Volatility in Natural Resources Commodity Prices on the Economic Growth of Chinese Economy: Does Coal and Oil Matter?

Volatility in Natural Resources Commodity Prices on the Economic Growth of Chinese Economy: Does Coal and Oil Matter?

Li Li

School of Finance and Accounting, Fuzhou University of International Studies and Trade, China

Abstract

Currently, volatility in the prices of natural resources commodities has become an international issue that requires the attention of recent literature and policymakers. Therefore, the current study investigates the impact of volatility in natural resources commodity (livestock, agriculture, coal, crude oil and precious metal) prices on the economic growth of the Chinese economy. The authors have used the secondary data and also used the E-views for the data analysis. The secondary data has been taken from the World Bank Indicators (WDI) and Goldman Sachs Commodity Index (GSCI) from 1981 to 2019. The researchers have examined the stationarity using Augmented Dickey-Fuller (ADF) test and tested the association between the variables using Error Correction Model (ECM). The results indicated that natural resources commodity (livestock, agriculture, coal, crude oil and precious metal) prices have a positive association with the economic growth of the Chinese economy. This article provides the guidelines to the policy development authorities while formulating regulations regarding natural resources commodity prices, and economic growth.

Keywords: Natural resources commodity prices, livestock, agriculture, coal, crude oil, precious metal, economic growth, the Chinese economy.