Unit roots, flexible trends, and the Prebisch-Singer hypothesis

. This paper studies the dynamic properties of relative commodity prices, especially the Prebisch-Singer hypothesis on their secular decline, using a new family of unit root tests based on the Fourier approximation to the data's underlying trend. The approximation controls for low-frequency variations such as structural breaks or the long swings induced by hypothesized super cycles in the data. Regarding the extant literature, we find considerably more evidence against nonstationarity in relative commodity prices, and very limited support for the Prebisch-Singer hypothesis.