Reconsideration of the Prebisch-Singer Hypothesis
- In this paper, the long-term price developments as well as the primary commodity terms of trade of the most important primary commodities are presented, together with the underlying reasons for these trends. It is discussed if the observed trends can provide a confirmation of the Prebisch-Singer Hypothesis. Thereafter, the terms of
trade of selected EU member countries are shown and the presumption is made, that the idea of the Prebisch-Singer Hypothesis can be used for the explanation of the
diverging terms of trade development of industrialized countries with different export structures. A possible cause lies in the differing specialization in specific export
sectors of these countries and the corresponding price developments of the exported
goods.