Front Matter
  • 1 0000000404811396 Monetary Fund


One of the more important yet puzzling aspects of the recent global stagflation has been the rather surprising resiliency of growth rates of real income in non-oil developing countries during the 1973-80 period in the face of the marked slowdown of corresponding growth rates in the industrial world. The primary purpose of this paper is to shed some light on this phenomenon by examining the relationship between the rate of economic growth in the non-oil developing countries and that in the industrial countries over the past decade or so.

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  • Prefatory Note

  • I. Introduction

  • II. Industrial Country Income Growth and Non-Oil Developing Countries’ Exports

    • Total Imports of Industrial Countries

      • Direct Volume Effect

      • Direct Effect on Import Prices and the Terms of Trade

      • Indirect Protection Effect

      • Indirect Competitive Effect

    • Industrial Country Imports from Non-Oil Developing Countries

      • Commodity Composition of Industrial Countries’ Imports and of Non-Oil Developing Countries’ Exports

      • Price Competitiveness of Non-Oil Developing Countries’ Exports

      • Tariff Preferences for Non-Oil Developing Countries

    • Non-Oil Developing Countries’ Exports to Industrial Countries and Their Total Exports

    • Industrial Country Real Income and Non-Oil Developing Countries’ Exports: The Reduced-Form Relationship

  • III. Non-Oil Developing Countries’ Export Growth and Real Income Growth

    • General Aspects of Trade and Economic Development

    • Exports and Economic Growth: A Framework

      • Production Linkage

      • Demand Linkage

    • Empirical Evidence on Exports and Economic Growth

      • Cross-Country Studies

      • Time-Series Evidence

    • Other Factors Affecting Growth in Non-Oil Developing Countries

      • Migrants’ Remittances

      • Capital Flows

      • Structure of Production

      • Economic Policy Strategies

    • The Reduced-Form Relationship Between Industrial Country Growth and Growth in Non-Oil Developing Countries

  • IV. Summary and Conclusions

  • References

  • Appendix: Classification of Countries

  • Tables in Text

  • 1. Growth Rates of Real Output and Trade: Industrial Countries and Non-Oil Developing Countries, 1968–80

  • 2. Weighted Average Versus Median Growth Rates of Real GNP: Non-Oil Developing Countries, 1968–72 and 1973–80

  • 3. Alternative Measures of Dispersion of Real GNP Growth Rates: Net Oil Importing Developing Countries, 1968–72 and 1973–80

  • 4. Implied Income Elasticities for Total Imports: Industrial Countries, 1968–80

  • 5. Commodity Composition of Trade of Oil Importing Developing Countries, 1963, 1973, and 1978

  • 6. Non-Oil Developing Countries: Export Prices, Terms of Trade, and Purchasing Power of Exports, 1968–80

  • 7. Commodity Price Trends, 1973–79

  • 8. Industrial Countries’ Imports from Non-Oil Developing Countries: Changes in Import Volume, Export Prices, and Import Market Shares, 1968–80

  • 9. Changes in Industrial Country Imports, Total and by Commodity Group, 1968–80

  • 10. Commodity Composition of Merchandise Exports: Selected Country Groups, 1960 and 1978

  • 11. Import Coverage of the Generalized System of Tariff Preferences, 1976

  • 12. Destination of Non-Oil Developing Countries’ Exports and Import Volume Growth in Non-Oil Developing Countries’ Export Markets, 1973–80

  • 13. Commodity Composition of Trade Among Non-Oil Developing Countries and of Trade Between Industrial Countries and Non-Oil Developing Countries, 1977

  • 14. Trade Among Developing Countries as a Share of Their Total Exports, 1963–77

  • 15. Shares of Ten Top Exporters in Trade Among Developing Countries for Major Commodity Groups, 1963 and 1977

  • 16. Estimates of the Elasticity of Non-Oil Developing Countries’ Export Volume with Respect to Industrial Countries’ Real Economic Activity

  • 17. Cross-Country Estimates of the Effect of Growth of Exports on the Rate of Growth of Real GNP for Developing Countries

  • 18. Non-Oil Developing Countries: Growth of Volume of Exports and of Real GDP, 1965–80

  • 19. Inflows of Workers’ Remittances

  • 20. Principal Movements of Migrant Labor

  • 21. Ratio of Workers’ Remittances to Exports (Merchandise) for 1967, 1973, and 1978–79

  • 22. Elasticities of Workers’ Remittances into Labor Exporting Countries with Respect to Economic Activity in Host Country

  • 23. Developing Countries: Estimates of the Effects of Factors of Production on the Growth of Real GNP

  • 24. Estimates of the Elasticity of Non-Oil Developing Countries’ Real GDP Growth with Respect to Industrial Countries’ Real GDP Growth, 1965–80


  • Chapter

  • III. 1. Non-Oil Developing Countries: Growth Rates of Real GDP and Export Volume, 1965–80

  • The following symbols have been used throughout this paper:

  • … to indicate that data are not available;

  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

  • – between years or months (e.g., 1979–81 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

  • / between years (e.g., 1980/81) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

Prefatory Note

This study was prepared in the Research Department of the International Monetary Fund. Its authors are Morris Goldstein and Mohsin S. Khan, Advisors in the Research Department. The authors are grateful to a number of colleagues in the Fund for helpful comments on an earlier draft of the study. A special measure of thanks is due to Andrew Feltenstein of the Fiscal Affairs Department for his very useful suggestions at an early stage on the overall design of the study. Views expressed in the study are the authors’ alone and do not necessarily represent the views of the Fund.