Energy Endowments and Economic Growth
32 Pages Posted: 7 Jul 2019 Last revised: 13 Sep 2019
Date Written: July 1, 2019
This paper examines the relationship between fossil fuel endowments and economic growth rates. We find that countries with plausibly exogenous fossil fuel endowments exhibit higher economic growth rates and convergence towards development, as indicated by standard β- and σ-convergence tests. By contrast, when we restrict the sample to countries without fossil fuel endowments we find no evidence of convergence. Results suggest that fossil fuel endowments are generally beneficial for long-run economic growth. However, significant heterogeneity exists across countries, particularly for initially low-income countries.
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