Although the empirical literature is not unanimous about the existence of a continuous long-term deterioration in the terms of trade for commodities (the original and most common formulation of the Prebisch- Singer hypothesis) and, hence, about the possibility of inferring their future behaviour on this basis, there is a consensus as to the sharp drop in the barter terms of trade, especially from the 1920s on. This paper presents a critical review of the theoretical and empirical literature on the subject and the implications for development strategies.
