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Super Cycles of Commodity Prices Since the Mid-Nineteenth Century

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  • Erten, Bilge
  • Ocampo, José Antonio

Abstract

Decomposition of real commodity prices suggests four super cycles during 1865–2010 ranging between 30 and 40years with amplitudes 20–40% higher or lower than the long-run trend. Non-oil price super-cycles follow world GDP, indicating they are essentially demand-determined; causality runs in the opposite direction for oil prices. The mean of each super-cycle of non-oil commodities is generally lower than for the previous cycle, supporting the Prebisch–Singer hypothesis. Tropical agriculture experienced the strongest and steepest long-term downward trend through the twentieth century, followed by non-tropical agriculture and metals, while real oil prices experienced a long-term upward trend, interrupted temporarily during the twentieth century.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:wdevel:v:44:y:2013:i:c:p:14-30
    DOI: 10.1016/j.worlddev.2012.11.013
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    More about this item

    Keywords

    super cycles; commodity prices; Prebisch–Singer hypothesis; band-pass filters;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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