Real Commodity Prices In The Long Run & The Penn Effect
Does this mean that the future will necessarily be the same? No, not necessarily, but probably because the same mechanisms that have held back commodity prices in the past will continue to be there, Namely, that whenever a commodity has increased in price, this has increased supply by increased exploration and extraction (or planting in the case of food commodities) as well as increasing demand for substitutes and technological solutions to use it more efficiently. All of this causes the price increases to be self-reserving.
However, it is possible that for slow growing economies in America, Europe and Japan relative commodity prices could rise, while they fall in fast growing economies in for example Asia excluding Japan. The reason is that the relative price level in weaker growing economies because of the Penn Effect will, either because of lower price inflation, depreciating currencies or a combination of the two. Since commodity prices are basically the same across the world, a falling relative general price level in weaker economies means that for them inflation adjusted commodity prices could rise while the relative increase in the price level of stronger economies means that for them inflation adjusted commodity prices.