Analysing the Terms of Trade Effect for Pakistan

Author: 
Nishat Fatima
Description: 
PIDE Working Papers 2010: 59
JEL codes: 
Abstract: 
The study investigates the impact of changes in terms of trade in Pakistan on its income and consumption potentials, by employing two measures of terms of trade, namely, barter terms of trade and income terms of trade. The study examines Pakistans terms of trade behaviour using time series data from 1990- 2008, and works out the losses the country had to bear owing to deterioration in its terms of trade. Paper finds that worsening of terms of trade has a negative impact on economic growth of Pakistan, as it ultimately reduces gross domestic product.
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