Prebisch-Singer Thesis: Does the recent rise in primary commodity prices invalidate the Prebisch-Singer-Thesis?
Today we have two major approaches when it comes to trade policies. The first block is promoting a free-trade policy. The main argument here is, that everyone is better off, if they were specialise in products in which they have a comparative advantage (Ricardian thinking). Against Ricardo’s basic idea of free trade and comparative advantages argues the Prebisch-Singer thesis. The Prebisch-Singer thesis (referred to hereafter as P-S thesis) argues that especially developing countries are not better off by specialisation in that what they can do best. This thesis has shown that developing countries rather suffer from it specialisation of producing primary commodities than benefit from, at least when we talk about a time period of the last century. But this long-term deterioration in the commodity prices came to an end by the year 2002, where we have seen a tremendous comeback of the commodity markets. The prices of primary commodities such as wheat, cooper and crude-oil etc. have risen very sharply in the last years. The effect for many developing countries, which mainly produces such primary commodities benefits extremely from this recent development. Does this commodity boom means that the P-S thesis is not valid anymore or can we compare this recent boom in the primary commodity sector with the situation in the early 1970, where we could also see a sharp increase in commodity prices and after a while the primary commodity prices continues its long-term downward trend?
What people are saying - Write a review
We haven't found any reviews in the usual places.
Other editions - View all
According to UNCTAD agriculture commodities agriculture output asset become more independent biofuel Brazil cattle cycle China and India commodity boom commodity market comparative advantage crude oil crude petroleum debate over trends declining terms demand for primary demand side developed and developing developing countries development and international Development Economics development report Economics and Policy enormous pressure especially in China finally lead Food Summit granary Greenaway harvest high profits higher http://www.unctad.org/en/docs/tdr2006_en.pdf increase interest in commodities invest Kiews Kornkammer kilogram Kornkammer vor neuer last argument level of competition long-term deterioration long-term downward trend market structure mid-class mid-west natural disasters neuer Blüte Olearchyk overcapacities P-S thesis percentage change Prebisch Prebisch-Singer thesis price of manufactured price of primary primary commodity prices primary commodity producers primary commodity sector primary products Ricardian thinking risen Sapsford seen a strong Singer specialisation strong growth terms of trade Trade and development Validity Wagstyl wheat world economy world market