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What is extracted from earth is gold: are rare earths telling a new tale to economic growth?

Emmanuel Apergis () and Nicholas Apergis ()

Journal of Economic Studies, 2018, vol. 45, issue 1, 177-192

Abstract: Purpose - The purpose of this paper is to explore, for the first time, the relationship between the prices of rare earth materials and economic growth. Renewable technologies and many high-demanded technologies need significant supplies of such materials. Design/methodology/approach - The paper uses a panel of the six most significant rare earth producers around the globe, as well as certain panel methodologies. Findings - The empirical analysis indicates the presence of a positive impact of such minerals prices on economic growth. Causality methodologies also indicate unidirectional causality between GDP and the prices of rare earth materials, with the causality running from these prices to economic growth. The findings survive a number of robustness checks. Originality/value - The claim that natural resources are a curse that makes the countries worse off is not supported for the case of rare earth materials. The results are expected to be of high importance, because these particular rare earth materials are extensively used in a huge list of technological products with high demand and low costs, while they are hard to be replaced.

Keywords: Resource curse; Economic growth; Rare earth prices; O44; Q31; Q34; C33 (search for similar items in EconPapers)
Date: 2018
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