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Mineral commodity prices and economic growth: a case of Zimbabwe

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  • Kunofiwa Tsaurai

Abstract

The study investigated the relationship between mineral commodity prices and economic growth in Zimbabwe using autoregressive distributive lag (ARDL) framework. Theoretical literature says that the impact of commodity prices on economic growth depends on whether a country is a net commodity exporter or importer. Subsequent empirical studies showed quite conflicting and divergent views on the relationship between mineral commodity prices and economic growth. Moreover, prior research works on mineral prices-economic growth nexus have eluded Africa and Zimbabwe in particular. The F-bounds test found out that only the relationship between copper prices and economic growth were co-integrated. The findings of the causality test are twofold: changes in copper prices only affected Zimbabwe's economic growth in the long run whereas economic growth in Zimbabwe only influenced copper prices in the short run. The implication is that Zimbabwean authorities should invest more towards copper extraction in order to economically benefit from increase in copper prices.

Suggested Citation

  • Kunofiwa Tsaurai, 2018. "Mineral commodity prices and economic growth: a case of Zimbabwe," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 10(2), pages 153-169.
    • Handle: RePEc:ids:ijsuse:v:10:y:2018:i:2:p:153-169
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