Relative movements in prices: United States versus “other industrial countries”

Unit value indices of exports of manufactures from the United States and from nine other industrial countries are shown in Table 1 for the period 1953–59. They are the indices used by the Statistical Office of the United Nations for the construction of the price index of world exports of manufactured goods,⁷ published quarterly in its Monthly Bulletin of Statistics. They refer to exports in sections 5-8 of the United Nations’ Standard International Trade Classification (SITC), valued in U.S. dollars, and are obtained from published or unpublished official indices of export unit values.⁸

The indices for the United States show that from 1953 to 1959 the unit value of manufactured exports increased by 16 per cent, i.e., by about 2 per cent per annum. The rise was the sharpest during the two years 1956 and 1957, when the unit value increased by over 5 per cent per annum. From 1953 to 1955, the change in the unit value was relatively small.

In order to compare the changes in U.S. prices with those of the “other industrial countries” as a group, the unit value indices for the countries in this group are combined into an average index, using the values of their exports of manufactures in 1956 as weights. The choice of 1956 is quite arbitrary; the year is chosen simply because it is the middle year in the period studied. The average index thus computed indicates that, from 1953 to 1959, the export unit values of these countries as a group increased by only 2 per cent, compared with the 16 per cent increase in the U.S. index.

Although the price indices most directly relevant to the purpose of this study are those for exports of manufactures, it is nevertheless useful to compare the movements in the domestic wholesale prices of manufactures in the United States with those of similar prices in the “other industrial countries.” Since domestic wholesale price indices of manufactures may be considered as indicators of the degree of price inflation in the manufacturing sectors of the various countries, a comparison of these indices may throw some light on the factors underlying the relative movements in the export prices of manufactures observed above.

The domestic wholesale price indices of manufactures for the various industrial countries are shown in Table 2. The data have been obtained from the official statistical publications of the nine countries. The definition of “manufactures” for purposes of domestic wholesale price indices is even less uniform than that for export unit value indices; the data were originally designated variously as “manufactured goods,” “nonagricultural products,” “finished goods,” etc. For Germany and Japan, the wholesale price indices had to be calculated by combining existing price indices for several subgroups of commodities.

The indices for the United States indicate that the U.S. domestic wholesale prices of manufactures increased from 1953 to 1959 by 12 per cent. The weighted average price index for the eight “other industrial countries” combined shows an average increase from 1953 to 1959 of only 4 per cent. If, instead of comparing the price levels in two specific years, we consider the trend of prices during the period as a whole, we find an average increase of almost 2 per cent a year in the U.S. wholesale prices of manufactures, and an increase of less than 1 per cent a year in the prices of manufactures in the “other industrial countries” as a group.

Changes in the index of the unit value of exports of manufactures are compared in Chart 1 with changes in the domestic wholesale price index during the 1953–59 period for the United States and for several other major industrial countries. The striking parallelism between the movements of the two indices for practically all these countries⁹ indicates that during the period under study changes in export prices of manufactures were closely associated with, or perhaps reflected, changes in domestic prices in the manufacturing sectors of the countries concerned. That U.S. export prices of manufactures rose more during this period than did those of the other industrial countries can therefore be attributed to a greater degree of price inflation in the U.S. manufacturing industries than in those of the other industrial countries.¹⁰

Manufactures of Selected Countries: Indices of Unit Value of Exports and of Domestic Wholesale Prices¹

(1953 = 100)

Citation: IMF Staff Papers 1962, 001; 10.5089/9781451955972.024.A004

¹ The data have been adjusted for variations in exchange rates; see Tables 1 and 2.

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Manufactures of Selected Countries: Indices of Unit Value of Exports and of Domestic Wholesale Prices¹

(1953 = 100)

Citation: IMF Staff Papers 1962, 001; 10.5089/9781451955972.024.A004

¹ The data have been adjusted for variations in exchange rates; see Tables 1 and 2.

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Manufactures of Selected Countries: Indices of Unit Value of Exports and of Domestic Wholesale Prices¹

(1953 = 100)

Citation: IMF Staff Papers 1962, 001; 10.5089/9781451955972.024.A004

¹ The data have been adjusted for variations in exchange rates; see Tables 1 and 2.

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Relative price movements and changes in shares of world exports

Given the price indices for the various countries, the next problem is to evaluate the influence exercised by relative movements in prices on the U.S. share in world exports of manufactures.

