This trade relative to underdeveloped countries is the technological

This means that productivity growth and
technological development will increase factorpricesrather than lowering
consumption prices. On the other hand, inunderdevelopedperipheral countries,
labor is unorganized. Developing countries will not havesuch a consequence, asconsumers
and producers in different countries in international trade are the result of
thebenefits of the producers of industrialized countries in increasing
productivity. The low
elasticity of demand is causing a great flexibility coupled with instability in
low supply of basic commodities prices. Secondly, the demand for basic goods is
limited to a lesser increase in demand for finished goods. This is partly due
to the low income elasticity of the underlying products and, in part, to the
technological superiority of industrialized countries exporting finished goods.

While imports of primary goods around
the center increased at a lower rate than national income, the imports of
industrial goods from the central countries of peripheral countries are
increasing at a greater rate than their revenues. As revenue increases in
central countries, a smaller proportion of income comes from primary goods,
technological progress leads to the production of goods that require less raw
materials, or synthetic products instead of natural products.

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 Thus, the entry of peripheral countries into
the markets of central countries is hampered. On
the other hand, according to the argument for supply, the deterioration of the
terms of trade of the peripheral countries is due to the different effects of
the cyclical movements of the world economy on the peripheral and central
countries.

In the periods when the economy is on
the uptrend, the favorable turnover rates of primary producers deteriorate
against the primary producers in a period when the economy is in a downward
trend. Long-term deterioration in the terms of trade of peripheral countries is
seen as a result of the downtrend in cyclical movements taking longer than the
upward trend.

Another important factor in the
deterioration of terms of trade relative to underdeveloped countries is the
technological superiority of industrialized countries. There are high
technology export goods under the control of industrialized countries and
multinational companies in these countries. This means that multinational firms
are making monopolistic profits because of their strength and size. Productivity increases in central
countries do not reduce the prices of products, and due to pressures to raise
wages, products are introduced into the market with prices exceeding their
values.

On the other hand, low unemployment and
low wages in peripheral countries this raises the profitability even if the
productivity increases and causes the peripheral countries to export with
decreasing prices due to the increasing production demand conditions.

 As
a result, technical development leads to an increase in income in the central
countries, and in the peripheral countries the prices decrease. This situation,
which has led to the transfer of resources by the peripheral countries to the
central countries, is emerging through trade passes.