Do Geopolitical Tensions and Economic Policy Uncertainties Reorient Mineral Imports in the USA? A Fat-Tailed Data Analysis Using Novel Quantile Approaches

Md. Monirul Islam, Kazi Sohag () and Faheem ur Rehman
Additional contact information
Faheem ur Rehman: Business School, NingboTech University, Ningbo 315000, China

Mathematics, 2022, vol. 11, issue 1, 1-25

Abstract: Mineral resources are essential raw materials to generate electricity, fuel vehicles, and heat homes and workplaces. Besides, the global agenda of clean energy deployment, including solar photovoltaics (PV), wind turbines, electric vehicles (EV), and storage facilities, calls for a considerable volume of critical minerals, which elevates their respective import demands. This highly concentrated source of those minerals poses a significant concern triggered by the augmented geopolitical tensions and economic policy uncertainties. In light of this context, our objective is to estimate the response of mineral import demand to global geopolitical risk events and economic policy uncertainty covering monthly data from January 1996 to December 2020. In doing so, we apply the cross-quantilogram (CQ) and the quantile-on-quantile (QQ) regression approaches due to the fat-tailed nature of the data property. Besides, these quantile-based data analysis procedures are appropriate for non-normal data sets and show the co-movement of the variables of interest under a bi-variate modelling approach. More importantly, these two techniques also exhibit the quantile connectedness among the variables in the bearish and bullish conditions. Moreover, our findings show that mineral import demand responds negatively to the USA’s (own) and global geopolitical risk events at the high quantiles under long memory. In addition, this demand reacts positively to the USA’s (own) and global economic policy uncertainty in entire quantiles under long memory. Therefore, our policy suggestions are concerned with tackling geopolitical tensions and economic policy uncertainty by adopting pre-emptive measures within a viable institutional mechanism to continue impressive mineral trade flows.

Keywords: mineral import demand; geopolitical risks; economic policy uncertainty; the cross-quantilogram; the quantile-on-quantile; USA (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-7390/11/1/180/pdf (application/pdf)
https://www.mdpi.com/2227-7390/11/1/180/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:11:y:2022:i:1:p:180-:d:1019135

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().