The prebisch‐singer terms of trade controversy revisited

Abstract

Abstract The controversy surrounding the long‐run trend in the terms of trade between primary products and manufactured goods is a topic which continues to attract considerable research attention. This paper provides a detailed review of the controversy and offers a re‐examination of the statistical evidence. The results reported in this paper raise serious doubts regarding Cuddington and Urzua's (1989) conclusion that, apart from an abrupt drop after 1920, the net barter terms of trade have been trendless over the twentieth century.