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The Terms Of Trade For Commodities In The Twentieth Century

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  • Jose Antonio Ocampo

    (United Nations)

  • Maria Angela Parra

    (United Nations)

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

  • Jose Antonio Ocampo & Maria Angela Parra, 2004. "The Terms Of Trade For Commodities In The Twentieth Century," International Trade 0402006, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0402006
    Note: Type of Document - pdf; prepared on Win98; to print on ECLAC Review, 79, April 2003; pages: 35; figures: 5
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    References listed on IDEAS

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    Cited by:

    1. Estrades, Carmen & Terra, María Inés, 2012. "Commodity prices, trade, and poverty in Uruguay," Food Policy, Elsevier, vol. 37(1), pages 58-66.
    2. Cécile Couharde & Vincent Géronimi & Armand Taranco, 2012. "Les hausses récentes des cours des matières premières traduisent-elles l'entrée dans un régime de prix plus élevés ?," Revue Tiers-Monde, Armand Colin, vol. 0(3), pages 13-34.
    3. Joseph V. Balagtas & Matthew T. Holt, 2009. "The Commodity Terms of Trade, Unit Roots, and Nonlinear Alternatives: A Smooth Transition Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 87-105.
    4. Graciela Laura Kaminsky & Pablo Vega-García, 2016. "Systemic And Idiosyncratic Sovereign Debt Crises," Journal of the European Economic Association, European Economic Association, vol. 14(1), pages 80-114, February.
    5. Ocampo, José Antonio & Parra, María Angela, 2007. "The dual divergence: growth successes and collapses in the developing world since 1980," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1938, December.
    6. Erten, Bilge & Ocampo, José Antonio, 2013. "Super Cycles of Commodity Prices Since the Mid-Nineteenth Century," World Development, Elsevier, vol. 44(C), pages 14-30.
    7. Terheggen, Anne, 2010. "The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain," MPRA Paper 37982, University Library of Munich, Germany.
    8. Konstantin M. Wacker, 2011. "The Impact of Foreign Direct Investment on Developing Countries’ Terms of Trade," WIDER Working Paper Series 006, World Institute for Development Economic Research (UNU-WIDER).
    9. Ghoshray, Atanu & Kejriwal, Mohitosh & Wohar, Mark E., 2011. "Breaking Trends and the Prebisch-Singer Hypothesis: A Further Investigation," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 120387, European Association of Agricultural Economists.
    10. Gonzalo Hernández, 2011. "Terms of Trade and Output Fluctuations in Colombia," UMASS Amherst Economics Working Papers 2011-04, University of Massachusetts Amherst, Department of Economics.
    11. Arslan Razmi & Robert Blecker, 2008. "Developing Country Exports of Manufactures: Moving Up the Ladder to Escape the Fallacy of Composition?," Journal of Development Studies, Taylor & Francis Journals, vol. 44(1), pages 21-48.
    12. Escaith, Hubert & Tamenu, Bekele, 2013. "Least-Developed Countries' Trade During the "Super-Cycle" and the Great Trade Collapse: Patterns and Stylized Facts," MPRA Paper 51997, University Library of Munich, Germany.
    13. Manuel Llorca-Jaña, 2014. "The impact of early nineteenth-century globalization on foreign trade in the Southern Cone: A study of British trade statistics," Investigaciones de Historia Económica (IHE) Journal of the Spanish Economic History Association, Asociacion Espa–ola de Historia Economica, vol. 10(01), pages 46-56.
    14. Ghoshray, Atanu, 2011. "A reexamination of trends in primary commodity prices," Journal of Development Economics, Elsevier, vol. 95(2), pages 242-251, July.
    15. Christine Mutz & Thomas Ziesemer, 2008. "Simultaneous estimation of income and price elasticities of export demand, scale economies and total factor productivity growth for Brazil," Applied Economics, Taylor & Francis Journals, vol. 40(22), pages 2921-2937.
    16. Balagtas, Joseph Valdes & Holt, Matthew T., 2006. "Unit Roots, TV-STARs, and the Commodity Terms of Trade: A Further Assessment of the Prebisch-Singer Hypothesis," 2006 Annual meeting, July 23-26, Long Beach, CA 21405, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Torres, Miguel & Hofman, André A., 2008. "ECLAC thinking in the CEPAL Review (1976-2008)," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    18. Yoshimichi Murakami & Nobuaki Hamaguchi, 2017. "Peripherality, Inequality, and Economic Development in Latin American Countries," Discussion Paper Series DP2017-08, Research Institute for Economics & Business Administration, Kobe University.
    19. Ocampo, José Antonio, 2007. "The macroeconomics of the Latin American economic boom," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    20. Araujo, Ricardo, 2013. "Assessing the Dynamics of Terms of Trade in a Model of Cumulative Causation and Structural Change," MPRA Paper 46049, University Library of Munich, Germany.
    21. Ocampo, José Antonio, 2008. "The impact of the global financial crisis on Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

    More about this item

    Keywords

    Commodity prices; terms of trade;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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