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Forest and mineral volatility and economic performance: Evidence from frequency domain causality approach for global data

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  • Xie, Mingting
  • Irfan, Muhammad
  • Razzaq, Asif
  • Dagar, Vishal

Abstract

It is evident that countries with abundant natural resources have comparatively higher wealth sources. However, there is no conclusive evidence regarding the impact of natural resources on economic performance. Therefore, this study aims to analyze the impact of mineral and forestry resources volatility on economic performance using a frequency domain causality approach and Breitung-Candelon spectral ganger causality for global data. For this purpose, we employ Autoregressive conditional heteroskedasticity (ARCH), Threshold Generalized ARCH (TARCH), and the exponential general ARCH (EGARCH) methods. The results confirm an uni-directional causality from mineral and forestry resources volatility to economic performance in the short, medium, and long run. There is no feedback effect observed from economic growth to volatility in mineral and forestry resources. The results suggest that sustainable use of material resources is imperative to achieve green growth agenda.

Suggested Citation

  • Xie, Mingting & Irfan, Muhammad & Razzaq, Asif & Dagar, Vishal, 2022. "Forest and mineral volatility and economic performance: Evidence from frequency domain causality approach for global data," Resources Policy, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:jrpoli:v:76:y:2022:i:c:s0301420722001337
    DOI: 10.1016/j.resourpol.2022.102685
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