A New Contribution in the Statistical Debate Over Trends in the Net Barter Terms of Trade Between Primary Commodities and Manufactures

This paper presents some new evidence in the statistical debate surrounding the Prebisch-Singer hypothesis of a declining long-run trend in the net barter terms of trade between primary products and manufactures. The paper analyses data from a variety of sources covering the period up to and including the early 1980s and finds evidence of a structural instability in the underlying growth path. Once appropriate action is taken to allow for this instability, some strong empirical support for the declining trend hypothesis emerges.