Changes in a country’s share in world exports may be attributed partly to factors unrelated to relative changes in prices. In recent literature, increasing attention has been paid to the effects on a country’s share in world exports of the changes in the structure of world demand for exports. A country’s share in total world exports may decline, for instance, because its exports are mainly directed to areas where demand has grown relatively slowly, or because its exports are composed largely of commodities for which world demand has not grown as fast as the demand for other commodities, or because both of these factors have been at play. It has been estimated that about one fourth of the fall in the U.S. share of world exports of manufactures from 1954–56 to 1958 may be attributed to changes in the area and commodity structure of world demand.¹¹ Since the latter changes are presumably unrelated to changes in relative prices, their effects on the U.S. share in world exports of manufactures should be excluded from the data used in this study.

The effects of changes in the structure of world demand on the U.S. share of world exports of manufactures have, in fact, been eliminated in three recent studies,¹² which relate to different periods of years but which use essentially the same method for eliminating these effects. The “net changes” in the U.S. share obtained in these studies are presented in Table 3, where they are compared with the percentage changes in indices of export unit values and wholesale prices for the same periods.

According to the data in Table 3, the U.S. share in world exports of manufactures, when adjusted for changes in the structure of world demand, declined during all the periods covered; in those periods, the increases in the prices of U.S. exports of manufactures were considerably greater than those of the exports of manufactures of the “other industrial countries.” Therefore, it appears very likely that price did play a significant part, during the period under study, in the deterioration of the U.S. position in the world market for manufactures.

This by no means implies that price is the only important factor responsible for the deterioration in the competitiveness of U.S. exports. As has often been pointed out, this could be attributed to many other factors, such as the disappearance of shortages of supplies in the rest of the world, the rapid improvement in the quality of other countries’ products, in their sales facilities, and in the availability of credit for exports, etc. Whether relative changes in price are a more important factor than these others as an explanation of the “net changes” in the U.S. share of world exports is very difficult to determine empirically.

Relative price movements among individual industrial countries

Although this study is mainly concerned with the changes in prices of U.S. exports relative to changes in the prices of the exports of the “other industrial countries,” it is interesting to examine, in passing, relative price movements for the other industrial countries themselves.

On the whole, the data for changes in the unit value of exports of the individual countries (Table 1) are quite consistent with the data for changes in the domestic wholesale prices of their manufactures (Table 2). The average increase in the unit value of exports of manufactures for the non-U.S. industrial countries as a group was only 2 per cent, but the increase for the United Kingdom was 10 per cent, and that for Canada 9 per cent. The increase in wholesale price indices for the group as a whole was about 4 per cent, and the increases in the U.K. and Canadian indices were 12 per cent and 10 per cent, respectively. On the other hand, both the unit values of exports and the domestic wholesale prices of manufactures for France, Italy, and Japan declined from 1953 to 1959. For France, the changes in both indices may be attributed largely to the currency depreciations in August 1957 and December 1958.

Despite the rapid increase in Germany’s share of world exports of manufactures in recent years,¹³ the prices of its exports of manufactures appear to have increased, during the period under study, at about the same rate as those of the “other industrial countries” as a whole. Moreover, between 1957 and 1959, when prices in most of the other industrial countries declined, prices in Germany remained unchanged. The dramatic improvement in Germany’s share of world exports of manufactures in the last six or seven years has therefore to be explained by factors other than relative changes in prices.¹⁴

Iron and steel

Exports of iron and steel products accounted for 5 per cent of total U.S. exports of manufactures in 1958.

Price indices, for the 1953–59 period, for exports of selected steel products (bars, plates, sheets, and structurals)¹⁵ from the United States, the United Kingdom, Japan, and the countries of the European Coal and Steel Community (ECSC) are shown in Table 4. The price indices are calculated on the basis of annual average price quotations for exports, from the various countries, of particular kinds of steel products, with given specifications. However, the specifications of the products within each group are not exactly uniform between the various countries.¹⁶ It is assumed in this study that these variations in specifications within a group are not large enough to affect significantly the relative movements in the export prices of the various countries.

Table 4.

Major Producing Countries: Indices of Export Prices of Various Steel Products, 1953–59

(1953 = 100)

Sources: Indices for the ECSC countries are based on data in Metal Bulletin (London), various issues. Those for the other countries are based on data in Statistisches Bundesamt, Preise, Löhne, Wirtschafts-rechnungen, Reihe 8, Teil III, various issues.

¹The base period for these indices is the average of mid-month quotations for April and August 1953. Original data for the years after 1953 are annual averages of the price quotations for export basis prices of “continental mills,” quoted in the issue of Metal Bulletin published nearest to the middle of each month. In 1954, only “official minimum prices” were reported up to November. For steel sheets, no price was reported throughout 1958.

Table 4.

