Stochastic Trends and Structural Breaks in the Intensity of Metals Use

This research examines whether innovations in the relationship between metals demand and economic activity are of a deep nature, such that they have persistence, or whether such innovations are transitory, conditional on a break point resulting from the 1973 oil price shock. Evidence was found to suggest that, at least for some of the metals studied in this research, intensity of use is well represented as a stationary process after accounting for a break point at 1973. One interpretation of this result is that technological shocks are not as pervasive as one might have thought and that only extraordinary events have a measurably long-lasting influence on metals demand.