The quantity of steel consumed can be considered as an indicator of industrial development as nations move to higher stages of industrialization, since the steel consumption has been thought to be closely linked to the rate of economic growth, which influences the level of activity in steel intensive sectors (Huh, 2011). After the World War II, the worldwide metal consumption increased rapidly and, this led to a concern about the supply of metals and a fear of early depletion (Wårell, 2014). As part of a broader effort to develop simple but accurate techniques for forecasting the future demand for metals, the International Iron and Steel Institute (1972) and Malenbaum (1973) suggested the intensity of use hypothesis during the 1970s. This hypothesis maintains that the intensity of metal use is a function of economic development as measured by real GDP (Guzmán et al. 2005). Intensity of use curve rises, peaks, and then decline as per capita income increases. For this hypothesis the intensity of metal use depends on the economic development in a country and changes over the development stages of the economy. Therefore the relationship between intensity of metal use and economic development exhibits an inverted U-shaped pattern. The main purpose of this study is to test the intensity of (steel) use hypothesis for Turkey during the period 1955-2012 using the cointegration technique with structural break. Given the dataset and time series techniques used, results indicate that the steel consumption and real GDP have the long-run relationship.
“Dutch Disease” phenomenon is defined as the increase in the price of natural resources, such as oil and natural gas, which causes the appreciation of the real exchange rate and leads to the decline of manufacturing and ultimately to increases in service prices. Since the 1980s there has been a great body of “Dutch Disease” empirical literature, and as a natural resource-rich country Russia is a good case for the exploration of this phenomenon. The Russian economy experienced some difficulties after the collapse of the Soviet Union in the adaptation to a free market economy model. In the process of moving towards a free market economy, Russia failed to diversify its economic structure despite increases in natural resource revenues. In the last decades, while the share of natural resources in export revenues has significantly increased, the share of manufacturing output has decreased. According to the United Nations Development Program Russia report 2009, increases in energy income have resulted in the decline of other sectors of the Russian economy. Furthermore, the report claims that these indicators may trigger a recession in the Russian economy in the future. In fact, in recent years the Russian economy has exhibited some typical symptoms of “Dutch Disease” along with increases in oil prices accompanied by a reduction in the share of manufacturing output and an increase in service prices. Using Gregory Hansen cointegration method, this paper finds that Russia is in fact might be suffering from the “Dutch Disease” in the post Soviet Union-era.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.