Role of macroeconomic determinants on the natural resource commodity prices: Indonesia futures volatility

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Abstract

Currently, natural resource price volatility has become an international issue because it creates economic instability and this phenomenon needs attention from researchers and regulators. Therefore, the current study aims to examine the impact of macroeconomic determinants such as exports, human capital, gross domestic product (GDP) growth and foreign direct investment (FDI) on Indonesia's natural resource prices volatility. The authors used secondary sources to collect data and extracted the data from World Bank Indicators (WDI) and Goldman Sachs Commodity Index (GSCI) databases from 1971 to 2020. The researchers have used the autoregressive distributed lag (ARDL) to test the linkage among the understudy constructs. The results have revealed that exports, human capital, GDP growth, and FDI are positively associated with natural resources prices volatility in Indonesia. The current study suggested that the regulatory authorities should formulate effective policies related to the natural resources prices volatility with respect to macroeconomic determinants.

Original languageEnglish
Article number102815
JournalResources Policy
Volume78
DOIs
Publication statusPublished - Sep 2022

Keywords

  • Exports
  • Gross domestic product growth
  • Human capital
  • Natural resources prices volatility

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