REFERENCES
- The overall effects of currency revaluation on commodities prices and macro-economic variables of interest (e.g., trade balance, terms of trade, domestic inflation, etc.) arc quite complex and often difficult to estimate. For a useful introduction to this topic, see P. H. Lindert and C. P. Kindleberger , International Economics , Richard D. Irwin, Inc. , Homcwood , Illinois , 1982 , especially Chapter 15. See also D. Salvatore, international Economics, MacMillan Publishing Company, New York, 1983; and J. Williamson, The Open Economy and the World Economy, Basic Books, Inc., New York, 1983 .
- J. L. W. Jolly , (Copper,) a chapter in Mineral FactsProblems , 1985 Edition, Bureau of Mines Bulletin 675, U.S. Department of Interior , U.S. Government Printing Office , Washington , D.C ., pp. 197 , et seq .
- The Intergovernmental Council of Copper Exporting Countries was formed in June 1967 by four of the world's largest copper exporters, Chile, Peru, Zaire, and Zambia. In 1975, Indonesia joined CIPEC as a permanent member while Australia and Papua New Guinea (PNG) and later Mauritania and Yugoslavia became associate (i.e., non-voting) CIPEC members. The founding members, termed "CIPEC majors," account for the majority of CIPEC's output-more than 81% of CIPEC's total mine production in 1982, for example, according to data presented in the 1982 CIPEC Statistical Bulletin .
- See (Low Copper Prices Contribute to Peso Devaluation,) Mining Journal , 28 September 1984 , for a documented example in the case of Chile .
- Numerous legislative proposals have been made to (reform) this system. Sec, for example. S. 2524, the “Copper and Extractive Industries Fair ”Domenici .
- Mining Journal , Vol. 301 , ḱnum;. October 7 , 1983 . p. 254 .
- Sidney Dell , in IMFConditionality , cd. John Williamson , MIT Press , 1983 , p. 36 .
- Christopher Story , Ed., ldquo; Zambian Kwacha ,” International Currency Review , Vol. 17 , num;, December 1985 , pp. 130 el seq .
- The Chilean government's national copper corporation, formed from the nationalized/expropriated assets of U.S. copper firms in Chile .
- Speech American Metal Market Forum , 7 February 1984 .
- This is not necessarily the case for all countries. Expatriate labor in Africa, for example, may require that some portion of their salary be paid in foreign exchange (dollars or British pounds ).
- This relation between devaluation and domestic inflation is a commonplace in the qualitative economics literature, see, e.g., Christopher Story, Ed , “ Zaire Zaire ,” International Currency Review , Vol. 17 , num;, Feb-Mar 1986 , p. 104 .
- A more accurate calculation coutd be performed on a disaggregated level using the more proximate cost indices for Chile. In the interests of simplicity this refinement is omitted here .
- P. H. Lindert , and C. P. Kindlehergcr , International Economics , Richard D. Irwin , Homcwood , Illinois , 7th Ed., 1982, pp. 321 et seq. Sec also Lawrence H. Officer, “The Purchasing-Power Parity Theory of Exchange Rates A Review Article,” IMF Staff Papers, 23 (March 1976), 160, and Peter Isard, Exchange Rate Determination, Princeton Studies in International Finance, No, 42 (1978), 4–8 .
- An extimatc based in part on Brook Hunt data as reported by Energy, MinesResources Canada, “Canada's Non-ferrous Metals Industry Nickel and Copper, A Special Report,rdquo; ISBN 0 – 662 - 13283 – 1 , Cat &#Mnum; 37 – 26 1984 E, Minister of Supply and Services, Canada, 1984 , pp. 28 – 29 .
- According to Feddersen, Codelco's average cost for the first nine months of 1983 were 50 cents per pound, because of an increase in depreciation charges during that year. If this were an exact analysis rather than simply an example, this additional depreciation would have been factored in the analysis.
- These one-at-a-time sensitivity evaluations must be examined with care, however, because of real world correlations among the factors. Logic suggests that, ceteris paribus, larger devaluations might lead to larger local currency inflation rates, for example, according to the P3 hypothesis. Such linkages are not reflected in the runs given in Table II.
- Testimony or F. H. Kaunda., before the USITC, 16 May 1984. For an interesting discussion of analytical models for allocation of scarce foreign currency reserves for purchases from industrialized countries, see A. O. Esogbue , “ A Foreign Exchange Allocation Algorithm for the Acquisition of Key Spare Parts and Supplies in a Developing Country ,” Journal of Operational Research Society ( London ), Vol. 37 , num;, 1986 , pp. 167 – 180 .
- “ Copper Production Costs and Currency Changes ,” Copper Studies , October 1983 , p. 1 . etseq .
- This is only approximate, as the more aggregate price index obviously includes costs for many goods not used in copper mining. If a home and imported goods time series is available, it is assumed to reflect inflation rates in other countries and the forex fraction. Again, the problem of aggregation renders the calculations only approximate .
- If LCt, and LCb are the local costs in periods t and b, respectively, then the relative cost index is 100 LCt,/LCb as estimated by the index chosen .
- If ERt, and ERb arc the exchange rates (pesos/$) in periods t and b, respectively, 100ERt,/ERb is the exchange rate index .
- (LC,t/LCb)/(CRt,/ERb)= (LCtsub,/ERt,)/(LCb/ER)
- For a discussion of thisrelated points, see any convenient microeconomics text, e.g ., A. A. Thompson , Economics of the Firm Theory and Practice , Prentice-Hall , Englewood Cliffs, New Jersey , 1973 , p. 353 .
- Elementary discussions of this point can be found in most economics texts examining subsidies or the incidence of taxation; see, for example, P. Samuelson, Economics, Eleventh Ed., McGraw Hill Book Company, New York, 1980 , pp. 364 – 366 .
- Thompson , A. A. , Economics of the Firm Theory and Practice . Prentice-Hall , Englewood Cliffs , New Jersey , 1973 , p. 353 .
- Evans , B. J. , “ How to Assess the Staying Power of World Copper Mines ,” Engineering and Mining Journal , April 1986 , pp. 32 el seq .