Natural Resource Abundance and Economic Growth
U of Massachusetts Amherst Resource Economics Working Paper No. 2004-7
17 Pages Posted: 14 Jul 2004
Date Written: July 2004
Abstract
This paper explores whether natural resource abundance leads, other things equal, to slower growth rates. We distinguish between natural resource dependence (RD) and the natural resource endowment (RE). We estimate three models, using World Bank data on national capital stocks. In a one-equation model we show that RD has a negative effect on growth rates, apparently confirming the main results of the resource "curse" literature. RE, however, has a positive impact on growth. We then estimate a two-equation model, in which the impacts of RE are much weaker. Finally, we estimate a three-equation model, in which the impacts of natural resources on growth disappears.
Keywords: Resource abundance, growth, resource curse
JEL Classification: O49, Q56
Suggested Citation: Suggested Citation
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