.6
4. Y2004 I= 108/80*76=102.6
5. Y2005 I=80/90*110= 97.777
6. Y2006 I= 114/112*100=101.78

Base YearY2000- D ToT= NXz
Or
Xp/Mp *Xz (Xz is Productivity Ratio)
1. Y2001 D ToT= 96/100 *100= 96

2. Y2002 D ToT= 100/96 *100= 104.166
3. Y2003 D ToT = 108/100*120= 129.6
4. Y2004 D ToT = 108/80*76=102.6
5. Y2005 D ToT = 80/90*110= 97.777
6. Y2006 D ToT = 114/112*100=101.78

Useful links
1. FTAs link- https://aric.adb.org/fta-all
2. Similarly you can use OEC Website-

https://oec.world/en/
3. ITC Website -
http://www.intracen.org/
4. For D ToT you need to get Xz from Fred

Data site- https://fred.stlouisfed.org/

Terms of Trade Calculation
Gross Barter ToT Net Barter ToT
G= Mq/Xq x 100.  N=Xp ÷ Mp x 100 or
 N= Only Export Price Index ÷ Only
 However, when you collect data, you Import Price Index x 100
get monetized value of Import &  or to get Xp & Mp use - Export Value
Export like – for Example - Index/Export Volume Index and
 India’s Export to USA= US$250billion accordingly for Mp – Import Value
& Import may be US$320billion. Index/ Import Volume Index
Hence while calculating Mq/Xq use  Or N= Export Value Index/Export
the method – Volume Index ÷ Import Value Index/
 G= Mq/Xq or G= M/Mp ÷ X/Xp Import Volume Index
 M=Import in monetized Value ÷
Import Price Index (Index is available Income Terms of Trade
in the net very easily)
 Mp=Import Value Index ÷ Import I= NXq may accordingly be calculated.
Volume Index
Research Methodology Expected Result/Out Come
1. G-ToT talks about Gross trade in Quantity
only. It is not enough to understand trade
Methodology gain?
2. N-ToT shall involve Xp/Mp indicating at

Formulae for Terms of Trade what rate India exchanged her exports to
calculation: buy imports. When we buy more imports
while exchanging less export, we are doing
1. G- ToT – Gross Barter Terms of Trade well.
i.e. Mq/Xq *100
2. N-ToT – Net Barter Terms of Trade 3. I-ToT shall lead to understanding whether
i.e. Xp/Mp *100 there is more Income out of our exports.
3. I-ToT – Income Terms of Trade
i.e. Xp/Mp *Xq 4. D-ToT further analyses whether we produce
4. D-ToT– Double Factorial Terms of our exports at optimized conditions or not
Trade compared to other countries. It captures
i.e. NXz or productivity efficiency.
Xp/Mp* Xz/Mz
5. When Xp is good & Xz is good, it will lead to
far better Terms of Trade.
1. Import or Export Price
Index is available in
the net.
2. Search Results | FRED |
St. Louis Fed - use this
Fed link for Xz
calculation which is
available in relation to
US.

Double Factorial ToT
 D=NXz.
 When Xz is a representation of Factor Productivity of a given
country and can be used as FPz also.
 Hence D = NFPz (N indicates the rate of Xp & Mp being exchanged)

FPz analyzing productivity ratio, it gives far better result in ToT
analysis.
 Example – Since factor productivity is not available with every

country, we use common factor productivity with USA (available
easily) in relation to the 2nd country’s FPz with USA.
 India’s D ToT with China= N India X FPz of India with USA ÷FPz China
with USA
Useful links
1. FTAs link- https://aric.adb.org/fta-all
2. Similarly you can use OEC Website-

https://oec.world/en/
3. ITC Website -
http://www.intracen.org/
4. For D ToT you need to get Xz from Fred

Data site- https://fred.stlouisfed.org/

Sample Table & Graphs

Table.1 Central Asian RTAs Nature & Scope
Sr Countries Number of Signed Ongoing Operational
No RTAS RTAs Negotiation RTAs
1 Kazakhstan 28 12 16
2 Kyrgyzstan 12 12 13
3 Tajikistan 10 08 02
4 Turkmenistan 05 05 00
5 Uzbekistan 10 09 01
Total 05 65 46 30 04
Source: https://aric.adb.org/fta-all

