Summary of Findings and Policy Implications

Alfred Maizels, Robert Bacon and George Mavrotas


Published in print July 1997 | ISBN: 9780198233381
Published online October 2011 | e-ISBN: 9780191678981 | DOI:

Series: UNU/WIDER Studies in Development Economics

Summary of Findings and Policy Implications

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As trade in their exports deteriorated, the developed countries incurred sizable foreign exchange losses since the early 1980s. Between 1980 and 1993, the cumulated loss reached more that $105 bn., or higher than six times the total beverage shipments' value in 1980. The terms of trade of tropical beverages saw an even more rapid decline after 1985 as annual loss rose from $3.6 bn. to $13.7 bn. between 1989 and 1991 and $15.9 bn. between 1992 and 1993. The high increase in rate of loss is associated with the collapse of the cocoa and coffee agreements. Moreover, the markets for both coffee and cocoa experienced disequilibrium since high levels of unsold stock accumulated. This chapter summarizes the findings of this evaluation, as well as illustrates policy implications.

Keywords: foreign exchange; policy implications; trade; annual loss; terms of trade; disequilibrium; unsold stocks

Chapter.  2950 words. 

Subjects: Economic Development and Growth

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