IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v161y2022ics0301421521006236.html
   My bibliography  Save this article

The importance of uranium prices and structural shocks: Some implications for Greenland

Author

Listed:
  • Arnaut, Javier L.

Abstract

Over the past decade, Greenland has lifted and restored its ban on uranium mining amid the uncertainty of global uranium prices. This article investigates the dynamic interrelations between uranium commodity prices and the impacts of structural shocks, sketching key economic implications for Greenland. Using a structural vector autoregressive model, this work analyses the changing relations between uranium prices, coal prices as well as real and financial variables from 1980 to 2019. The main findings are that the dynamics of uranium spot prices are diversely affected by shocks in combined real GDP, total electricity production from nuclear power, the interest rate, the real effective exchange rate, and the price of coal. The estimates also show that the pricing dynamics are important for future production and capital investment decisions. The analysis illustrates that despite the prevailing depressed uranium market, Greenland can still capitalize on future market developments. The country can anticipate benefiting from a short-run world supply disruption, a positive combination of macroeconomic shocks, and the long-term expansion of nuclear energy programs.

Suggested Citation

  • Arnaut, Javier L., 2022. "The importance of uranium prices and structural shocks: Some implications for Greenland," Energy Policy, Elsevier, vol. 161(C).
    • Handle: RePEc:eee:enepol:v:161:y:2022:i:c:s0301421521006236
    DOI: 10.1016/j.enpol.2021.112757
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421521006236
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2021.112757?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.

