On the Deterioration of the Net Barter Terms of Trade for Primary Commodities

This paper is divided into two parts. The first part reviews the theoretical arguments that have surrounded the issue of the deterioration in the terms of trade since the 1950s. The second part reviews critically some of the most important methods used to test the hypothesis of deterioration in the terms of trade for primary commodities. New tests for the periods 1948-1989 and 1921-1986 are presented. The results support the hypothesis that there is a long-term deterioration in the terms of trade for primary commodities.