Non-Renewable Resource Extraction over the Long Term: Empirical Evidence from Global Copper Production

Martin Stuermer

MPRA Paper from University Library of Munich, Germany

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 drove most of the increase in the level of copper output. 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 three percent unexpected expansion of the global economy due to rapid industrialization causes a ten percent rise in the real copper price, incentivizing a five percent increase in global copper production. The paper 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)
JEL-codes: C32 N5 N50 Q31 Q33 (search for similar items in EconPapers)
Date: 2022-09-27
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Citations: View citations in EconPapers (2)

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Journal Article: Non-renewable resource extraction over the long term: empirical evidence from global copper production (2022)
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