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Industrial Metal Supply Shocks and Heterogeneous Macroeconomic Effects: Evidence from Copper

Author

Listed:
  • Andrea Bastianin

    (University of Milan and Fondazione Eni Enrico Mattei)

  • Luca Rossini

    (University of Milan and Fondazione Eni Enrico Mattei)

  • Alessandra Testa

    (Fondazione Eni Enrico Mattei)

Abstract

This paper studies the macroeconomic effects of global copper supply shocks. We identify exogenous disruptions to copper supply using a Bayesian structural VAR of the world copper market that combines sign and narrative restrictions. We then trace the international transmission of the identified shock using a two-step approach based on country-level models for major copper-importing and exporting economies. We find that copper supply shocks raise producer prices and depress industrial activity in importing economies, while exporters benefit from higher world prices through improved terms of trade. Importer-exporter status alone is insufficient to characterize exposure: heterogeneity in responses reflects differences in manufacturing copper intensity and buffering capacity through secondary copper production.

Suggested Citation

  • Andrea Bastianin & Luca Rossini & Alessandra Testa, 2026. "Industrial Metal Supply Shocks and Heterogeneous Macroeconomic Effects: Evidence from Copper," Working Papers 2026.02, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2026.02
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    References listed on IDEAS

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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