Kerala Economic Review 2010

Abstract

Something unprecedented is happening in the world economy. The entire advanced capitalist world is sunk in recession and mass unemployment, and when this happens the terms of trade usually move against the primary commodities; but what we find today is an upsurge in primary commodity prices. The food price inflation that is occurring everywhere including in India, and that has produced food riots in several third world countries and contributed to the popular uprisings across the Arab world, is a major component of this upsurge, which began in 2008. It subsided, though not to the pre-2008 level, in 2009, but has resumed thereafter.