A note on the stationarity of the primary commodities relative price index

Abstract

The Prebisch-Singer hypothesis of a secular decline in the relative price of primary commodities is investigated searching for the presence of a deterministic rather than stochastic trend and controlling for major structural breaks. The evidence is in favour of a deterministic trend with a negative slope for the largest part of the century and a major structural break at the end of World War One. © 1991.