The chart was by now sporting a decadelong average, to emphasise not just the level of the terms of trade but the persistence of the episode – even though we were not assuming it was “permanent”. Graph 2  The terms of trade had, however, finally started to decline. It has been a standard assumption since then that they would fall further.
And so they have. In the latest version of the chart, the terms of trade have fallen by about 13 per cent since two years ago and by 22 per cent since their peak (Graph 3).