The Review of Economics and Statistics Vol. 61 No. 3 1979
A Quarterly Domestic Copper Industry Model
Abstract
T HE copper industry appears to believe firmly that short-term copper market forecasting is infeasible.1 Despite this pessimism, considerable effort has been devoted to precisely that task. The better known and more complete models include those of Fisher, Cootner, and Baily (1972) (henceforth FCB) and Charles River Associates (1970) (henceforth CRA). Relative to these studies, the present research estimates a quarterly instead of annual model, extends specification of the domestic price equations,2 and examines prediction of employment. Results of particular interest include substantiation of the dual roles of capacity and output in determining employment, the use of the scrap price as a signal for change in the refinery price, specification of intermetal complementarity in ferrous and nonferrous scrap collection, and inclusion of a price expectations variable in consumption. Refinery price, scrap price, total refined supplies, refined consumption and employment are presented and discussed in detail. Stock variables which are used in several equations cannot quite be derived tautologically from lagged inventories, consumption, and supplies. Incomplete stock data and lack of consistency in defining the points in the continuum of copper production that the refined copper becomes produced, becomes part of stocks, and is consumed, prevent the basic stock change identity from holding. However, some simple refinements on a near tautological equation permit accurate estimation of inventories. Some of the equations presented use subdivisions of total refined supplies, e.g., primary refined production. Some work was done on estimating the subcomponents. Although the outcome of this effort is not presented in detail, some of the results derived from this phase of the research are discussed in the section on supplies.
- DOI
- 10.2307/1926070
- Volume
- 61
- Issue
- 3
- Pages
- 410
- Sources
- openalex crossref