Basket-I Raw Export-Import Data
Source : OEC dataset, MIT *US billion $
APPENDIX 1
Dataset of India's trade with Japan, Singapore, South Korea & Malaysia Y2000-2014
India-Japan India-Malaysia India-South Korea India-Singapore
Indian Indian Indian Indian Indian Indian Indian Indian
Year
Export* Import* Export* Import* Export* Import* Export* Import*
2000 2.15 2.24 0.714 1.72 0.978 1.1 0.961 1.56
2001 1.8 1.82 0.783 1.52 1.07 1.35 1.03 1.68
2002 1.69 1.82 0.679 1.76 1.22 1.4 1.03 1.57
2003 1.78 2.3 0.72 2.59 1.23 2.98 1.28 1.89
2004 2.09 2.87 1.17 2.86 1.85 3.78 2.46 2.62
2005 2.7 3.57 1.13 3.77 2.19 4.82 2.52 3.97
2006 3.48 4.35 1.37 4.73 3.59 5.21 4.7 5.15
2007 4.15 5.81 2.07 5.58 4.49 6.25 6.12 6.49
2008 5.15 7.46 3.14 7.12 6.35 8.57 8.81 7.4
2009 3.35 6.17 3.11 4.93 4.11 7.91 5.08 6.13
2010 5.31 8.21 2.59 5.99 5.42 10.7 8.66 7.34
2011 6.25 10.5 3.56 8.87 7.45 12.6 16 8.46
2012 6.39 11.2 3.77 9.51 6.57 13.1 12.4 7.79
2013 6.72 9.35 5.16 8.82 6.03 12 10.3 7.17
2014 6.36 8.38 4.44 10.5 5.13 12.9 8.08 7.02
CAGR 8.0548 9.8824 13.9441 13.7938 12.5674 19.2261 16.4258 11.3417
Pre RTA CAGR 9.463 13.870 13.752 13.290 17.295 24.508 26.489 13.840
Post RTA CAGR 0.583 -7.242 7.641 5.784 -1.365 4.786 13.821 6.538

APPENDIX 2
Dataset of India's trade with Pakistan, Bangladesh & Sri-Lanka
India-Pakistan India-Bangladesh India-Sri Lanka
Year Indian Export* Indian Import* Indian Export* Indian Import* Indian Export* Indian Import*
2000 0.162 0.0664 0.676 0.0971 0.493 0.073
2001 0.164 0.0661 0.955 0.0638 0.586 0.071
2002 0.178 0.0328 1.19 0.0719 0.744 0.083
2003 0.248 0.0738 1.49 0.0868 0.956 0.116
2004 0.592 0.171 1.36 0.0841 1.114 0.220
2005 0.621 0.328 1.45 0.123 1.184 0.345
2006 1.31 0.324 1.92 0.241 1.687 0.358
2007 1.38 0.317 2.41 0.368 2.213 0.392
2008 2.02 0.433 3.19 0.314 2.703 0.432
2009 1.53 0.283 2.16 0.223 1.810 0.278
2010 1.81 0.345 2.77 0.346 2.453 0.390
2011 1.8 0.379 3.37 0.471 3.257 0.514
2012 1.67 0.498 4.88 0.539 3.380 0.567
2013 2.01 0.394 5.75 0.507 3.957 0.472
2014 2.16 0.523 6.22 0.508 4.757 0.563
CAGR 20.324 15.884 17.178 12.546 17.576 15.710

Net Barter terms of Trade of CA
300
Kazakhstan
Uzbekistan
250
Kyrgystan
Tajikstan
200
Turkmenistan
Central Asia
150
N
100
50

Gross barter terms of trade with Basket 2
Figure 2 : India's G-ToT with Sri Lanka, Pakistan,

Bangladesh Y2000-2014
50
Indo-Sri Lanka
45
Indo-Pakistan
40
Indo-Bangladesh
Gross Barter ToT
35
30
Case of Large Trade
25
20
Volume Fluctuation
15
10
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Gross Barter terms of trade with Basket 1
Figure 2: India's G-ToT with Japan, Malaysia, S.

Korea, Singapore Y2000-2014
400
Indo-Japan
Indo-Malaysia 1. Near Continuous G-ToT
350
Indo-South Korea decline with Singapore
300 Indo-Singapore
2. Continuous rise with
Gross Barter ToT
250 Japan till 2009 & then

decreases
200
150 3. Very fluctuating rise/fall

with Malaysia
100
4. Visible rise with South
50
Korea with occasional fall
0
2010
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2011
2012
2013
2014

Sample Work;
Export-Import Variation Analysis
Central Asian Quantitative & % Trade Share with Russia, China & India;
Y2000-2015 US $ Million
100%
90%
80%
Russia-CA
70%
60% China-CA
% of Total exports
50% India-CA
40% CA-Russia
30%
CA-China
20%
CA-India
10%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: WITS

