Abstract:This paper is concerned with how primary product price movements, and movements in the terms of trade of primary commodities, impinge on the balance of payments and growth of countries, and also on debt. The first part of the paper gives an up‐to‐date survey of the literature on the terms of trade of primary commodities which suggests overall an average deterioration of 0.5 to 1.0 percent per annum over the last 90 years. The second section models the terms of trade, and movements in the terms of trade are shown to depend on wage rate changes in industry, labour saving technical progress in industry, diminishing returns to agriculture, and land saving technical progress in agriculture. In the next section of the paper a model of balance of payments constrained growth is developed which enables the direct and indirect effects of movements in the terms of trade on growth to be quantified. Some recent evidence of the effect of terms of trade movements and volatility on growth is examined, and the effect of export instability on growth in Africa. The fourth section looks at the debt situation in Africa, and a simple model is presented enabling changes in the debt service ratio to be decomposed to see, particularly, the effect of export earnings instability on the debt service ratio. The last section draws some policy conclusions.Résumé:Le document examine comment les fluctuations des cours des produits primaires et l'évolution des termes de l'échange des produits de base influent sur la balance des paiements, la croissance et la dette des pays. La première section passe en revue la documentation la plus récente sur les termes de l'échange des produits primaires, qui fait apparaître en moyenne une deterioration de 0,5 à 1 pour cent par an sur les 90 dernières années. La deuxième section présente une modélisation des termes de l'échange et montre que leur variation est liée à l'évolution des taux salariaux dans l'industrie, au progrès technique occasionnant des économies de main‐d'oeuvre dans l'industrie, aux rendements décroissants dans l'agriculture et aux économies de terres induites par le progrès technique dans l'agriculture. La section suivante du document développe un modèle d'une croissance entravée par la balance des paiements, permettant de quantifier les effets directs et indirects des fluctuations de la balance des paiements sur la croissance. Sont examinés quelques exemples récents des effets qu'exercent sur la croissance les mouvements et la volatilité de la balance des paiements ainsi que l'instablilité des exportations en Afrique. La quatrième section se penche sur la situation de la dette en Afrique et présente un modèle simple qui permet de décomposer les changements intervenant dans le ratio du service de la dette pour voir notamment comment l'instabilité des recettes d'exportation influe sur le ratio du service de la dette. La dernière section tire quelques conclusions d'ordre pratique.This paper is a mixture of survey material and analytical frameworks for thinking about movements in the net barter terms of trade of primary commodities relative to manufactured goods and how these movements affect the growth performance of countries both directly and indirectly (for example, by affecting the balance of payments, or by worsening the debt burden of heavily indebted countries). Following a brief introduction, the paper is divided into five parts. Firstly, there is an up‐to‐date survey of movements in the terms of trade of primary commodities and of less developed countries (LDCs), including Africa. Secondly, I address the issue of the determinants of terms of trade movements, drawing on my formalisation of Kaldor's two‐sector agriculture‐industry model which captures both neoclassical and structuralist explanations of terms of trade movements (Thirlwall, 1986). Thirdly, a model of balance of payments constrained growth is presented which enables the effect of terms of trade movements on economic growth to be quantified. I look at some of the recent evidence of the effect of terms of trade movements and volatility on output growth, and the effect of export instability on growth in Africa. Fourthly, the interrelationship between primary product price changes and international debt problems is examined, with specific reference to A