LONG-RUN TRENDS IN 26 PRIMARY COMMODITY PRICES - A DISAGGREGATED LOOK AT THE PREBISCH-SINGER HYPOTHESIS

This paper uses time series techniques to re-examine the Prebisch-Singer hypothesis that there has been a secular deterioration in primary commodity prices in terms of manufactured goods. Instead of using price indices, it considers 26 individual commodity prices over the period 1900-1983. This avoids possible aggregation and interpretation problems associated with the use of aggregate indices. The study finds that 16 of the 26 prices are trendless. Five have statistically significant negative trends; the remaining five have positive trends. It concludes that the Prebisch-Singer hypothesis should certainly not be considered a universal phenomenon or 'stylized fact'.