Does the 'Resource Curse' Hold for Growth in Genuine Income as Well?

World Development, Vol. 32, No. 10, pp. 1627-1640, 2004

38 Pages Posted: 2 Jan 2004 Last revised: 27 Jun 2010

See all articles by Eric Neumayer

Eric Neumayer

London School of Economics and Political Science (LSE)

Date Written: May 1, 2004

Abstract

Existing studies analyzing the so-called 'resource curse hypothesis' regress growth in gross domestic product (GDP) on some measure of resource-intensity. This is problematic as GDP counts natural and other capital depreciation as income. Deducting depreciation from GDP to arrive at genuine income, we test whether the 'curse' still holds true. We find supporting evidence, but the growth disadvantage of resource-intensive economies is weaker in terms of genuine income than GDP. We suggest that this provides additional evidence in support of those who argue that the 'curse' is partly due to unsustainable over-consumption.

Keywords: Resource curse hypothesis, natural capital, depreciation, genuine income

Suggested Citation

Neumayer, Eric, Does the 'Resource Curse' Hold for Growth in Genuine Income as Well? (May 1, 2004). World Development, Vol. 32, No. 10, pp. 1627-1640, 2004. Available at SSRN: https://ssrn.com/abstract=482652

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London School of Economics and Political Science (LSE) ( email )

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