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Prebisch-Singer Redux

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  • Cuddington, John T.
  • Ludema, Rodney
  • Jayasuriya, Shamila A

Abstract

In light of ongoing concern about commodity specialization in Latin America, this paper revisits the argument of Prebisch (1950) that, over the long term, declining terms of trade would frustrate the development goals of the region. This paper has two main objectives. The first is to clarify the issues raised by Prebisch and Singer (1950), as they relate the commodity specialization of developing countries (and Latin America in particular). The second is to reconsider empirically the issue of trends in commodity prices, using recent data and techniques. We show that rather than a downward trend, real primary prices over the last century have experienced one or more abrupt shifts, or "structural breaks," downwards. The preponderance evidence points to a single break in 1921, with no trend, positive or negative, before or since.

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Bibliographic Info

Paper provided by United States International Trade Commission, Office of Economics in its series Working Papers with number 15857.

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Date of creation: 2002
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Handle: RePEc:ags:uitcoe:15857

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Keywords: International Development; International Relations/Trade;

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Deterioração dos termos de troca
    by Leonardo Monasterio in Blog do Leonardo Monasterio on 2009-07-02 01:05:00
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Cited by:
  1. Lederman, Daniel & Maloney, William F., 2008. "In search of the missing resource curse," Policy Research Working Paper Series 4766, The World Bank.
  2. Frankel, Jeffrey A., 2011. "A Solution to Overoptimistic Forecasts and Fiscal Procyclicality: The Structural Budget Institutions Pioneered by Chile," Scholarly Articles 4723209, Harvard Kennedy School of Government.
  3. David S. Jacks & Kevin H. O'Rourke & Jeffrey G. Williamson, 2011. "Commodity Price Volatility and World Market Integration since 1700," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 800-813, August.
  4. Brahmbhatt, Milan & Canuto, Otaviano, 2010. "Natural Resources and Development Strategy after the Crisis," World Bank - Economic Premise, The World Bank, issue 1, pages 1-7, February.
  5. Jose Antonio Ocampo & Maria Angela Parra, 2004. "The Terms Of Trade For Commodities In The Twentieth Century," International Trade 0402006, EconWPA.
  6. Jeffrey Frankel, 2011. "A Solution to Fiscal Procyclicality: the Structural Budget Institutions Pioneered by Chile," Working Papers Central Bank of Chile 604, Central Bank of Chile.
  7. Jerrett, Daniel & Cuddington, John T., 2008. "Broadening the statistical search for metal price super cycles to steel and related metals," Resources Policy, Elsevier, vol. 33(4), pages 188-195, December.
  8. Konstantin M. Wacker, 2011. "The Impact of Foreign Direct Investment on Developing Countries’ Terms of Trade," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).

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