Major Producing Countries: Indices of Export Prices of Various Steel Products, 1953–59

(1953 = 100)

Steel Product	Country	1954	1955	1956	1957	1958	1959
Bars	United States	103	107	122	132	138	139
	United Kingdom	82	97	106	112	105	102
	ECSC1	—	119	126	120	89	106
	Japan	90	99	126	136	83	97
Plates	United States	103	104	111	119	124	126
	United Kingdom	78	87	110	123	100	89
	ECSC1	—	98	127	127	86	82
	Japan	91	110	146	148	89	92
Sheets	United States	94	98	106	114	112	113
	United Kingdom	99	98	92	97	93	92
	ECSC1	—	101	101	102	—	97
	Japan	98	95	113	118	88	88
Structurals	United States	104	107	115	124	130	132
	United Kingdom	80	95	120	133	106	97
	ECSC1	—	114	148	140	99	100
	Japan	83	95	116	129	87	89

Sources: Indices for the ECSC countries are based on data in Metal Bulletin (London), various issues. Those for the other countries are based on data in Statistisches Bundesamt, Preise, Löhne, Wirtschafts-rechnungen, Reihe 8, Teil III, various issues.

¹The base period for these indices is the average of mid-month quotations for April and August 1953. Original data for the years after 1953 are annual averages of the price quotations for export basis prices of “continental mills,” quoted in the issue of Metal Bulletin published nearest to the middle of each month. In 1954, only “official minimum prices” were reported up to November. For steel sheets, no price was reported throughout 1958.

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Table 4.

Major Producing Countries: Indices of Export Prices of Various Steel Products, 1953–59

(1953 = 100)

Steel Product	Country	1954	1955	1956	1957	1958	1959
Bars	United States	103	107	122	132	138	139
	United Kingdom	82	97	106	112	105	102
	ECSC1	—	119	126	120	89	106
	Japan	90	99	126	136	83	97
Plates	United States	103	104	111	119	124	126
	United Kingdom	78	87	110	123	100	89
	ECSC1	—	98	127	127	86	82
	Japan	91	110	146	148	89	92
Sheets	United States	94	98	106	114	112	113
	United Kingdom	99	98	92	97	93	92
	ECSC1	—	101	101	102	—	97
	Japan	98	95	113	118	88	88
Structurals	United States	104	107	115	124	130	132
	United Kingdom	80	95	120	133	106	97
	ECSC1	—	114	148	140	99	100
	Japan	83	95	116	129	87	89

Sources: Indices for the ECSC countries are based on data in Metal Bulletin (London), various issues. Those for the other countries are based on data in Statistisches Bundesamt, Preise, Löhne, Wirtschafts-rechnungen, Reihe 8, Teil III, various issues.

¹The base period for these indices is the average of mid-month quotations for April and August 1953. Original data for the years after 1953 are annual averages of the price quotations for export basis prices of “continental mills,” quoted in the issue of Metal Bulletin published nearest to the middle of each month. In 1954, only “official minimum prices” were reported up to November. For steel sheets, no price was reported throughout 1958.

The indices presented in Table 4 for the ECSC countries need special comment. In March 1953, steel producers in these countries agreed to fix minimum prices for the export of steel products to third countries. The agreement has been known as the “Brussels Convention” (Entente de Bruxelles). For these countries, the export prices of steel ordinarily published almost invariably refer to these minimum prices. However, in the sellers’ market from 1953 to 1958, effective export prices were significantly higher than the official minimum prices. In the recession of 1958, on the other hand, effective export prices fell well below the official minimum prices, despite severe reductions in the latter. The official minimum prices of the Brussels Convention therefore cannot be taken to represent the movements in the actual export prices charged by the producers in the various ECSC member countries. Therefore, the data for these countries given in Table 4 are based on actual export prices for continental European countries reported in the Metal Bulletin (London). These indices are believed to be more indicative of the movements in the actual export prices charged by the continental producers in the world market, although they do not refer to the prices of any particular ECSC country.

It is striking to observe in Table 4 that, for all four groups of steel products, the U.S. export price increased from 1953 to 1959 by far more than that of any of the other major steel-exporting countries. The U.S. export price of steel bars increased by 39 per cent, while those of the United Kingdom and the ECSC countries increased by only 2 per cent and 6 per cent, respectively, and that of Japan declined by 3 per cent. The U.S. export price of steel plates increased in this period by 26 per cent, while those of the United Kingdom, the ECSC countries, and Japan declined by 11, 18, and 8 per cent, respectively. Similar relative price movements can be observed for steel sheets and structural steel.

