Dear all,
I have seen two kinds of method to calculate the net barter Terms of Trade, and I just would like to ask which is better.
The first is expressed as the export Laspeyre index (price index) divided by the import Laspeyre index, say, (export unit value at t1 / export unit value at t0) / (import unit value at t1 / import unit value at t0).
The second is simply the current export unit value divided by the current import unit value, without considering anything at t0, the base period.
I am not sure which is better.
Many thanks!
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