Synopsis (short abstract)This paper explores the long–term trends in commodity prices and specifically the
proposition that there is a secular decline in the terms of trade between commodities and
manufactures as predicted by Prebisch and Singer. The paper reviews the data the
theoretical basis of the Prebisch–Singer hypothesis and the empirical evidence for its
validity or otherwise. Finally, some broad policy implications are drawn. Price volatility
is obviously an equally important policy issue that has attracted much attention since
2007 /08 but the focus here is on long–run price trends starting from 1900.