1999 Articles
Natural Resources and Economic Growth: A Quantitative Exploration
This article suggests an alternative explanation for why resource-rich economies have lower growth rates: because they are likely to be living beyond their means. It is shown that overshooting the steady state's equilibrium consumption and investment can be optimal in a Ramsey growth model with natural resources. Therefore, the economy will converge to its steady state from above, displaying negative growth rates on the transition. A dynamic general equilibrium model is calibrated to the Venezuelan economy and shown to approximate the economy's performance over the oil boom years adequately.
Subjects
Files
-
HIID1999.pdf application/pdf 2.43 MB Download File
More About This Work
- Academic Units
- Earth Institute
- Published Here
- October 1, 2009