Author: | Balassa, B. |
Title: | Temporary windfalls and compensation arrangements |
Journal: | Weltwirtschaftliches Archiv
1989 : VOL. 125:1, p. 97-113 |
Index terms: | INTERNATIONAL TRADE COMPENSATION |
Language: | eng |
Abstract: | Windfall profits caused by temporary rise in the price of a major export commodity may have adverse effects because l. they change relative prices of traded and non-traded goods; 2. the government tries to spend it; 3. it increases the adverse effects of the business cycle. Compensation arrangements in the form of variable export levies set aside in a separate fund at the central bank are needed when exports are concentrated and subject to large price fluctuations. The article presents a list for those countries (staples) which fall under this heading. |
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