The optimal adjustment to mineral-supply disruptions: The case of aluminum in Taiwan

Although most primary commodities seem to be in over supply, a basic question remains: what is the impact of critical mineral-supply restrictions on the economies of mineral-importing nations? This article develops a framework that can be easily used to analyze the potential impact of a mineral-supply restrictions and to formulate an adjustment pattern of a small-size, Taiwan-type economy on a sector-by-sector basis. The model presented here generalizes I-O analysis through a linear-programming framework. An iterative solution procedure is incorporated into the model so that the results are more practical and flexible for use by policy makers. A corresponding restricted resource-allocation function is derived the LP-model solution, which allows the policy maker to readily construct an adjustment strategy.