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    A mixed blessing: natural resources and economic growth

    Gylfason, T. and Herbertsson, T. and Zoega, Gylfi (1999) A mixed blessing: natural resources and economic growth. Macroeconomic Dynamics 3 (2), pp. 204-225. ISSN 1365-1005.

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    Abstract

    This paper diagnoses the symptoms of the Dutch disease in a two-sector stochastic endogenous growth model. A productive, low-skill-intensive primary sector causes the currency to appreciate in real terms, thus hampering the development of a high-skill-intensive secondary sector and thereby reducing growth. Moreover, the volatility of the primary sector generates real-exchange-rate uncertainty and may thus reduce investment and learning in the secondary sector and hence also growth. Cross-sectional and panel regressions based on data for 125 countries in the period 1960–1992 confirm a statistically significant inverse relationship between the size of the primary sector and economic growth, but not between the volatility of the real exchange rate and growth.

    Metadata

    Item Type: Article
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Sarah Hall
    Date Deposited: 01 Dec 2020 18:32
    Last Modified: 01 Dec 2020 18:32
    URI: https://eprints.bbk.ac.uk/id/eprint/41921

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