Economic and Social Survey of Asia and the Far East 1957

image of Economic and Social Survey of Asia and the Far East 1957

This latest edition of the Survey analyzes current economic and social developments in the region against the background of events in the world economy. It also focuses on the serios problems of growth and transformation of the area's least developed and Pacific Island developing economies.



Export instability in the primary exporting countries: (2). The internal economy

In a primary exporting country, the effects of export instability begin but do not end with the balance of payments. Some of the most serious effects are on its internal economy. In addition, effects of both types interact in a fairly complex way. For example, increased foreign demand for a particular export commodity tends to raise the price, especially in the short run, when output expansion cannot easily catch up with the increase in demand. This not only changes its price relation with other commodities but also expands money incomes and expenditures. If the new situation continues for some time, the allocation of resources will be affected. The increases in money incomes and expenditures—appearing first in the export sector but extending after a while throughout the economy—will also raise import demand and react adversely on the balance of payments.


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