THE TERMS OF TRADE FOR COMMODITIES SINCE THE MID-19TH CENTURY

This paper shows that there was an improvement in the barter terms of trade for non-fuel commodities vs. manufactures in the late 19(th) and early 20(th) centuries, followed by significant deterioration over the rest of the 20(th) century. However, the decline over most of the 20(th) was neither continuous nor was it distributed evenly among different commodity groups. The far-reaching changes that the world economy underwent around 1920 and again around 1979 led to a stepwise deterioration which, over the long term, was reflected in roughly a halving of real commodity prices. Tropical agriculture fared the worst, whereas minerals had the best performance, with non-tropical agriculture in an intermediate situation. The increase experienced in the first decade of the 21(st) century may be the beginning of a long-term upward trend, but it is too soon to tell.