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Financial market developments and the minerals industry

Author

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  • Raputsoane, Leroi

Abstract

This paper analyses the reaction of the minerals industry to financial market developments in South Africa. This is achieved by augmenting a Taylor 1993 rule type central bank monetary policy reaction function with the Johannesburg Stock Exchange (JSE), or financial market, index. The empirical results provide evidence of a statistically significant effect of an increase in financial market index on output of the minerals industry, which increases and peaks after 3 months, where this effect is statistically significant up to 5 months. The results further show that following an increase in output of the minerals industry, the financial market index increase slightly and peaks after 2 months as well as after 8 months with a statistically significant effect up to 2 months and between 8 and 10 months. Financial markets are, thus, important for the minerals industry hence policymakers should reduce impediments to financial market development given that a well functioning and regulated financial market has an important role in supporting aggregate economic activity as well as the minerals industry.

Suggested Citation

  • Raputsoane, Leroi, 2025. "Financial market developments and the minerals industry," MPRA Paper 124271, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:124271
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    More about this item

    Keywords

    Financial market; Minerals industry; Economic cycles;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources

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