Trends in the Terms of Trade of Primary Commodities, 1900-1982: The Controversy and Its Origins

Abstract

Primary commodity markets have offered an opportunity for much economic debate on a number of key issues. First, secularly declining terms of trade of primary commodities are used to explain the widening gap between developing (LDCs) and developed countries (DCs). Second, they are regarded as a contributing factor to the creation of a structural condition of unequal exchange between a "dominating" industrial center and a "dominated" agrarian periphery. And third, they are thought to be a source of instability, often causing financial vulnerability to foreign exchange equilibria and fragility to international market institutions.