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What is extracted from earth is gold: are rare earths telling a new tale to economic growth?

Emmanuel Apergis (Business School, University of Kent, Canterbury, UK)
Nicholas Apergis (Department of Banking and Financial Management, University of Piraeus, Piraeus, Greece)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 8 January 2018

679

Abstract

Purpose

The purpose of this paper is to explore, for the first time, the relationship between the prices of rare earth materials and economic growth. Renewable technologies and many high-demanded technologies need significant supplies of such materials.

Design/methodology/approach

The paper uses a panel of the six most significant rare earth producers around the globe, as well as certain panel methodologies.

Findings

The empirical analysis indicates the presence of a positive impact of such minerals prices on economic growth. Causality methodologies also indicate unidirectional causality between GDP and the prices of rare earth materials, with the causality running from these prices to economic growth. The findings survive a number of robustness checks.

Originality/value

The claim that natural resources are a curse that makes the countries worse off is not supported for the case of rare earth materials. The results are expected to be of high importance, because these particular rare earth materials are extensively used in a huge list of technological products with high demand and low costs, while they are hard to be replaced.

Keywords

Citation

Apergis, E. and Apergis, N. (2018), "What is extracted from earth is gold: are rare earths telling a new tale to economic growth?", Journal of Economic Studies, Vol. 45 No. 1, pp. 177-192. https://doi.org/10.1108/JES-05-2017-0114

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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