Non-renewable resource extraction over the long term: empirical evidence from global copper production

Martin Stuermer

Mineral Economics, 2022, vol. 35, issue 3, No 19, 617-625

Abstract: Abstract Global mine production of copper has risen more than 80 times over the last 135 years. What were the main drivers? I examine this question based on copper market data from 1880 to 2020. I employ a structural time series model with sign restrictions to identify demand and supply shocks. I find that a deterministic trend drives most of the output growth. At the same time, unpredictable demand and supply shocks caused substantial fluctuations around the trend. A global commodity demand shock that is, for example, linked to a 3% unexpected expansion of the global economy due to rapid industrialization causes a 10% rise in the real copper price, incentivizing a 5% increase in global copper production. This provides empirical evidence for the feedback control cycle of mineral supply.

Keywords: Structural vector autoregression; Copper production; Non-renewable resources; Metals (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s13563-022-00352-0

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