CYCLICAL CHANGES IN THE BALANCE OF MERCHANDISE TRADE OF COUNTRIES EXPORTING CHIEFLY PRIMARY PRODUCTS.

On the one hand it has been suggested, tacitly or explicitly, that an unfavourable change in the balance of trade of countries exporting chiefly primary products partly accounted for the large-scale default on foreign debt of such countries in the early 1930s. On the other hand, in a study of elasticities of demand for imports of several industrial and agricultural countries, it would seem that, as the quantity of total world trade is rising during world prosperity, the total imports into agricultural and mining countries will be rising faster than those into the industrial countries. And, that, in time of world slump and recession, the former will be falling faster than the latter. A cyclical shifts on the side of exports of different types of country is expected. These two facts taken together provide a very important clue to the cyclical pattern of change in the balance of payments of different types of country in the world. An examination of the changes in the balances of merchandise trade of the Balkan countries in the great depression will serve as a basis for tracing the main factors which account for the changes in the same period in the balances of twenty-five other countries exporting chiefly primary products.