A more interesting aspect revealed by the data in Table 4 is the difference between the cyclical behavior of U.S. export prices of steel and that of the other countries’ export prices. U.S. export prices of steel (except steel sheets) increased steadily during the 1953–59 period, while those of all the other countries declined sharply during both the 1954 and the 1958 recessions in the world demand for steel products. For example, the export prices of steel bars from Japan and the United Kingdom declined from 1953 to 1954 by 10 per cent and 18 per cent, respectively, while the U.S. export price rose by 3 per cent. From 1954 to 1957, when the boom in steel demand was being pushed to a peak, Japan’s export price for bars increased by 51 per cent, that of the United Kingdom by 37 per cent, and that of the United States by only 28 per cent. From 1957 to 1958, as the demand for steel declined, the Japanese price dropped by 40 per cent, the British price by 6 per cent, and the ECSC price by 26 per cent, while the U.S. price increased by 5 per cent. From 1958 to 1959, as world demand recovered, the Japanese and the ECSC prices rose considerably, the U.K. price continued to decline, while the U.S. price increased slightly. Similar movements occurred in the export prices of steel plate and structural steels. These data clearly indicate that in both the 1954 and the 1958 recession the U.S. export prices of steel increased, and that in the 1954–57 expansion they decreased, relative to the export prices of steel of the other major producing countries.

A series of internal reports generously made available by a major U.S. steel export company describes the competitiveness of a wide variety of steel mill products exported by that company vis-à-vis other countries’ exports of similar products. These reports reveal how the situation changed from “a weakening of our competitive position” in early 1954 to “we are competitive” a year later, and to “we are very competitive” in 1956 and early 1957. This buoyant mood altered sharply in early 1958, when the quoted foreign prices began to drop rapidly and U.S. prices continued to rise. In mid-1958, the report was “our prices are without exception not competitive.” This situation lasted as late as early 1959 when it was still reported: “We are no longer within reasonable range of Europe’s and Japan’s export prices for certain steel.” During the rest of 1959, however, there was evidently a stiffening of the market, and by the end of 1959 a report stated: “Our prices on certain sheet products are now competitive in a few nearby markets.”

In order to find out whether these changes in relative export prices significantly affected the U.S. share in world exports of steel, it would be desirable first to eliminate the effect of changes in the structure of world demand on the U.S. share of steel exports. Traditionally, U.S. exports of steel have been chiefly directed toward markets in the Western Hemisphere and have been more heavily weighted with flat-rolled and tubular products than have those of the continental European countries. Either a disproportionate change in the demand for steel in these markets, or a change in the world demand for these steel products, would have a significant effect on the U.S. share in world exports of steel, quite unrelated to changes in relative prices. Unfortunately, a detailed analysis of changes in the structure of world demand for steel cannot be undertaken in this study for lack of adequate data.¹⁷ The following discussion of the effect of changes in relative export prices can therefore be made only in terms of “gross” changes in the U.S. share, without taking into consideration the effect of changes in the structure of world demand.

With this reservation, it is interesting to note that changes in the U.S. share of world exports of steel during the 1953–59 period were very much in accordance with what would have been expected on the basis of the relative movements in export prices of steel, observed above. As pointed out there, U.S. export prices of steel increased in both the 1954 and the 1958 recession, and decreased in the 1954–57 expansion, relative to the export prices of steel of the other major producing countries. The U.S. share of world exports of steel, on the other hand, fell from 17 per cent in 1953 to 14 per cent in 1954, rose steadily to 19 per cent in 1957, and then dropped to only 11 per cent in 1958.¹⁸ It appears likely that a significant part of these changes in the U.S. share can be attributed to changes in U.S. export prices of steel relative to those of other exporting countries, although such factors as changes in the structure of world demand for steel, acute supply shortages resulting in prolonged delivery dates in other countries during certain years of booming demand, etc., were also at work.

Other commodity groups

The commodity groups to be discussed in this section are nonelectrical machinery, transport equipment, chemicals, electrical machinery, and textiles. They are listed in the order of their importance in total U.S. exports of manufactures in 1958. Together, they accounted for about 73 per cent of such exports in that year.

Because of the diversity of the products in each group, an intensive study of the changes in the relative prices of exports of the various industrial countries would be both laborious and difficult. For the United States, the only price data available for these groups are the domestic wholesale price indices; and only a few of the “other industrial countries” publish export price indices by commodity groups. The indices available are presented in Table 5; they have been supplemented by unpublished official export price indices, by unit value indices (derived for the purpose of this study by combining value and volume indices relating to more narrowly defined commodity classes), and, in a few cases, by domestic wholesale price indices.

Table 5.

