my Idea for how this should be done
Interests Rates Effects on Copper Extraction
My paper will be looking at how the interest rates affect the rate of copper extraction in Chile, zambia and Australia. This idea came from Hotelling’s model in class. He talks about how mine owners are motivated by profits and will act in a way that gives them the highest return on their investment. For mines the owner will only operate the mine if he can yield more from the mine then equivalent investments. So as the cost of borrowing money rises past the return on mining in theory the owner should shut down the mine and redirect their capital into things like us treasury builds that will get a greater return. This causes the extraction at the mine to reduce as funds have been redirected into more profitable investments.
My question is if mines actually act in accordance with the hotelling theory. My hypothesis is that the mines do not react in the short term as hoteling theory suggests. In the long term however Mine operators will act in accordance with the Hotelling theory. I believe the rate of copper extraction instead is more reliant on other variables.
Currently my research plan will be to look at the extraction rate of copper for now just the three countries I have chosen: Chile, Peru and Australia as they are major producers of copper. I will look at their rate of extraction and compare it with the return on treasury bills and the interest rates in a country. The best paper I currently have on the topic is about how rational investments in the copper industry have been in the past. Another paper I have talks about how resource extraction projects are valued using real options or a discount rate. I was also looking at interest rates and copper production for specific countries on a website called Trading Economics.
I think I will conclude that the mines have such a high fixed cost and contracts with fixed prices they will maintain a near constant investment into the mine. I feel like production will be more influenced by physical constraints and progression in technology rather than financial constraints in the short run. In the long run copper production could be affected by interest rates but most likely will not be due to its demand being inelastic.Your research paper is a very important part of what you will learn in this course. I want you to write a research paper on a specific aspect of the broad theme of how natural resources affect economic development. Here are some suggestions on how to be specific. You could write a paper either on resource curse-related topic or the climate and economic growth related topic.
Teachers instructions
a. Resource-curse-related topic. Here are some ways to pick a resource-curse related topic
Start by picking a non-renewable subsoil asset e.g. copper or oil or gold or diamonds or fossil groundwater and then choose 2 or 3 or countries that had the same mineral resource but achieved different levels of success in avoiding resource curse. Diagnose what was right or wrong in whose approach and propose some solutions. Use Collier’s Plundered Planet, particularly chapters 4-7 from exploration to extraction to investment gives you a way to diagnose the problems and think of solutions
2. Essential parts of your paper:
Regardless of whether you choose options a, b, or c, the following are the essential components in your term paper:
i. Use the concepts we learned this semester; not all of them obviously, although that would be admirable, but concepts that are relevant to your story.
ii. Clearly identify your research question/topic of research in your first paragraph in the Introduction section
iii. Read, summarize and reflect on at least 3 peer-reviewed articles. These 3 papers cannot include papers used as required readings in the syllabus, although you can include recommended readings in this count. Papers you choose should be related to your topic and when you summarize them, be sure to show how the ideas in the articles compare to each other and relate to your research question.
iv. Organize your paper well. Your paper should have the following sections:
a. Title Page. Paper’s title and your name. On a separate page.
b. Page numbers. Number your pages. Give title page number 0.
c. Abstract: In no more than 200 words tell the reader what your paper is about.
d. Introduction. Here you will clearly lay out your research question, and what your methods of analysis will be.
e. Literature review. Here you will summarize and reflect on the relevant research conducted by others. This section should include a summary of at least 3 peer-reviewed papers you have read and digested. Of course, in the course of your research you will undoubtedly do countless google and google scholar searches and read many websites and blog entries. By the way, “you quote it, you note it!” See more on that in item 7. Explain what you learned from their methods and results and how these other papers apply to your research question, and how you are approaching the issue differently or in the same way as the author(s).
f. Analysis. here you will do your analysis. This is the main body of the paper. This is the place where you will show how you apply what we learn in class. If you are doing regressions, then using relevant data, describing it with summary statistics, basic regressions, and interpreting and analyzing the results is part of analysis. You could have a separate sub-section on Discussion where you discuss the results in detail. I leave that up to your stylistic and organizational choice. If you are not doing a regression, but maybe focusing on one or two countries ,then in the analysis section you will dig deep into your research question. Make graphs, show trends etc.
g. Conclusions. Summarize your paper and give your main conclusions. Are there any shortcomings of your analysis? What would you do differently, if you did it all over again?
h. References. APA format.
You may choose to call the above sections by other names (as you would have noticed authors have done in the papers you have read); in fact, I encourage that you be creative in in how you title you sections, but I should be able to clearly identify these components in your paper.
v. A Reference section at the end of the paper is very important part of a research paper. The bibliography should tell me not only the full citation of papers and reports and websites you have cited but also sources of all data you have used. Chose any citation style you like, APA or MLA but make a bibliography. Do not simply paste web links in the bibliography—follow the APA/MLA method to cite a website. Here is a website to show you how you cite:
vi. Finally, a note of caution on plagiarism. I have zero tolerance for plagiarism. I will be using all the tools at my disposal to screen for plagiarism. Here are resources to help you understand what is plagiarism and how to avoid it:
3. Grading Rubric
I read the paper you turn in and look for how it fares in the following two categories:
1. Presentation and Organization: Assess if the paper has all of the sections, are they complete, and do they ‘flow’ together? Did the author clearly state the research question on the first page, ideally first paragraph? Did the student cite the sources completely and properly? Is it proofread and free of spelling and grammar mistakes? 7 points
2. Quality of Analysis: Overall, is the author communicate why the question was interesting and worth pursuing? did the author make use of concepts learned in class? If regression analysis is used, is the choice of data defensible? Is data analysis correct? If data is not used, did the author, read broadly, and do an in-depth study of the research question? 13 points
Finally, there is no minimum or maximum paper length requirement. Take as much or as little space as you need to do justice to this paper. I would imagine your paper itself couldn’t possibly be shorter than these paper guidelines, or could it?! 