TITLE:
Trends of Base Metals Prices
AUTHORS:
Nguyen Bao Anh, Aggey Semenov
KEYWORDS:
Base Metals Prices, Price Trends, Historical Price, Mining, Metals Industry, LME, CRS
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.4,
August
14,
2015
ABSTRACT: The real price of base metals exhibits a decreasing trend over time. We
model base metals prices as the equilibrium of aggregate supply and demand.
This allows us to study the effect of determinants of base metals prices. The
trend in the price of base metals depends on technological progress, resource
scarcity, natural resource taxes, and the interest rate. Under certain
parameter restrictions we can explain the decreasing trend in prices over time.
This phenomenon is mostly explained by the substitution effect and
technological progress. We derive policy implications related to natural
resource taxation.