Terms-of-Trade Shocks and Economic Performance, 1870-1940: Prebisch and Singer Revisited
Debate over trends in the terms of trade between primary commodities and manufactures, their causes and their impact has dominated the literature for more than a century. Classical economists claimed that the terms of trade of primary commodities should improve since land and natural resources are always in inelastic supply. Following the Great Depression, a new view emerged. What came to be known as the Prebisch-Singer thesis was instead that the terms of trade for primary products had deteriorated up to the 1950s. The subsequent literature has almost exclusively and obsessively asked whether a deterioration has actually taken place over the 130 years following 1870. Nowhere in this literature has the impact of these terms of trade shocks on long run growth been assessed, although it is certainly full of lively speculation and debate. This paper fills part of this empirical gap by constructing a country-specific panel data base 1870-1940, by documenting terms of trade trends by country and region, and, finally, by estimating the impact of the price shocks on long run economic performance. We find the impact to have been asymmetric between center and periphery.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- William Easterly & Michael Kremer & Lant Pritchett & Lawrence H. Summers, 1993.
"Good Policy or Good Luck? Country Growth Performance and Temporary Shocks,"
NBER Working Papers
4474, National Bureau of Economic Research, Inc.
- Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993. "Good policy or good luck?: Country growth performance and temporary shocks," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 459-483, December.
- Jeffrey D. Sachs & Andrew Warner, 1995.
"Economic Reform and the Process of Global Integration,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
- Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
- Ronald Findlay, 1995. "Factor Proportions, Trade, and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061759, June.
- Bloch, Harry & Sapsford, David, 1997. "Some estimates of Prebisch and Singer effects on the terms of trade between primary producers and manufacturers," World Development, Elsevier, vol. 25(11), pages 1873-1884, November.
- Powell, A., 1989.
"Commodity And Developing Country Terms Of Trade, What Does The Long Run Show?,"
Economics Series Working Papers
9980, University of Oxford, Department of Economics.
- Powell, Andrew, 1991. "Commodity and Developing Country Terms of Trade: What Does the Long Run Show?," Economic Journal, Royal Economic Society, vol. 101(409), pages 1485-96, November.
- Sarkar, Prabirjit & Singer, H. W., 1991. "Manufactured exports of developing countries and their terms of trade since 1965," World Development, Elsevier, vol. 19(4), pages 333-340, April.
- Diakosavvas, Dimitris & Scandizzo, Pasquale Lucio, 1991. "Trends in the Terms of Trade of Primary Commodities, 1900-1982: The Controversy and Its Origins," Economic Development and Cultural Change, University of Chicago Press, vol. 39(2), pages 231-64, January.
- Findlay, Ronald, 1980. "The Terms of Trade and Equilibrium Growth in the World Economy," American Economic Review, American Economic Association, vol. 70(3), pages 291-99, June.
- Jeffrey G. Williamson, 1992.
"The Evolution of Global Labor Markets Since 1830 Background Evidence and Hypotheses,"
NBER Historical Working Papers
0036, National Bureau of Economic Research, Inc.
- Williamson Jeffrey G., 1995. "The Evolution of Global Labor Markets since 1830: Background Evidence and Hypotheses," Explorations in Economic History, Elsevier, vol. 32(2), pages 141-196, April.
- J. Bradford De Long, .
"Productivity Growth, Convergence, and Welfare: Comment,"
J. Bradford De Long's Working Papers
_129, University of California at Berkeley, Economics Department.
- De Long, J Bradford, 1988. "Productivity Growth, Convergence, and Welfare: Comment," American Economic Review, American Economic Association, vol. 78(5), pages 1138-54, December.
- Robert E. Lipsey, 1963. "Introduction to "Price and Quantity Trends in the Foreign Trade of the United States"," NBER Chapters, in: Price and Quantity Trends in the Foreign Trade of the United States, pages 3-7 National Bureau of Economic Research, Inc.
- Jeffrey G. Williamson, 1998. "Globalization, Labor Markets and Policy Backlash in the Past," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 51-72, Fall.
- David E. Bloom & Jeffrey G. Williamson, 1997.
