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The New View of Minerals and Economic Growth

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  • JOHN E. TILTON

Abstract

Resource economists have long been fascinated by the relationship between minerals and economic growth. This interest has historically been based in pan on the concern that mineral resources may someday constrain world economic growth, or worse, force a painful reduction in the living standards of the industrialized countries In recent years, however, a very different view of minerals and economic growth has emerged. This new view maintains that economic growth has over the last decade or two become ‘uncoupled’ or independent of minerals and other primary products. Economic growth no longer requires an increase in mineral consumption, and no longer stimulates the demand for metals and other mineral commodities. The new view offers an explanation for the stagnation in metal and mineral consumption since the early 1970s, and presumably was fostered by the depressed conditions of mineral markets over the past decade. An examination of the forces behind the stagnation, however, suggests that the new view is only partially correct Sectoral shifts, the rise of high technology products within manufacturing, resource‐saving technology, and material substitution have together caused intensity‐of‐use trends to deteriorate. As a result, metal consumption can now remain constant or even decline at the same time the economy is expanding, if rate of economic expansion is less than the rate of decline in intensity‐of‐use. While the relationship between minerals and economic growth has changed in recent years, the two are not independent Faster economic growth requires and stimulates faster growth (or a slower decline) in mineral consumption. This finding has implications for both the short‐ and long‐run behaviour of metal and mineral markets.

Suggested Citation

  • John E. Tilton, 1989. "The New View of Minerals and Economic Growth," The Economic Record, The Economic Society of Australia, vol. 65(3), pages 265-278, September.
  • Handle: RePEc:bla:ecorec:v:65:y:1989:i:3:p:265-278
    DOI: 10.1111/j.1475-4932.1989.tb00935.x
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    References listed on IDEAS

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    1. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-698, June.
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    Cited by:

    1. Jonathan Perraton, 2006. "Heavy Constraints on a “Weightless World”?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(3), pages 641-691, July.
    2. Jaunky, Vishal Chandr, 2013. "A cointegration and causality analysis of copper consumption and economic growth in rich countries," Resources Policy, Elsevier, vol. 38(4), pages 628-639.
    3. Krautkraemer, Jeffrey, 2005. "Economics of Natural Resource Scarcity: The State of the Debate," RFF Working Paper Series dp-05-14, Resources for the Future.
    4. Namahoro, Jean Pierre & Wu, Qiaosheng & Hui, Su, 2023. "Asymmetric linkage between copper-cobalt productions and economic growth: Evidence from Republic Democratic of Congo," Resources Policy, Elsevier, vol. 83(C).
    5. Alberto Quadrio Curzio & Fausta Pellizzari & Roberto Zoboli, 2011. "Resources and Technologies," CRANEC - Working Papers del Centro di Ricerche in Analisi economica e sviluppo economico internazionale crn1101, Università Cattolica del Sacro Cuore, Centro di Ricerche in Analisi economica e sviluppo economico internazionale (CRANEC).
    6. Namahoro, Jean Pierre & Qiaosheng, Wu & Hui, Su, 2022. "The copper production and economic growth nexus across the regional and global levels," Resources Policy, Elsevier, vol. 76(C).
    7. Yerramilli, C. & Sekhar, J.A., 2006. "A common pattern in long-term metals production," Resources Policy, Elsevier, vol. 31(1), pages 27-36, March.
    8. Krautkraemer, Jeffrey A., 2005. "Economics of Natural Resource Scarcity: The State of the Debate," Discussion Papers 10562, Resources for the Future.
    9. Zauresh Atakhanova & Peter Howie, 2020. "Metal intensity of use in the era of global value chains," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 101-113, July.
    10. Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.

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