A General Test of the Prebisch-Singer Hypothesis

Posted: 25 Aug 1998

See all articles by Matthias Lutz

Matthias Lutz

Swiss National Bank; University of St. Gallen


This paper jointly examines the Prebisch-Singer hypothesis of a long-term decline in the relative price of primary commodities and the appropriate framework in which it is tested. A general model is estimated which nests the univariate and bivariate time-series models used in the past literature. The results suggest that the econometric models estimated in the majority of previous studies were misspecified. The evidence strongly supports the Prebisch-Singer hypothesis and rejects recent findings--that the terms of trade are characterized by infrequent negative shocks--in favor of a long-term negative trend.

JEL Classification: C12, L10

Suggested Citation

Lutz, Matthias, A General Test of the Prebisch-Singer Hypothesis. Available at SSRN: https://ssrn.com/abstract=114725

Matthias Lutz (Contact Author)

Swiss National Bank ( email )

Borsenstrasse 15
Zurich, 8022
+41 44 631 36 19 (Phone)

University of St. Gallen ( email )

Bodanstrasse 1
CH-9000 St. Gallen
+41/71/224 23 11 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics