In this paper, we test the Prebish-Singer (PS) hypothesis, which states that real commodity prices decline in the long run, using two recent powerful panel data stationarity tests accounting for cross-sectional dependence and a structural break. We find that the hypothesis cannot be rejected for most commodities other than oil.
ASJC Scopus subject areas
- Economics and Econometrics
Arezki, R., Hadri, K., Kurozumi, E., & Rao, Y. (2012). Testing the Prebish-Singer hypothesis using second-generation panel data stationarity tests with a break. Economics Letters, 117(3), 814-816. https://doi.org/10.1016/j.econlet.2012.08.035