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Energy crisis. the French have seen almost nothing of the bill (yet).

In the language of economists, the shock suffered by France this year is called the deterioration of trade conditions. In other words, the increase in energy prices and the weakness of the euro increased the difference between French export and import prices. “Since France is a net importer of hydrocarbons, an increase in their relative price automatically leads to a loss of real income for the country, which could reach 85 billion in 2022.Details in a note from the Treasury to Bercy, economist Guillaume Claveres.

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This concept of degrading the terms of trade was coined in the 1950s by Raoul Prebisch, the first Secretary-General of the Cnuced, and the British Hans Singer. Their thesis, arguing that the prices of agricultural products sold by developing countries were inevitably falling relative to the prices of manufactured goods, was intended to warn against growing inequality between the North and the South. They didn’t plan…

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Source: Le Figaro

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