Globalization of Capital and Terms of Trade Movements Prabhat Patnaik

This paper argues that the “liberalization” of exchange rate regimes has an independent, powerful and separate effect on the terms of trade which has its origin in the currency markets and not the goods markets. This effect arises from the secular tendency of the real values of third world currencies to fall, relative to the dominant currency in a regime of “liberalized exchange rates”.

globalization_capital (Download the full text in PDF format)