United States and “Other Industrial Countries”: Price Indices of Manufactures by Commodity Groups, 1953–59¹

(1953 = 100)

Sources: France: Institut National de la Statistique et des Etudes Economiques, Annuaire Statistique de la France, 1958, and Bulletin Mensuel de Statistique, June 1960.Germany, Federal Republic: Derived from data on the value and volume of exports in Statistisches Bundesamt, Der Aussenhandel der Bundesrepublik Deutschland, various issues.Italy: Wholesale indices (W) from Istituto Centrale di Statistica, Annuario Statistico Italiano, 1959, and Bollettino Mensile di Statistica, June 1960; export indices (E) from Istituto Centrale di Statistica, Statistica Annuale del Commercio con l’Estero, 1959.Japan: Economic Planning Agency, Japanese Economic Statistics, various issues, and Bank of Japan, Economic Statistics Monthly, various issues.United Kingdom: Based on data supplied by U.K. Board of Trade.United States: Bureau of Labor Statistics, Wholesale Prices and Price Indexes, various issues.

¹Wholesale price indices (W) or export price indices (E), adjusted for variations in exchange rates.

²Weighted average of the indices for the countries listed. The weights are based on the values (in U.S. dollars) of the respective countries’ exports in that commodity group in 1956.

³Estimated on basis of changes in wholesale price index from 1958 to 1959.

Table 5.

United States and “Other Industrial Countries”: Price Indices of Manufactures by Commodity Groups, 1953–59¹

(1953 = 100)

		1954	1955	1956	1957	1958	1959
Nonelectrical machinery
United States (W)		102	106	115	122	124	128
Other Industrial Countries2		101	103	107	112	114	115
	Germany, Federal Republic (E)	102	104	109	113	114	114
	Italy (E)	106	101	98	100	100	983
	Japan (E)	97	92	92	95	94	94
	United Kingdom (E)	100	103	107	114	119	121
Transport equipment
United States (W)		100	103	109	114	118	120
Other Industrial Countries2		98	97	100	104	106	106
	Germany, Federal Republic (E)	94	93	95	97	101	99
	Italy (E)	100	95	79	92	92	903
	Japan (W)	99	97	97	97	96	93
	United Kingdom (E)	100	101	106	111	114	115
Chemicals
United States (W)		101	101	101	104	104	104
Other Industrial Countries2		100	99	98	97	92	89
	France (W)	98	97	97	93	87	79
	Germany, Federal Republic (E)	101	100	98	95	90	87
	Italy (E)	97	95	98	96	94	913
	Japan (E)	104	98	91	84	74	69
	United Kingdom (E)	100	101	101	103	100	100
Electrical machinery
United States (W)		102	104	112	120	123	125
Other Industrial Countries2		97	100	104	104	104	108
	Germany, Federal Republic (E)	94	96	100	99	99	103
	Italy (W)	96	96	99	98	96	98
	Japan (W)	99	97	105	113	109	107
	United Kingdom (E)	100	105	108	109	109	114
Textiles
United States (W)		97	97	96	96	93	95
Other Industrial Countries2		99	96	97	97	90	88
	France (W)	98	91	92	97	83	72
	Germany, Federal Republic (E)	101	104	107	109	96	90
	Japan (E)	96	90	91	86	78	84
	United Kingdom (E)	101	101	100	102	102	99

Sources: France: Institut National de la Statistique et des Etudes Economiques, Annuaire Statistique de la France, 1958, and Bulletin Mensuel de Statistique, June 1960.Germany, Federal Republic: Derived from data on the value and volume of exports in Statistisches Bundesamt, Der Aussenhandel der Bundesrepublik Deutschland, various issues.Italy: Wholesale indices (W) from Istituto Centrale di Statistica, Annuario Statistico Italiano, 1959, and Bollettino Mensile di Statistica, June 1960; export indices (E) from Istituto Centrale di Statistica, Statistica Annuale del Commercio con l’Estero, 1959.Japan: Economic Planning Agency, Japanese Economic Statistics, various issues, and Bank of Japan, Economic Statistics Monthly, various issues.United Kingdom: Based on data supplied by U.K. Board of Trade.United States: Bureau of Labor Statistics, Wholesale Prices and Price Indexes, various issues.

¹Wholesale price indices (W) or export price indices (E), adjusted for variations in exchange rates.

²Weighted average of the indices for the countries listed. The weights are based on the values (in U.S. dollars) of the respective countries’ exports in that commodity group in 1956.

³Estimated on basis of changes in wholesale price index from 1958 to 1959.

View Table

Table 5.

