Natural Resources and Economic Growth: The Role of Investment

25 Pages Posted: 14 Jul 2006

See all articles by Thorvaldur Gylfason

Thorvaldur Gylfason

University of Iceland - Faculty of Economics and Business Administration; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Gylfi Zoega

University of Iceland; University of London - Birkbeck College; Centre for Economic Policy Research (CEPR)

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Abstract

Is it possible that excessive reliance on natural resources affects saving and investment in a way that retards economic growth? - and thus, in the long run, the level of output per capita. This paper reviews the literature, explores the data and compares and contrasts the explanatory power and interplay of natural resources and civil liberties, our proxy for institutional variables currently under scrutiny in the literature. We propose that natural resource dependence may be viewed as an exogenous factor that impedes economic growth and investment as well as institutions, even if we stress that natural resource abundance may be good for growth.

Suggested Citation

Gylfason, Thorvaldur and Zoega, Gylfi, Natural Resources and Economic Growth: The Role of Investment. The World Economy, Vol. 29, No. 8, pp. 1091-1115, August 2006. Available at SSRN: https://ssrn.com/abstract=917225 or http://dx.doi.org/10.1111/j.1467-9701.2006.00807.x

Thorvaldur Gylfason (Contact Author)

University of Iceland - Faculty of Economics and Business Administration ( email )

IS-101 Reykjavik
Iceland
+354 525 4533/00 (Phone)
+354 552 6806 (Fax)

HOME PAGE: http://www.hi.is/~gylfason/inenglish.htm)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Gylfi Zoega

University of Iceland ( email )

IS-101 Reykjavik
Iceland

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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