EconPapers    
Economics at your fingertips  
 

Industrialization and the demand for mineral commodities

Martin Stuermer

Journal of International Money and Finance, 2017, vol. 76, issue C, 16-27

Abstract: This paper uses a new data set that begins in 1840 to investigate how industrialization affects the derived demand for mineral commodities. I establish that there is substantial heterogeneity in the long-run effect of manufacturing output on demand across five commodities. A one percent increase in per capita manufacturing output leads to an approximately 1.5 percent increase in aluminum demand and a roughly 1 percent rise in copper demand. Estimated elasticities for lead, tin, and zinc are below unity. My results suggest that the experience of Japan and South Korea’s industrialization, for example, may be used to infer the impact of China’s industrialization on future demand for metals. The results imply substantial differences across commodities with regard to future demand. Adjustment to equilibrium takes 7–13years, which helps explain the long duration of commodity price fluctuations.

Keywords: Commodities; Non-renewable resources; Elasticity of demand; Non-homothetic preferences; Nonstationary heterogenous panel (search for similar items in EconPapers)
JEL-codes: N50 O13 Q31 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560617300918
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Industrialization and the demand for mineral commodities (2014) Downloads
Working Paper: Industrialization and the demand for mineral commodities (2013) Downloads
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:eee:jimfin:v:76:y:2017:i:c:p:16-27

DOI: 10.1016/j.jimonfin.2017.04.006

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-31
Handle: RePEc:eee:jimfin:v:76:y:2017:i:c:p:16-27