    References listed on IDEAS

    as
    1. Trieu, Luan Ho & Savage, Eric & Dwyer, Gavan, 1994. "A model of the world uranium market," Energy Policy, Elsevier, vol. 22(4), pages 317-329, April.
    2. A. Anzuini & M. J. Lombardi & P. Pagano, 2013. "The Impact of Monetary Policy Shocks on Commodity Prices," International Journal of Central Banking, International Journal of Central Banking, vol. 9(3), pages 125-150, September.
    3. Jeffrey A Frankel & Andrew K Rose, 2010. "Determinants of Agricultural and Mineral Commodity Prices," RBA Annual Conference Volume (Discontinued), in: Renée Fry & Callum Jones & Christopher Kent (ed.),Inflation in an Era of Relative Price Shocks, Reserve Bank of Australia.
    4. Sims, Christopher A. & Zha, Tao, 2006. "Does Monetary Policy Generate Recessions?," Macroeconomic Dynamics, Cambridge University Press, vol. 10(2), pages 231-272, April.
    5. Mjelde, James W. & Bessler, David A., 2009. "Market integration among electricity markets and their major fuel source markets," Energy Economics, Elsevier, vol. 31(3), pages 482-491, May.
    6. Jeffrey A. Frankel, 2008. "The Effect of Monetary Policy on Real Commodity Prices," NBER Chapters, in: Asset Prices and Monetary Policy, pages 291-333, National Bureau of Economic Research, Inc.
    7. O’Garra, Tanya, 2017. "Economic value of ecosystem services, minerals and oil in a melting Arctic: A preliminary assessment," Ecosystem Services, Elsevier, vol. 24(C), pages 180-186.
    8. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    9. Kahouli, Sondès, 2011. "Re-examining uranium supply and demand: New insights," Energy Policy, Elsevier, vol. 39(1), pages 358-376, January.
    10. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    11. Rooney, Matthew & Nuttall, William J. & Kazantzis, Nikolaos, 2015. "A dynamic model of the global uranium market and the nuclear fuel cycle," Resources Policy, Elsevier, vol. 43(C), pages 50-60.
    12. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    13. Considine, Timothy J., 2019. "The market impacts of US uranium import quotas," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    14. Amavilah, Voxi Heinrich S., 1995. "The capitalist world aggregate supply and demand model for natural uranium," Energy Economics, Elsevier, vol. 17(3), pages 211-220, July.
    15. Akram, Q. Farooq, 2009. "Commodity prices, interest rates and the dollar," Energy Economics, Elsevier, vol. 31(6), pages 838-851, November.
    16. Cho Khong, 2006. "Resources and energy security," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(02), pages 32-37, July.
    17. Lutz Kilian, 2013. "Structural vector autoregressions," Chapters, in: Nigar Hashimzade & Michael A. Thornton (ed.), Handbook of Research Methods and Applications in Empirical Macroeconomics, chapter 22, pages 515-554, Edward Elgar Publishing.
    18. Dittmar, Michael, 2012. "Nuclear energy: Status and future limitations," Energy, Elsevier, vol. 37(1), pages 35-40.
    19. Monnet, Antoine & Gabriel, Sophie & Percebois, Jacques, 2017. "Analysis of the long-term availability of uranium: The influence of dynamic constraints and market competition," Energy Policy, Elsevier, vol. 105(C), pages 98-107.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shi, Tao & Li, Chongyang & Zhang, Wei & Zhang, Yi, 2023. "Forecasting on metal resource spot settlement price: New evidence from the machine learning model," Resources Policy, Elsevier, vol. 81(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Papież, Monika & Śmiech, Sławomir, 2015. "Dynamic steam coal market integration: Evidence from rolling cointegration analysis," Energy Economics, Elsevier, vol. 51(C), pages 510-520.
    2. Shahriyar Aliyev & Evžen Kočenda, 2023. "ECB monetary policy and commodity prices," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 274-304, February.
    3. Śmiech, Sławomir & Papież, Monika & Dąbrowski, Marek A., 2015. "Does the euro area macroeconomy affect global commodity prices? Evidence from a SVAR approach," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 485-503.
    4. Ratti, Ronald A. & Vespignani, Joaquin L., 2013. "Crude oil prices and liquidity, the BRIC and G3 countries," Energy Economics, Elsevier, vol. 39(C), pages 28-38.
    5. Carolina Arteaga cabrales & Joan Camilo Granados Castro & Jair Ojeda Joya, 2011. "The Effect of Monetary Policy on Commodity Prices: Disentangling the Evidence for Individual Prices," Borradores de Economia 9199, Banco de la Republica.
    6. Kilian, Lutz & Zhou, Xiaoqing, 2022. "Oil prices, exchange rates and interest rates," Journal of International Money and Finance, Elsevier, vol. 126(C).
    7. Ratti, Ronald A. & Vespignani, Joaquin L., 2014. "Oil prices and the economy: A global perspective," MPRA Paper 59407, University Library of Munich, Germany.
    8. Jin, Jiayu & Han, Liyan & Xu, Yang, 2022. "Does the SDR stabilize investing in commodities?," International Review of Economics & Finance, Elsevier, vol. 81(C), pages 160-172.
    9. Papież, Monika & Śmiech, Sławomir & Dąbrowski, Marek A., 2014. "The impact of the Euro area macroeconomy on energy and non-energy global commodity prices," MPRA Paper 56663, University Library of Munich, Germany.
    10. Wang, Xunxiao, 2020. "Frequency dynamics of volatility spillovers among crude oil and international stock markets: The role of the interest rate," Energy Economics, Elsevier, vol. 91(C).
    11. Wan, Jer-Yuh & Kao, Chung-Wei, 2015. "Interactions between oil and financial markets — Do conditions of financial stress matter?," Energy Economics, Elsevier, vol. 52(PA), pages 160-175.
    12. Marco Lombardi & Chiara Osbat & Bernd Schnatz, 2012. "Global commodity cycles and linkages: a FAVAR approach," Empirical Economics, Springer, vol. 43(2), pages 651-670, October.
    13. Vespignani, Joaquin L. & Ratti, Ronald A., 2016. "Not all international monetary shocks are alike for the Japanese economy," Economic Modelling, Elsevier, vol. 52(PB), pages 822-837.
    14. Boehm, Hannes & Eichler, Stefan & Giessler, Stefan, 2021. "What drives the commodity-sovereign risk dependence in emerging market economies?," Journal of International Money and Finance, Elsevier, vol. 111(C).
    15. Keller, Michael, 2020. "Wasted windfalls: Inefficiencies in health care spending in oil rich countries," Resources Policy, Elsevier, vol. 66(C).
    16. Ratti, Ronald A. & Vespignani, Joaquin L., 2013. "Liquidity and crude oil prices: China's influence over 1996–2011," Economic Modelling, Elsevier, vol. 33(C), pages 517-525.
    17. Vespignani, Joaquin L. & Ratti, Ronald A., 2013. "Chinese Monetary Expansion and the US Economy," Working Papers 16874, University of Tasmania, Tasmanian School of Business and Economics, revised 05 Aug 2013.
    18. Lang, Korbinian & Auer, Benjamin R., 2020. "The economic and financial properties of crude oil: A review," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    19. Bakas, Dimitrios & Triantafyllou, Athanasios, 2018. "The impact of uncertainty shocks on the volatility of commodity prices," Journal of International Money and Finance, Elsevier, vol. 87(C), pages 96-111.
    20. Ratti, Ronald A. & Vespignani, Joaquin L., 2016. "Oil prices and global factor macroeconomic variables," Energy Economics, Elsevier, vol. 59(C), pages 198-212.

    More about this item

    Keywords

    Uranium; Energy commodity prices; Greenland; Structural vector autoregression;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    Statistics

    Access and download statistics

    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:enepol:v:161:y:2022:i:c:s0301421521006236. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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/enpol .

    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.