Volatility challenges for natural resources during COVID-19 and its impact on economic development for sustainable economic repossession

Abstract

Considering an economy with abundance of natural resources, one can perceive that the country has strong economic growth. However, it appears to be invalid in various cases Besides, efficient financial systems also play sincere role in natural resource export to spill a positive effect on country's economy. As of now, economic and financial growth are being significantly affected by the day-to-day increase in prices of natural resources as the rising eco-financial growth demands more natural resources. During pandemic, the economies of Asian countries are adversely affected due to slow economic activities. Thus, the current study offers policy recommendations for economic recovery through the investigation of dependency between the price volatilities of natural resources and financial/economic developments. By taking the data from the economies of six Asian countries, we link the proposed relationship during pandemic era. With the application of DOLS and FMOLS, we find that the volatility of natural resources and financial innovations have a determinantal effect on the financial and economic developments of Asian countries. We further identify that financial innovations have a positive impact on the economic recovery of the countries under study, while the proper management of natural resources and less volatility in price commodities could positively contribute towards economic repossession.