What the study found
Peru’s mining-sector GDP and external terms of trade appear to share a stable long-run relationship. The study found that mining GDP is the main variable that adjusts when the two move away from equilibrium.
Why the authors say this matters
The authors conclude that the structural sustainability of mining output depends on how external price changes interact with the sector’s ability to adjust to persistent shocks. They also state that, in Peru, sustainability is shaped not only by global price trends but also by domestic productive and institutional factors that affect the speed of adjustment.
What the researchers tested
The researchers used quarterly data for Peru from 2001 to 2024. They applied Johansen cointegration techniques to test for a long-run relationship and estimated a bivariate Vector Error Correction Model (VECM), a model used to examine both long-run links and short-run adjustment.
What worked and what didn't
The analysis identified one cointegrating relationship between terms of trade and mining GDP. Mining GDP acted as the primary adjustment variable, while short-run terms-of-trade shocks did not have direct contemporaneous effects on mining growth.
What to keep in mind
The estimated speed of adjustment was low, which the authors describe as consistent with a capital-intensive and rigid mining sector. Robustness checks using HAC standard errors and an extended model that included gross fixed capital formation supported the stability of the long-run relationship.
Key points
- Peru’s mining GDP and external terms of trade share a stable long-run relationship.
- Mining GDP was the main adjustment variable when the relationship moved away from equilibrium.
- Short-run terms-of-trade shocks did not have direct contemporaneous effects on mining growth.
- The estimated speed of adjustment was low.
- Robustness checks with HAC standard errors and gross fixed capital formation supported the long-run relationship.
Disclosure
- Research title:
- Peru mining GDP and terms of trade show a stable long-run link
- Authors:
- Antonio Rafael Rodríguez Abraham, Hugo Daniel García Juárez, Ingrid Estefani Sánchez García, Carlos Enrique Mendoza Ocaña, Guillermo Paris Arias Pereyra
- Institutions:
- Universidad César Vallejo
- Publication date:
- 2026-03-11
- OpenAlex record:
- View
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