Q32 - Exhaustible Resources and Economic DevelopmentReturn

There is a growing recognition of the importance of sustainable development. Political economy factors and natural resources are considered important sources of economic prosperity. These are the fundamental primary resources utilized in the production process, which subsequently drives economic activities and results in sustained growth. Nevertheless, resource-rich countries often experience sustainability challenges. This study examines the impact of mineral resource rents on sustainable development in selected developed countries from a political economy perspective. Moreover, we include renewable energy deployment and fiscal decentralization as additional determinants of sustainable development. The study uses random-effects and fixed-effects estimation methods to estimate the model. The study also uses quantile regression econometric techniques. A sustainable development index (SDI), integrating economic, social and environmental dimensions, is constructed as the dependent variable. The results reveal that mineral resource rents and renewable energy electricity output negatively affect sustainable development. Nevertheless, environment-related taxes and fiscal decentralization positively affect sustainable development. These results provide valuable insights for academia, researchers and policy makers aiming to achieve environmental sustainability through institutional and fiscal reforms.

This study investigates the impact of economic globalization, geopolitical risk and natural resources on carbon emissions (CO₂) in Turkey, while controlling for economic development and renewable energy. The study uses annual data from 1970 to 2019 and employs a quantile-on-quantile-based regularized least squares (QQKRLS) approach. The findings confirm a weak positive association between economic globalization and CO₂ emissions at low and high quantiles, while this association becomes strong at quantiles from 0.40 to 0.65 of both variables. The study also confirms an overall positive association between geopolitical risk and CO₂ emissions; however, this correlation becomes stronger at quantiles from 0.40 to 0.80 for both variables. In addition, the study also finds an overall inverse relationship between natural resource rents and CO₂ emissions, except for extremely low quantiles of both variables, where the correlation becomes positive. To strengthen the reliability of our results, the study utilizes a non-parametric bivariate quantile-on-quantile regression (QQR) method for a robustness check. Based on the findings, it is recommended that policymakers encourage green trade practices and promote climate change action initiatives by starting joint clean projects to make this world cleaner for current and future generations.

The digital economy is unquestionably a globally recognized priority among countries, yet comprehensive scholarly discussions on the specific determinants driving its growth remain relatively limited. To fill this gap, the present study pioneers an investigation into how research and development, natural resources and economic policy uncertainty influence the digital economy in the United States of America (USA), using data from 1996Q1 to 2020Q4. Given the nonlinear and non-normal distribution of the data, the study employs a series of quantile-based approaches, particularly the wavelet quantile-on-quantile regression (WQQR). The results of the WQQR reveal that research and development, globalization, economic growth and economic policy uncertainty positively affect the digital economy, while the abundance of natural resources appears to hinder its growth. Based on these findings, policymakers in the USA should prioritize fostering innovation through R&D while addressing the challenges associated with natural resource dependence to drive the growth of the digital economy.

This study examines the significant influence of oil price fluctuations on the economies of oil--exporting countries. While elevated oil prices can result in foreign currency inflows and advantages for oil-exporting countries, they can also trigger adverse effects, including a reduction in manufacturing sectors and a loss of price competitiveness due to currency appreciation. This research focuses on the period from 2004Q1 to 2021Q4, examining the influence of oil price fluctuations on key macroeconomic indicators in Russia, including industrial production, exchange rates, inflation and interest rates. The structural VAR model findings confirm that the monetary channel demonstrates a higher degree of responsiveness to oil price shocks compared to the fiscal channel. Specifically, the study observes that industrial production exhibits a pronounced procyclical response to oil price shocks through the fiscal channel. Conversely, the monetary channel reveals that increased oil price volatility exerts pressure on the Russian rouble, resulting in a counter-cyclical behaviour in inflation and interest rates.

The conventional view of the sustainability of social development is based on the works of the Roman Club, particularly the book "The Limits to Growth" by Donella Meadows and her colleagues (1972). In their opinion, the human population and economy are depleting the wealth of the Earth and pollutants and wastes are burdening the environment. However, the concern that mineral resources will be depleted is unsubstantiated. Environmental economics argues that a higher number of people and a higher income make resources scarcer on a short-term basis. For investors and entrepreneurs, higher prices represent an opportunity and an incentive to search for solutions. Many of them will not succeed in this search and they will bear the costs on their own. However, in a free society, the solutions are eventually found. And in the long run, we are better off thanks to the new discoveries than if the original problems had never occurred.