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

• Published in: Resources policy Vol. 76; p. 102685
• Main Authors: Xie, Mingting, Irfan, Muhammad, Razzaq, Asif, Dagar, Vishal
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01-06-2022; Elsevier Science Ltd
• Subjects: ARCH; Arches; Breitung-candelon spectral granger causality test; Causality; Economic analysis; Economic development; Economic growth; Economic performance; EGARCH; Forestry; Frequency domain analysis; Frequency domain causal approach; Impact analysis; Minerals; Natural resources; Natural resources volatility; TGARCH; Volatility; Wealth; ARCH; Frequency domain causal approach; Natural resources volatility; Breitung-candelon spectral granger causality test; EGARCH; TGARCH
• ISSN: 0301-4207; 1873-7641
• DOI: 10.1016/j.resourpol.2022.102685

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.
•The impact of mineral and forestry resources volatility on economic performance is examined.•Frequency domain causal approach is used.•Breitung-Candelon Spectral Ganger Causality test is also used.•Volatility for forest and mineral resources are diagnostic.•Uni-directional causality from resources volatility to economic performance is observed.