"Demographic Transitions and Economic Miracles in Emerging Asia,"
NBER Working Papers
6268, National Bureau of Economic Research, Inc.
- Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review, World Bank Group, vol. 12(3), pages 419-55, September.
- Deaton, A., 1999.
"Commodity Prices and Growth in Aftica,"
186, Princeton, Woodrow Wilson School - Development Studies.
- Bloch, Harry & Sapsford, David, 2000. "Whither the Terms of Trade? An Elaboration of the Prebisch-Singer Hypothesis," Cambridge Journal of Economics, Oxford University Press, vol. 24(4), pages 461-81, July.
- Paul Collier & Jan Willem Gunning, 1999. "Why Has Africa Grown Slowly?," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 3-22, Summer.
- Robert J. Barro, 1991.
"Economic Growth in a Cross Section of Countries,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 106(2), pages 407-443.
- Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
- Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
- Darity, William A, Jr, 1990. "The Fundamental Determinants of the Terms of Trade Reconsidered: Long-run and Long-period Equilibrium," American Economic Review, American Economic Association, vol. 80(4), pages 816-27, September.
- G.F. Ray, 1977. "The 'Real' Price of Primary Products," National Institute Economic Review, National Institute of Economic and Social Research, vol. 81(1), pages 72-76, August.
- anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2, 4-6.
- Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-31, December.
- repec:chb:bcchwp:03 is not listed on IDEAS
- Robert J. Barro, 2012.
"Inflation and Economic Growth,"
CEMA Working Papers
568, China Economics and Management Academy, Central University of Finance and Economics.
- Easterlin, Richard A., 1981. "Why Isn't the Whole World Developed?," The Journal of Economic History, Cambridge University Press, vol. 41(01), pages 1-17, March.
- Lant Pritchett, 1997.
"Divergence, Big Time,"
Journal of Economic Perspectives,
American Economic Association, vol. 11(3), pages 3-17, Summer.
- Spraos, John, 1980. "The Statistical Debate on the Net Barter Terms of Trade between Primary Commodities and Manufactures," Economic Journal, Royal Economic Society, vol. 90(357), pages 107-28, March.
- David Sapsford & V.N.Balasubramanyam, .
"The Long-Run Behaviour of the Relative Price of Primary Commodities: Statistical Evidence and Policy Implications,"
ec7/94, Department of Economics, University of Lancaster.
- Sapsford, David & Balasubramanyam, V. N., 1994. "The long-run behavior of the relative price of primary commodities: Statistical evidence and policy implications," World Development, Elsevier, vol. 22(11), pages 1737-1745, November.
- Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996.
" Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics,"
Journal of Economic Growth,
Springer, vol. 1(3), pages 363-89, September.
- Cuddington, John T & Urzua, Carlos M, 1989. "Trends and Cycles in the Net Barter Terms of Trade: A New Approach," Economic Journal, Royal Economic Society, vol. 99(396), pages 426-42, June.
- Robert E. Lipsey, 1963. "Price and Quantity Trends in the Foreign Trade of the United States," NBER Books, National Bureau of Economic Research, Inc, number lips63-1, March.
- Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
- G. M. Meier, 1958. "International Trade And International Inequality," Oxford Economic Papers, Oxford University Press, vol. 10(3), pages 277-289.
- Taylor, Lance, 1981. "South-north trade and southern growth : Bleak prospects from the structuralist point of view," Journal of International Economics, Elsevier, vol. 11(4), pages 589-602, November.
- Andrew M. Warner, 1992. "Did the Debt Crisis Cause the Investment Crisis?," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1161-1186.
- Williamson, Jeffrey G., 1996. "Globalization, Convergence, and History," The Journal of Economic History, Cambridge University Press, vol. 56(02), pages 277-306, June.
- Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- Jagdish Bhagwati, 1958. "Immiserizing Growth: A Geometrical Note," Review of Economic Studies, Oxford University Press, vol. 25(3), pages 201-205.
When requesting a correction, please mention this item's handle: RePEc:ucp:ecdecc:y:2003:v:51:i:3:p:629-56. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.