The Impact Of Mineral Resources Price Fluctuation On Mongolian Economy

Mongolia is a small open economy based on the mining industry and is very vulnerable to the external market environment.From the perspective of economic structure,the mining industry accounts for 20% of Mongolia's total GDP,accounting for 80% of total exports,of which about 85% is exported to China.At the same time,Mongolia's geographical location limits the number of its trading partners,and the high concentration of mining and trading partners have increased our dependence on the external economy.The aim of this study is to find out whether mineral price fluctuation has an impact on the Mongolian economy.I have used time series data 2000-2018,collected from international and domestic data sources.The study was based on SVAR's methodology,in order to determine the impact of mineral resources on Mongolian economic,I have chosen two mineral goods of export are coal and copper.These goods' amounts of share on export are higher than other minerals.The study result shows that copper price shocks have influence positively to itself but have not effected on inflation and economic growth.In another word,there has no direct impact.Also,about 40 percent of the economic growth shocks depend on itself,11 percent depends on copper price shocks and 40 percent depends on internal shocks or monetary policies.The exchange rate shocks are about 65 percent depends on itself,20 percent depends on copper price changes.Overall,the impact of copper price shocks on the economy is a weak.When the coal price annual growth has positive shocks on the global market hence,positive effect on GDP annual growth in the 3rd quarter.Also,shows positive influence to increase the rate of USD against MNT within 3 seasons.Which means the opposite result as expected.Reasons are(1)Mongolian coal export revenue growth depends on the quantity growth,not because of price growth.(2)Coal export border price not as follows the global market price.Also,the impact on the economic growth of coal price increase,about 20 percent caused.The exchange rate relation is about 37 percent of coal price increases.