Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum.
Currently, evidence on the ‘resource curse’ yields a conundrum. While there is much crosssection evidence to support the curse hypothesis, time series analyses using vector autoregressive (VAR) models have found that commodity booms raise the growth of commodity exporters. This paper adopts panel co...
| Main Authors: | , |
|---|---|
| Format: | Working paper |
| Published: |
OxCarre
2008
|
| _version_ | 1797084825452019712 |
|---|---|
| author | Collier, P Goderis, B |
| author_facet | Collier, P Goderis, B |
| author_sort | Collier, P |
| collection | OXFORD |
| description | Currently, evidence on the ‘resource curse’ yields a conundrum. While there is much crosssection evidence to support the curse hypothesis, time series analyses using vector autoregressive (VAR) models have found that commodity booms raise the growth of commodity exporters. This paper adopts panel cointegration methodology to explore longer term effects than permitted using VARs. We find strong evidence of a resource curse. Commodity booms have positive short-term effects on output, but adverse long-term effects. The long-term effects are confined to “high-rent”, non-agricultural commodities. We also find that the resource curse is avoided by countries with sufficiently good institutions. We test the channels of the resource curse proposed in the literature and find that it is explained by real exchange rate appreciation and public and private consumption. Our findings have important implications for non-agricultural commodity exporters with weak institutions, especially in light of the current unprecedented boom in global commodity prices. |
| first_indexed | 2024-03-07T02:00:30Z |
| format | Working paper |
| id | oxford-uuid:9d3677fd-9f76-4999-9dfa-755c8bc0e292 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T02:00:30Z |
| publishDate | 2008 |
| publisher | OxCarre |
| record_format | dspace |
| spelling | oxford-uuid:9d3677fd-9f76-4999-9dfa-755c8bc0e2922022-03-27T00:41:16ZCommodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:9d3677fd-9f76-4999-9dfa-755c8bc0e292Department of Economics - ePrintsOxCarre2008Collier, PGoderis, BCurrently, evidence on the ‘resource curse’ yields a conundrum. While there is much crosssection evidence to support the curse hypothesis, time series analyses using vector autoregressive (VAR) models have found that commodity booms raise the growth of commodity exporters. This paper adopts panel cointegration methodology to explore longer term effects than permitted using VARs. We find strong evidence of a resource curse. Commodity booms have positive short-term effects on output, but adverse long-term effects. The long-term effects are confined to “high-rent”, non-agricultural commodities. We also find that the resource curse is avoided by countries with sufficiently good institutions. We test the channels of the resource curse proposed in the literature and find that it is explained by real exchange rate appreciation and public and private consumption. Our findings have important implications for non-agricultural commodity exporters with weak institutions, especially in light of the current unprecedented boom in global commodity prices. |
| spellingShingle | Collier, P Goderis, B Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum. |
| title | Commodity Prices, Growth, and the Natural Resource Curse:
Reconciling a Conundrum. |
| title_full | Commodity Prices, Growth, and the Natural Resource Curse:
Reconciling a Conundrum. |
| title_fullStr | Commodity Prices, Growth, and the Natural Resource Curse:
Reconciling a Conundrum. |
| title_full_unstemmed | Commodity Prices, Growth, and the Natural Resource Curse:
Reconciling a Conundrum. |
| title_short | Commodity Prices, Growth, and the Natural Resource Curse:
Reconciling a Conundrum. |
| title_sort | commodity prices growth and the natural resource curse reconciling a conundrum |
| work_keys_str_mv | AT collierp commoditypricesgrowthandthenaturalresourcecursereconcilingaconundrum AT goderisb commoditypricesgrowthandthenaturalresourcecursereconcilingaconundrum |