How would supply-side considerations influence the ability of one or the other of your
countries to respond to changes in terms of trade? You may want to keep in mind both our
discussion of international markets in capital and labor (prior to 1930) and the impact of
“Free Trade Imperialism” on the specialization patterns of a country.
D. The power point slides posted on Moodle include “Tree Diagrams” for each of your
countries. The tree diagrams show the distribution of exports by product (named) and
industry (color-coded) for 1962. To what extent did the export specialization of each of your
economies in 1900 remain unchanged up through 1962? To what extent did the specialization
change? Did the change reflect a new model of export-led growth or did it remain with the
model observed in 1900?
Please note that a transformative export sector should usher in ongoing transformation in the
economy (and productivity gains) that goes beyond just the export sector.
Sample Solution
