BIS Review 21/2004  5  Graph 7  I have made the point on several occasions in the past that the long period when Australia suffered a trend decline in its terms of trade (approximately from the beginning of the 20th century) probably came to an end in the mid 1980s.
Since, then the terms of trade have fluctuated, but around a generally rising trend. We should expect this upward trend will continue in the foreseeable future. The Reserve Bank Index of Commodity Prices shows that commodity prices have already risen appreciably over the past couple of years (when measured in a neutral numeraire).