CARs GDP Volitility;Y2000-2018
Fig.3 CAR Countries GDP Growth Rate Kazhakstan

Y 2000- 2018 Kyrgygstan
9.4 Tajikistan
9 7.78 Turkmenistan
7.5
7.4 7.4 Uzbekistan
4.1 6.9 11
4.2 14.7 14.69 10.2
3.8 4.3 5 10.9 7.1
3.2 7.5 7.3
5.4 9.5 13 4.46
10.9 10.3
3.9 7.7 10.3 7.4 5.1
8.3 7.4 6.09
0.25 8 9 11 6.5
10.8 7 7.9 7.4 6
5.3 6.19
7 8.5 10.9 6.5 7.6
5.4 7 6.6
3.1 6.1 6.7
13.5 6.5 5.9 7.3
9.8 8.4 7.4 6 6.8
9.8 9.3 9.7 10.7
9.6 -0.17 8.9 3.8 7.3 7.4 4 4.7
-0.01 -0.2 3.5
-0.47 6 3.9 4.2
2.8 4.8 4.2 4
3.3 1.1 4.1
1.19 1.09
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: https://data.worldbank.org/

Table.1 Central Asian RTAs
Countries Number Signed Ongoing
Asian Development
Sr
of RTAS RTAs Negotiations Bank, ADB site has FTAs
1 Kazakhstan 28 12 16 list for all countries
2 Kyrgyzstan 12 12 13 By Country/Economy - Free
Trade Agreements (adb.org)
3 Tajikistan 10 08 02
4 Turkmenistan 05 05 00
5 Uzbekistan 10 09 01
Fig.2 CARsFunctional
RTAs Profile
Total 05 65 46 30 RTAs
Source: https://aric.adb.org/fta-all
Ongoing
Negotiations
65 RTAs
Signed
RTAs

Findings
Table.2 Central Asia has quantitatively CARs ToT Findings with

Russia, China & India at a Glance Y 2000-2017
CARs Exports Quantity & Import Quantity I- ToT of CARs to I- ToT of Partner
Partner % Change & % Change Partner to CA
Russia 2.7177 172% 7.093 609% 1.59 59% 4.63 363%
China 103.04 10204% 74.17 7317% 60.3 5934% 44.77 4377%
India 23.154 2215% 6.97 597% 13.56 1256% 3.69 269%

Source: Author’s Calculation

"MASS OF COMMODITIES" AND "SUM OF
ENJOYMENTS“
RICARDO AND MALTHUS

Trade Development Chapter With ToT

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Trade Development Chapter With ToT

Uploaded by

Copyright:

Available Formats

Trade & Development

“MASS OF COMMODITIES" AND "SUM OF

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

 Mainly Great Britain, France, the Netherlands,

 Wealth of a Nation is measured by its holdings Gold / Silver & Precious

 It was more export oriented than import oriented.

 BOP was Export favorable in terms of gold / silver holdings.

BITS Pilani, K K Birla Goa Campus

1- It confused National wealth with that of king’s wealth.

2- Neglected other economic attributes like Human

3- Excessive Export causes price rise of the product.

4- promotes economic protectionism.

BITS Pilani, K K Birla Goa Campus

Are the Classical Economists –

BITS Pilani, K K Birla Goa Campus

 Criticized the intellectual basis of

 Weakens the economy by providing

BITS Pilani, K K Birla Goa Campus

 Subsidized domestic Industries

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

Japan 10 03 Abs. Advantage

Japan has Abs. Adv. On computer production &

BITS Pilani, K K Birla Goa Campus

 In that case, according to the theory of absolute advantage, no

 It can be contrasted with the concept of comparative advantage

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

 Proposed that trade still can be

 Core Competency Provides Malaysia 00 40+40 80

 The principle of comparative advantage states that a country

 And should import those goods in which it has a comparative

 Out of such specialization, it is argued, will accrue greater benefit

 The assumption that countries are driven only by the

BITS Pilani, K K Birla Goa Campus

 Transport costs may outweigh any comparative

 Factor Endowment Theory

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

Idea of Welfare Gain?

 Hence D = NFPz (N indicates the rate of Xp & Mp being exchanged)

 Example – Since factor productivity is not available with every

BITS Pilani, K K Birla Goa Campus

BITS Pilani, K K Birla Goa Campus

1. Y2001 I ToT= 96/100 *100= 96

BITS Pilani, K K Birla Goa Campus

1. Y2001 D ToT= 96/100 *100= 96

BITS Pilani, K K Birla Goa Campus

1. FTAs link- https://aric.adb.org/fta-all

2. Similarly you can use OEC Website-

4. For D ToT you need to get Xz from Fred

BITS Pilani, K K Birla Goa Campus

2. N-ToT shall involve Xp/Mp indicating at