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Returning to an external debate: the terms of trade for commodities in the twentieth century

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  • Ocampo, José Antonio
  • Parra, María Angela

Abstract

This paper looks at the evolution of the terms of trade between commodities and manufactures in the twentieth century. A statistical analysis of the relative price series for 24 commodities and of eight indices reveals a significant deterioration in their barter terms of trade over the course of the twentieth century. This decline was neither continuous, nor was it distributed evenly among individual products, however. The data show that the far-reaching changes that the world economy underwent around 1920 and again around 1980 led to a stepwise deterioration which, over the long term, was reflected in a decline of nearly 1% per year in aggregate real prices for raw materials.

Suggested Citation

  • Ocampo, José Antonio & Parra, María Angela, 2003. "Returning to an external debate: the terms of trade for commodities in the twentieth century," Series Históricas 7797, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col048:7797
    Note: Includes bibliography
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    2. Gustavo Anríquez & Kostas Stamoulis, 2007. "Rural development and poverty reduction: is agriculture still the key?," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 4(1), pages 5-46.
    3. Bastourre, Diego, 2008. "Cambio fundamental o especulación financiera en los mercados de commodities? Un modelo con ajuste no lineal al equilibrio [Structural break or financial speculation in commodity markets? A multivar," MPRA Paper 9910, University Library of Munich, Germany.
    4. S. V. Zhukov & I. A. Kopytin & A. O. Maslennikov & M. V. Sinitsyn, 2023. "Oil Exporting Countries: Analysis of Economic Growth Opportunities Through Export Diversification in a Low-Carbon World," Studies on Russian Economic Development, Springer, vol. 34(5), pages 573-582, October.
    5. Lorenzo Nalin & Giuliano Toshiro Yajima, 2021. "Commodities fluctuations, cross border flows and financial innovation: A stock‐flow analysis," Metroeconomica, Wiley Blackwell, vol. 72(3), pages 539-579, July.
    6. Diego Bastourre, 2008. "Inversores Financieros en los Mercados de Commodities: Un Modelo con Dinámica de Ajuste no Lineal al Equilibrio," Department of Economics, Working Papers 072, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    7. Trofimov, Ivan D., 2018. "Income terms of trade and economic convergence: Evidence from Latin America," MPRA Paper 87598, University Library of Munich, Germany.
    8. Giuliano Toshiro Yajima, 2022. "Chile: The road to joy is paved with obstacles," PSL Quarterly Review, Economia civile, vol. 75(302), pages 285-297.
    9. Tobias Kronenberg, 2008. "Should We Worry About The Failure Of The Hotelling Rule?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(4), pages 774-793, September.
    10. Geronimi, Vincent & Taranco, Armand, 2018. "Revisiting the Prebisch-Singer hypothesis of a secular decline in the terms of trade of primary commodities (1900–2016). A dynamic regime approach," Resources Policy, Elsevier, vol. 59(C), pages 329-339.
    11. Jonathan Perraton, 2006. "Heavy Constraints on a “Weightless World”?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(3), pages 641-691, July.
    12. Giuliano Toshiro Yajima, 2022. "Chile: The Road to Joy Is Paved with Obstacles," Economics Policy Note Archive 22-3, Levy Economics Institute.
    13. Trofimov, Ivan D., 2018. "The secular decline in profit rates: time series analysis of a classical hypothesis," MPRA Paper 88248, University Library of Munich, Germany.
    14. Shouvik Chakraborty & Prabirjit Sarkar, 2020. "From The Classical Economists To Empiricists: A Review Of The Terms Of Trade Controversy," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 1111-1133, December.

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