United States and “Other Industrial Countries”: Price Indices of Manufactures by Commodity Groups, 1953–59¹

(1953 = 100)

		1954	1955	1956	1957	1958	1959
Nonelectrical machinery
United States (W)		102	106	115	122	124	128
Other Industrial Countries2		101	103	107	112	114	115
	Germany, Federal Republic (E)	102	104	109	113	114	114
	Italy (E)	106	101	98	100	100	983
	Japan (E)	97	92	92	95	94	94
	United Kingdom (E)	100	103	107	114	119	121
Transport equipment
United States (W)		100	103	109	114	118	120
Other Industrial Countries2		98	97	100	104	106	106
	Germany, Federal Republic (E)	94	93	95	97	101	99
	Italy (E)	100	95	79	92	92	903
	Japan (W)	99	97	97	97	96	93
	United Kingdom (E)	100	101	106	111	114	115
Chemicals
United States (W)		101	101	101	104	104	104
Other Industrial Countries2		100	99	98	97	92	89
	France (W)	98	97	97	93	87	79
	Germany, Federal Republic (E)	101	100	98	95	90	87
	Italy (E)	97	95	98	96	94	913
	Japan (E)	104	98	91	84	74	69
	United Kingdom (E)	100	101	101	103	100	100
Electrical machinery
United States (W)		102	104	112	120	123	125
Other Industrial Countries2		97	100	104	104	104	108
	Germany, Federal Republic (E)	94	96	100	99	99	103
	Italy (W)	96	96	99	98	96	98
	Japan (W)	99	97	105	113	109	107
	United Kingdom (E)	100	105	108	109	109	114
Textiles
United States (W)		97	97	96	96	93	95
Other Industrial Countries2		99	96	97	97	90	88
	France (W)	98	91	92	97	83	72
	Germany, Federal Republic (E)	101	104	107	109	96	90
	Japan (E)	96	90	91	86	78	84
	United Kingdom (E)	101	101	100	102	102	99

Sources: France: Institut National de la Statistique et des Etudes Economiques, Annuaire Statistique de la France, 1958, and Bulletin Mensuel de Statistique, June 1960.Germany, Federal Republic: Derived from data on the value and volume of exports in Statistisches Bundesamt, Der Aussenhandel der Bundesrepublik Deutschland, various issues.Italy: Wholesale indices (W) from Istituto Centrale di Statistica, Annuario Statistico Italiano, 1959, and Bollettino Mensile di Statistica, June 1960; export indices (E) from Istituto Centrale di Statistica, Statistica Annuale del Commercio con l’Estero, 1959.Japan: Economic Planning Agency, Japanese Economic Statistics, various issues, and Bank of Japan, Economic Statistics Monthly, various issues.United Kingdom: Based on data supplied by U.K. Board of Trade.United States: Bureau of Labor Statistics, Wholesale Prices and Price Indexes, various issues.

¹Wholesale price indices (W) or export price indices (E), adjusted for variations in exchange rates.

²Weighted average of the indices for the countries listed. The weights are based on the values (in U.S. dollars) of the respective countries’ exports in that commodity group in 1956.

³Estimated on basis of changes in wholesale price index from 1958 to 1959.

Owing to the limited data available, the number of “other industrial countries” included is smaller than the number included above in the discussion of price indices for exports of manufactures as a whole. The countries included here are France, the Federal Republic of Germany, Italy, Japan, and the United Kingdom, which are believed to be the most important of the “other industrial countries” competing with the United States in the export of these products.

For each commodity group, an average price index for the “other industrial countries” has been computed from the price indices for the respective countries weighted by the values (in U.S. dollars) of the exports in 1956 of that group of commodities. As in the calculation above (p. 84) of the price index for exports of manufactures for “other industrial countries” as a whole, the choice of weights is arbitrary; and the year 1956 has been selected only because it is the middle year in the period under study.

The data in Table 5 indicate that, for all the commodity groups examined, U.S. prices increased from 1953 to 1959 substantially more than those of the “other industrial countries.” Moreover, a comparison of the year-to-year changes in the U.S. price indices with those in the average indices of the “other industrial countries” shows that, out of the 30 comparisons (i.e., 6 year-to-year changes in each of the 5 commodity groups), there were only 4 instances in which the U.S. price index rose at a slower (or fell at a faster) rate than the index for the “other industrial countries,” and 2 instances in which the changes in the two indices were the same. In all the other 24 comparisons, the U.S. price index rose more (or fell less) than the index of the “other industrial countries.” The impression gained from these comparisons is unmistakably clear: throughout the 1953–59 period, U.S. prices tended to rise relative to the prices in the “other industrial countries” for practically all the commodity groups examined.

