Financial market developments and the minerals industry

Raputsoane, Leroi (2025): Financial market developments and the minerals industry.

Abstract

This paper analyses the reaction of the minerals industry to financial market developments in South Africa. This is achieved by augmenting a Taylor 1993 rule type central bank monetary policy reaction function with the Johannesburg Stock Exchange (JSE), or financial market, index. The empirical results provide evidence of a statistically significant effect of an increase in financial market index on output of the minerals industry, which increases and peaks after 3 months, where this effect is statistically significant up to 5 months. The results further show that following an increase in output of the minerals industry, the financial market index increase slightly and peaks after 2 months as well as after 8 months with a statistically significant effect up to 2 months and between 8 and 10 months. Financial markets are, thus, important for the minerals industry hence policymakers should reduce impediments to financial market development given that a well functioning and regulated financial market has an important role in supporting aggregate economic activity as well as the minerals industry.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial market, Minerals industry, Economic cycles
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General; G - Financial Economics > G1 - General Financial Markets > G10 - General; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L72 - Mining, Extraction, and Refining: Other Nonrenewable Resources

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