The Metal Resources (METRO) Model. A Dynamic Partial Equilibrium Model for Metal Markets Applied to Rare Earth Elements

33 Pages Posted: 16 Jan 2014

See all articles by Frank Pothen

Frank Pothen

Fraunhofer Gesellschaft - Fraunhofer Center for International Management and Knowledge Economy IMW

Date Written: December 18, 2013

Abstract

This paper presents the METal ResOurces (METRO) model, a partial equilibrium model tailored for metal markets. It allows for a disaggregated representation of the mining sector and endogenous investment in extractive capacities. It can be calibrated to a large number of metal markets. Rare Earth Elements are the first group of metals for which the model is implemented. A new dataset on Rare Earth mines is compiled to calibrate it. First results on key developments of Rare Earth markets are presented. Extensive sensitivity analyses indicate their robustness.

Keywords: Partial Equilibrium Model, Metals, Rare Earths, Exhaustible Resources

JEL Classification: F17, Q31, Q37

Suggested Citation

Pothen, Frank, The Metal Resources (METRO) Model. A Dynamic Partial Equilibrium Model for Metal Markets Applied to Rare Earth Elements (December 18, 2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-112, Available at SSRN: https://ssrn.com/abstract=2379448 or http://dx.doi.org/10.2139/ssrn.2379448

Frank Pothen (Contact Author)

Fraunhofer Gesellschaft - Fraunhofer Center for International Management and Knowledge Economy IMW ( email )

Neumarkt 9-19
Leipzig, Saxony 04109
Germany

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