¹ For a classic discussion of the concept of “terms of trade” see Viner, Jacob, Studies in the Theory of Intrenational Trade (New York, 1937), 558–64.Google Scholar

² Another concept which takes into account capital movements, in a form different from the one proposed here and not applicable for the purpose at hand, is Taussig's “gross barter terms of trade.” See Viner, ibid.

³ In constructing the table, prices of services—on which no data are available—were assumed to change in the same manner as prices of goods. This assumption is, of course, quite arbitrary. Moreover, some service items (such as interest payments) might better have been treated, for the purpose at hand, in a fashion similar to that of capital movements. The illustration is not likely, however, to have been seriously impaired by this factor.

⁴ A similar table has been constructed for the United States, the major capital exporter in post-war years. But here, the differences between the two indexes are rather slight. This is due both to the fact that US capital exports, although the largest in the world not only in absolute magnitude but apparently also in proportion of the country's trade, amount only to less than one fifth of the country's imports in the period 1950–62 and to the fact that prices of US exports and imports fluctuated only little in most of these years.