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The ‘Real’ Price of Primary Products

Published online by Cambridge University Press:  26 March 2020

G.F. Ray
G.F. Ray*
Affiliation:
National Institute of Economic and Social Research
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Abstract

This article traces the course of world commodity prices back to the middle of the 19th century and attempts to assess the changes in their purchasing value by deflating them by the export prices of manufactured goods. The purchasing power of commodity prices was in decline over long periods but they usually regained their earlier real value, or improved on it, in powerful upsurges of which the 1972-74 boom was the most recent; it was also unique in peacetime and, though with fluctuations, the purchasing value of commodities has since remained at a relatively high level.

Type
Articles
Information
National Institute Economic Review , Volume 81 , August 1977 , pp. 72 - 76
Copyright
Copyright © 1977 National Institute of Economic and Social Research

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References

(1) Source: The Economist. For recent explanations, see 2 March, 1974 and 6 September, 1975 issues.

(2) Source: National Institute Economic Review. A recent detailed description is given in the No. 63, February 1973 issue of the National Institute Economic Review. The main point is that The Economist index includes all primary pro ducts whereas the NIESR system only those exported by primary producing countries (and omits in its weighting those exported by primarily industrial countries).

(3) Source: UN Statistical Yearbooks.

(4) A. Maizels, Industrial growth and world trade, Cambridge University Press, 1963 (Table 4.1, page 80).

(1) The various index numbers have been linked to overcome changes of base years.