 Resource curse hypothesis and role of oil prices in USAMuhammad Shahbaz, Khalid Ahmed, Aviral Tiwari and Zhilun Jiao Resources Policy, 2019, vol. 64, issue C Abstract: This paper employs an augmented production function to examine resource curse hypothesis by incorporating oil prices as an additional determinant of economic growth. In doing so, the bounds testing approach to cointegration is applied in the presence of structural breaks in the series. The directional of causal association between the variables is examined by applying the VECM Granger causality approach. The empirical results show the existence of long run relationship between the variables. Moreover, natural resource abundance is negatively linked with economic growth confirms the validation of resource curse hypothesis. The nonlinear relationship between natural resource abundance and economic growth is inverted U-shaped. Oil prices add in economic growth. Capitalization increases economic growth. Labor boosts economic growth. The causality analysis reveals the unidirectional causal relationship running from natural resource abundance to economic growth. The feedback effect exists between oil prices and economic growth. Capitalization causes economic growth and in return, economic growth causes capitalization in Granger sense. Keywords: Natural resources; Economic growth; Oil prices; USA (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:64:y:2019:i:c:s0301420718306846 DOI: 10.1016/j.resourpol.2019.101514 Access Statistics for this article Resources Policy is currently edited by R. G. Eggert More articles in Resources Policy from Elsevier |
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