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Industrialization and the demand for mineral commodities

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  • Martin Stuermer

Abstract

This paper uses a new data set extending back to 1840 to investigate how industrialization affects the derived demand for mineral commodities. I establish that there is substantial heterogeneity in the long-run effect of manufacturing output on demand across five commodities after controlling for sectoral change, substitution and technological development. My results imply substantial differences across commodities with regard to future demand from industrializing countries and with regard to the effect of demand shocks on prices. Models should include non-Gormand preferences to account for this heterogeneity.

Suggested Citation

  • Martin Stuermer, 2014. "Industrialization and the demand for mineral commodities," Working Papers 1413, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:feddwp:1413
    DOI: 10.24149/wp1413
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    More about this item

    Keywords

    Commodities; non-renewable resources; elasticity of demand; non-homothetic preferences; nonstationary heterogenous panel;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices

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