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Full-Text Articles in Social and Behavioral Sciences
Breaking Trends And The Prebisch-Singer Hypothesis: A Further Investigation, Atanu Ghoshray, Mohitosh Kejriwal, Mark E. Wohar
Breaking Trends And The Prebisch-Singer Hypothesis: A Further Investigation, Atanu Ghoshray, Mohitosh Kejriwal, Mark E. Wohar
Economics Faculty Proceedings & Presentations
This paper examines the Prebisch-Singer Hypothesis employing new time series procedures that are robust to the nature of persistence in the commodity price shocks, thereby obviating the need for unit root pretesting. Specifically, the procedures allow consistent estimation of the number of structural breaks in the trend function as well as facilitate the distinction between trend breaks and pure level shifts. In comparison with past studies, we find fewer cases of commodities that display negative trends thereby weakening the case for the Prebisch-Singer Hypothesis. Finally, a new set of powerful unit root tests allowing for structural breaks under both the …