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Are Shocks To Aluminium Consumption Transitory Or Permanent?

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  • Jaunky, Vishal Chandr

Abstract

This paper investigates whether shocks to aluminium consumption for 36 countries over the period 1967-2010 are transitory or permanent. A variety of time-series and panel data unit root tests are employed. The presence of structural breaks is taken into account when performing those tests. Following the Narayan-Popp univariate unit root test, aluminium consumption series for approximately 77.8% of countries is found to follow a non-stationary process. However unit root tests tend to have low power when the time span is relatively short and the results should be treated with some caution. Most of the panel unit root tests also point towards similar process. While these shocks can be transmitted to other economic sectors, past behaviours of aluminium consumption cannot be used for forecasting purposes. Mineral policies will have a permanent impact on the long-run trend of aluminium consumption.

Suggested Citation

  • Jaunky, Vishal Chandr, 2013. "Are Shocks To Aluminium Consumption Transitory Or Permanent?," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 9(1-2), January.
    • Handle: RePEc:ags:reapec:264579
    DOI: 10.22004/ag.econ.264579
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