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Prebisch-Singer Redux

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

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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Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 140.

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Date of creation: Feb 2002
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Handle: RePEc:chb:bcchwp:140

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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. Jeffrey Frankel, 2011. "A Solution to Fiscal Procyclicality: the Structural Budget Institutions Pioneered by Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 14(2), pages 39-78, August.
  2. David S. Jacks, Kevin H. O'Rourke and Jeffrey G. Williamson, 2009. "Commodity Price Volatility and World Market Integration since 1700," The Institute for International Integration Studies Discussion Paper Series iiisdp284, IIIS.
  3. 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.
  4. 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.
  5. 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).
  6. Lederman, Daniel & Maloney, William F., 2008. "In search of the missing resource curse," Policy Research Working Paper Series 4766, The World Bank.
  7. Frankel, Jeffrey, 2011. "A Solution to Overoptimistic Forecasts and Fiscal Procyclicality: The Structural Budget Institutions Pioneered by Chile," Working Paper Series 11-012, Harvard University, John F. Kennedy School of Government.
  8. Jose Antonio Ocampo & Maria Angela Parra, 2004. "The Terms Of Trade For Commodities In The Twentieth Century," International Trade 0402006, EconWPA.

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