IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v88y2024ics0301420723011029.html
   My bibliography  Save this article

Is there a relationship between economic growth and natural resource commodity price volatility? Evidence from China

Author

Listed:
  • Zhang, Ru
  • Zhao, Wenhao
  • Wang, Yong

Abstract

The volatility of commodity prices of natural resources such as oil and coal is closely related to the economic growth of a country. This study examines the volatility of economic growth and natural resource commodity prices in China during 1980–2020 and the causal relationship between them using the wavelet power spectrum and wavelet coherence in the wavelet method. The results reveal the following. (1) The wavelet power spectrum uncovers strong fluctuations in economic growth and natural resource commodity prices, both susceptible to crisis events. (2) The wavelet coherence demonstrates a significant causal relationship between economic growth and natural resource commodity price volatility. Specifically, (a) there is a notable negative correlation between economic growth and WTI crude oil prices and coal rents. (b) There is a two-way causal relationship between economic growth and WTI crude oil prices and coal rents, and a one-way causal relationship between economic growth and total natural resource rents and oil rents. Finally, using frequency-domain causality tests as a robustness check confirmed a long-term causal relationship between economic growth and natural resource commodity prices. This study clarifies the relationship between economic growth and natural resource commodity price volatility and provides a scientific basis for formulating natural resource and economic policies.

Suggested Citation

  • Zhang, Ru & Zhao, Wenhao & Wang, Yong, 2024. "Is there a relationship between economic growth and natural resource commodity price volatility? Evidence from China," Resources Policy, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723011029
    DOI: 10.1016/j.resourpol.2023.104391
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723011029
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.104391?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723011029. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.