Introduction

Abstract

The OECD rate of unemployment and primary commodity prices appear to be inextricably linked. As shown in Figure 1.1 the positive correlation is striking: both variables are roughly constant around the mean until 1972; thereafter they undergo two notable upward jumps in 1973 and again 1979 and finally fall in 1985–86. Between 1954 and 1991 the correlation index is as high as 0.94.