The Recursions of Subset VECM/State-Space Models and Their Applications to Nonlinear Relationships of Nickel Price Formation in Conditions of Climate Change

Abstract

On 30 October, 2006, the former Chief Economist of the World Bank, Nicholas Stern, reported that no government is taking effective measures to expand their use of new energy resources, and that the resulting global warming will produce an economic and environmental loss of more than US$6.8 trillion (Brailsford et al. 2007). The potential impact of climate change, if we take inadequate actions over the coming few decades, will most likely create risks of major interruptions to business and economic activity, later in this century and into the next, on a scale similar to those associated with the Second World War and the economic depression of the twentieth century.