Another interesting feature of the data in Table 5 is the diversity of the price movements in the five commodity groups and in the various industrial countries. From 1953 to 1959, the prices of machinery and transport equipment increased very substantially in both the United States and the United Kingdom, while the prices of chemicals and textiles in these two countries either increased relatively little or declined. In Germany, the prices of nonelectrical machinery increased substantially, while the prices of transport equipment and electrical machinery remained relatively stable and the prices of chemicals and textiles decreased. In Italy and Japan, prices in practically all the commodity groups declined. Generally speaking, the prices of machinery and transport equipment in world trade appear to have increased from 1953 to 1959, while those of chemicals and textiles changed very little or declined; possibly these differences were due to a shift in the commodity composition of world demand for exports of manufactures, and to technological progress in the chemical industries.¹⁹ The declines in the export prices of Italy and Japan in almost all the commodity groups may be attributed, perhaps, to the rapid expansion of productive capacity and technological progress in those countries.

Let us next compare the relative changes in prices of U.S. exports of manufactures and those of the “other industrial countries” with the changes in the U.S. share of world exports in the various commodity groups, estimates of which are either explicitly given in the three studies referred to above (^{footnote 2}, p. 81) or can be derived from data given there. These estimates and the price changes in the United States and in the “other industrial countries” are summarized in Table 6. As explained earlier, the “net” changes in U.S. shares refer to changes in U.S. shares net of the effect of changes in the market structure of world demand for these commodities.

Table 6.

United States and “Other Industrial Countries”: Changes in U.S. Share of World Exports of Manufactures by Commodity Groups Compared with Price Changes

¹The studies are those listed in ^{footnote 2}, p. 81.

²Based on data in the three studies listed in column 2. “Net” change is net of the effect of changes in the market structure of world demand for exports in the various commodity groups. Note that the estimates based on the Commerce study are similar but not numerically comparable to those based on the Romania and the National Institute studies. The former are expressed in terms of relative changes, and the latter are in terms of changes in percentage points, from the U.S. share in the base period.

³Based on data in Table 5.

⁴All machinery, including electrical.

Table 6.

United States and “Other Industrial Countries”: Changes in U.S. Share of World Exports of Manufactures by Commodity Groups Compared with Price Changes

Period of Comparison	Changes in U.S. Share of World Exports			Percentage Change in Price Indices3
	Study1	Actual Change	“Net” Change2	United States	“Other Industrial Countries”
Nonelectrical machinery
1954–56 to 1958	Commerce	–6	–3	+15	+10
1953–54 to 1956	Romanis	+0.8	+0.3	+14	+6
1956 to 1958	Romanis	–3.6	–2.2	+8	+7
1958 to 1959	National Institute4	–2.0	–0.5	+2	+2
Transport equipment
1954–56 to 1958	Commerce	–16	–17	+14	+8
1953–54 to 1956	Romanis	–1.4	–0.5	+9	+1
1956 to 1958	Romanis	–3.5	–3.1	+8	+6
1958 to 1959	National Institute	–1.3	–1.2	+2	0
Chemicals
1954–56 to 1958	Commerce	–4	0	+3	–7
1953–54 to 1956	Romanis	+0.2	+0.4	0	–2
1956 to 1958	Romanis	–0.7	0	+3	–6
1958 to 1959	National Institute	–1.1	–0.4	0	–3
Electrical machinery
1954–56 to 1958	Commerce	–7	–3	+16	+4
1953–54 to 1956	Romanis	–0.5	–0.5	+11	+6
1956 to 1958	Romanis	–0.6	–0.1	+10	0
Textiles
1954–56 to 1958	Commerce	–1	+4	–4	–7
1953–54 to 1956	Romanis	–0.5	–0.2	–3	–3
1956 to 1958	Romanis	0	+0.1	–3	–7
1958 to 1959	National Institute	–0.1	–0.2	+2	–2

¹The studies are those listed in ^{footnote 2}, p. 81.

²Based on data in the three studies listed in column 2. “Net” change is net of the effect of changes in the market structure of world demand for exports in the various commodity groups. Note that the estimates based on the Commerce study are similar but not numerically comparable to those based on the Romania and the National Institute studies. The former are expressed in terms of relative changes, and the latter are in terms of changes in percentage points, from the U.S. share in the base period.

³Based on data in Table 5.

⁴All machinery, including electrical.

View Table

Table 6.

