Ruilvoet

Ruilvoet, in international economics, is the terms of trade of a country—the ratio between the prices of its exports and the prices of its imports. It is often expressed as an index, calculated as the export price index divided by the import price index and multiplied by 100. A higher ruilvoet means that, for a given amount of exports, more imports can be purchased; a lower ruilvoet has the opposite effect.

A rising ruilvoet generally indicates an improvement in a country’s purchasing power in international markets, while a falling ruilvoet signals a deterioration. It is a measure of how much imports can be financed by export earnings and provides information beyond raw export and import volumes and values.

Ruilvoet is determined by relative price movements of major export and import goods, international price trends, and to some extent by exchange rate dynamics that influence the prices faced by buyers and sellers. It is distinct from the nominal exchange rate, though exchange rate changes can indirectly affect it by altering import and export prices.

Implications of changes in ruilvoet include effects on real income, welfare, and policy space. A persistent deterioration can constrain consumer purchasing power, reduce the ability to finance imports, and influence fiscal and monetary policy. Conversely, an improved ruilvoet can boost welfare and investment prospects. The concept is widely used in economic analysis to assess how global price shifts affect a country’s income from trade.