Does economic recession reduce material use? Empirical evidence based on 157 economies worldwide

The research on economic recession has been more focused on the interactions between macroeconomic and financial variables. However, whether material use has been affected during the recession period has remained under-explored. In order to fill up this gap, this study investigates the relationship between material use and economic recession, as well as other socio-economic drivers, by using the material flow analysis and the system generalized method of moments for 157 economies worldwide during 1980–2011. Results show that economic recession poses significant and negative impact on domestic material consumption at 1% level, illustrating its role as a determinant factor on material mitigation. By dividing the research sample into extractive and non-extractive economies, as well as high-, mid- and low-income groups, we again confirmed the significant negative correlations as expected. No significant sign is found between recession and physical trade balance. Besides, other drivers such as population, Gross Domestic Production (GDP) per capita and technological variables also exert marked effects at different situations. This research work provides an empirical study on how recession and other factors affect material use at various scenarios, which have essential implications for understanding material flow dynamics in different economic cycles.