United States and “Other Industrial Countries”: Changes in U.S. Share of World Exports of Manufactures by Commodity Groups Compared with Price Changes

Period of Comparison	Changes in U.S. Share of World Exports			Percentage Change in Price Indices3
	Study1	Actual Change	“Net” Change2	United States	“Other Industrial Countries”
Nonelectrical machinery
1954–56 to 1958	Commerce	–6	–3	+15	+10
1953–54 to 1956	Romanis	+0.8	+0.3	+14	+6
1956 to 1958	Romanis	–3.6	–2.2	+8	+7
1958 to 1959	National Institute4	–2.0	–0.5	+2	+2
Transport equipment
1954–56 to 1958	Commerce	–16	–17	+14	+8
1953–54 to 1956	Romanis	–1.4	–0.5	+9	+1
1956 to 1958	Romanis	–3.5	–3.1	+8	+6
1958 to 1959	National Institute	–1.3	–1.2	+2	0
Chemicals
1954–56 to 1958	Commerce	–4	0	+3	–7
1953–54 to 1956	Romanis	+0.2	+0.4	0	–2
1956 to 1958	Romanis	–0.7	0	+3	–6
1958 to 1959	National Institute	–1.1	–0.4	0	–3
Electrical machinery
1954–56 to 1958	Commerce	–7	–3	+16	+4
1953–54 to 1956	Romanis	–0.5	–0.5	+11	+6
1956 to 1958	Romanis	–0.6	–0.1	+10	0
Textiles
1954–56 to 1958	Commerce	–1	+4	–4	–7
1953–54 to 1956	Romanis	–0.5	–0.2	–3	–3
1956 to 1958	Romanis	0	+0.1	–3	–7
1958 to 1959	National Institute	–0.1	–0.2	+2	–2

¹The studies are those listed in ^{footnote 2}, p. 81.

²Based on data in the three studies listed in column 2. “Net” change is net of the effect of changes in the market structure of world demand for exports in the various commodity groups. Note that the estimates based on the Commerce study are similar but not numerically comparable to those based on the Romania and the National Institute studies. The former are expressed in terms of relative changes, and the latter are in terms of changes in percentage points, from the U.S. share in the base period.

³Based on data in Table 5.

⁴All machinery, including electrical.

The data in Table 6 indicate that the “net declines” in the U.S. shares of world exports in the transport equipment and the electrical machinery groups during the 1953–59 period could be at least partly attributed to the price movements in the United States relative to those in the “other industrial countries.” For both groups, during all the periods of comparison, a “net” decline in the U.S. share was associated with an increase in the U.S. prices that was substantially greater than the increase in the prices in the “other industrial countries.”

A similar argument cannot be applied to the nonelectrical machinery group, in which there was a small “net” increase in the U.S. share from 1953–54 to 1956, despite the fact that U.S. prices increased much more than the prices in the “other industrial countries.” However, Miss Romanis has pointed out that the U.S. gain during that period was probably “due to exceptionally favorable circumstances,” such as an unusually great expansion in U.S. investments in the dollar area, and an exceptional expansion in demand in OEEC countries, and that but for these circumstances there would have been “a significant decline in the U.S. share of trade.”²⁰ With this qualification, the data in Table 6 indicate a continual “net” decline in the U.S. share of world exports in this group, as would be expected on the basis of the data on relative prices.

For the chemicals group, the data in Table 6 fail to confirm any possible role played by relative prices in affecting “net” changes in the U.S. share of world exports, except the change from 1958 to 1959. In the comparisons for earlier periods, the U.S. share does not appear to have suffered any “competitive” loss despite an increase in U.S. prices relative to those of the “other industrial countries.” The studies by the Commerce Department and by Miss Romanis both point to the strength of U.S. chemical exports during the periods under study. It appears, therefore, either that price was not an important factor in determining changes in the U.S. share of world exports of chemicals, or, what seems to be more likely, that the available price data are not adequate for the purpose of this analysis.

For the textiles group also, the data in Table 6 give no indication of a clear relative-price effect on the changes in the U.S. share of world exports. The untypical composition of U.S. textile exports²¹ is probably a major factor. Moreover, Miss Romanis points out that the “net” loss in the U.S. share from 1953–54 to 1956 was due largely to a marked fall in the U.S. share in markets where the main impact of the recovery in Japanese exports was felt; and that U.S. exports in the 1956–58 period were favored by special factors, such as the voluntary restriction schemes of Japanese textile exporters, and the greater fall in wool prices than in those of other textile fibers.

In conclusion, given the inadequacies of the price data and the many nonprice factors that might have been at work, it is not surprising that a clear price effect cannot be detected in the chemicals and textiles groups. However, it is significant that, in the more important machinery and transport equipment groups, declines in the U.S. share of world exports were closely associated with advances in U.S. prices that were greater than the increases in prices of the “other industrial countries.”