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Fagseminar: Induced Biased Innovation and Exhaustible Resource Prices

Åpent fagseminar på Handelshøgskolen ved UiS.

Alle interesserte er velkomne til delta på de åpne fagseminarene på Handelshøgskolen ved UiS.

På dette seminaret vil professor Daniel V. Gordon ved University of Calgary presentere sin artikkel:

Induced Biased Innovation and Exhaustible Resource Prices
 

Abstract:

This paper tests a prediction from endogenous growth theory regarding the rate at which commodity prices in exhaustible resource markets grow. Induced biased endogenous growth theory suggests that innovation is more likely to occur in markets in which the gains from innovation are large. Those tend to be markets for which the size of the market is large. Thus, if endogenous innovation drives economic growth, and if innovation is of the cost-reducing form, commodity prices are more likely to decline when the size of the world value product of the commodity is large.

The hypothesis is tested using an unbalanced panel of 80 mineral commodities annual price growths over the period 1900-2006. The model is corrected for clustered residuals and a panel instrumental estimator is used in estimation. We find statistical support for the prediction, which is robust to alternative specifications of the model, minerals used in estimation and time period studied.