Shih-Mo Lin

Date of Graduation


Document Type



Over the past fifteen years, the U.S. mineral industry has undergone profound structural change--a change which is a combination of both supply- and demand-side effects. On the supply side, the once advantageous and profitable position held by the U.S. mineral industry has been gradually replaced by its competitors worldwide, resulting in its loss of competitiveness in not only domestic but also international markets. On the demand side, the growth rate of both intensity of use for conventional metals and GNP, the two widely used measures explaining the demand for metals, has been slowing down for most of the past twenty years. The combined supply- and demand-side effects, coupled with recent developments occurring in the international mineral markets, such as the declining concentration rate for producing certain minerals and shifting sources of supply, have fueled growing concerns and questions over issues related to national security, economic growth, and resource allocation. And these need answers from suitably constructed analytical framework. This study tries to explore and address the above issues by constructing a computable general equilibrium (CGE) model. This model extends the U.S. CGE model by Robinson, Kilkenny, and Hanson (1989) to take into account the important aspects of interdependencies between mineral sectors and all other actors in the economy, as well as the complicating features associated with production, consumption, and trade of all goods. Specifically, this model was specified by making use of cost functions and flexible functional forms, which have allowed it the incorporation of many sorts of substitution possibilities with different magnitudes. The model can be used to examine short-run as well as long-run responses of all actors and activities in the economy under various exogenous or macroeconomic shocks. Policy simulations using the model have generated some interesting results. In some cases, different shocks, either directly or indirectly related to the nonfuel mineral industry, yielded short-run and long-run responses that move in opposite directions. This result might be very important for policy makers in terms of designing specific policies for the mineral industry, given that different policies may have different timing preferences of goal achievement.