Party in the Pampas? Some economists have suggested that rapid growth in developing countries like China will dramatically raise demand for the agricultural and commodity exports of primary-resource-abundant countries like Argentina. This would generate an increase in Argentina’s terms of trade – that is,

If we go back in time approximately 15 years (mid 2000s), the price of soybean and its derivatives skyrocketed. This led to a rapid growth of certain economies, or certain economic sectors. Argentina's economy grew a lot since the price of it main exports doubled in 1 year. The same happened to Brazil and the American mid-west. Imagine if Apple was able to double the price of the iPhone and sold the same number of units.

Argentina's trade balance changed from a deficit (more imports than exports) to a surplus (more exports than imports). Even if the total quantity of goods remained the same, the value of the goods exported increased. This allowed the Argentinean economy to grow, at least temporarily.

When you analyze Argentina you must remember that it is a unique country. It was once the richest country in the world, with the highest GDP per capita, but it is now a poor nation. Many blame politicians for this economic catastrophe, but the same party has ruled the country for more than 70 years, and Argentineans keep voting for them. It is the only rich country that turned poor.