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Resource-Abundance and Economic Growth in the U.S.

46 Pages Posted: 24 May 2004  

Elissaios Papyrakis

VU University Amsterdam - Institute for Environmental Studies (IVM)

Reyer Gerlagh

Tilburg University - Center and Faculty of Economics and Business Administration

Date Written: April 2004

Abstract

It is a common assumption that regions within the same country converge to approximately the same steady-state income levels. The so-called absolute convergence hypothesis focuses on initial income levels to account for the variability in income growth among regions. Empirical data seem to support the absolute convergence hypothesis for U.S. states, but the data also show that natural resource-abundance is a significant negative determinant of growth. We find that natural resource abundance decreases investment, schooling, openness, and R&D expenditure and increases corruption, and we show that these effects can fully explain the negative effect of natural resource abundance on growth.

Keywords: Natural resources, Growth, Transmission channels

JEL Classification: C21, O13, O51, Q33

Suggested Citation

Papyrakis, Elissaios and Gerlagh, Reyer, Resource-Abundance and Economic Growth in the U.S. (April 2004). FEEM Working Paper No. 62.04. Available at SSRN: https://ssrn.com/abstract=545662 or http://dx.doi.org/10.2139/ssrn.545662

Elissaios Papyrakis (Contact Author)

VU University Amsterdam - Institute for Environmental Studies (IVM) ( email )

De Boelelaan 1115
Amsterdam, 1081 HV
Netherlands
+31 20 44 49502 (Phone)
+31 20 44 49553 (Fax)

Reyer Gerlagh

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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