Prebisch and Singer found a fall in the prices of developing countries primary commodities relative to those of British manufactured goods. From their work three branches of literature emerged. First, a statistical debate did arise in regard to the question whether or not developing country s terms of trade are really falling. Second, a series of theoretical models were developed in which terms of trade changes over time could be explained. Third, the policy consequences of falling terms of trade were discussed, mainly the question whether a fall in the terms of trade should lead to industrialization policies. Our paper tries to contribute to the first branch of literature.

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