Svedberg, Peter () (Institute for International Economic Studies, Stockholm University) Tilton, John () (Colorado School of Mines)
Abstract
Over the past 40 years economists have devoted considerable effort to estimating long-run trends in real commodity prices. The results indicate that the real prices for many commodities have fallen, suggesting to the surprise of many that resource scarcity is declining over time. Almost all of this work, however, uses the U.S. producer price index or other standard price deflators, which recent research shows overestimate inflation for several reasons. This article examines copper prices with adjusted deflators designed to eliminate this bias. It finds that the trend over time, which is significantly downward when no adjustment is made to the deflator, displays no tendency in either direction or is significantly upward depending on the magnitude of the deflator adjustment employed. These findings suggest that real resource prices provide less support than widely assumed for the hypothesis that resources are becoming more available or less scarce over time.
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Publisher Info
Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number
723.
Length: 33 pages Date of creation: 17 Jul 2003 Date of revision: Handle: RePEc:hhs:iiessp:0723
Contact details of provider: Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden Phone: +46-8-162000 Fax: +46-8-161443 Web page: http://www.iies.su.se/ More information through EDIRC
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Mark Bils & Peter J. Klenow, 2001.
"Quantifying Quality Growth,"
American Economic Review,
American Economic Association, vol. 91(4), pages 1006-1030, September.
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