Oil Curse, Economic Growth and Trade Openness

Monoj Kumar Majumder, Mala Raghavan () and Joaquin Vespignani

No 370, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: An important economic paradox that frequently arises in the economic literature is that countries with abundant natural resources are poor in terms of real gross domestic product per capita. This paradox, known as the ?resource curse,? is contrary to the conventional intuition that natural resources help to improve economic growth and prosperity. Using panel data for 95 countries, this study revisits the resource curse paradox in terms of oil resource abundance for the period 1980?2017. In addition, the study examines the role of trade openness in influencing the relationship between oil abundance and economic growth. The study finds that trade openness is a possible avenue to reduce the resource curse. Trade openness allows countries to obtain competitive prices for their resources in the international market and access advanced technologies to extract resources more efficiently. Therefore, natural resource?rich economies can reduce the resource curse by opening themselves to international trade.

Keywords: Oil rents; real GDP per capita; trade openness; dynamic panel data model (search for similar items in EconPapers)
JEL-codes: E23 F13 Q43 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2019-10-01
New Economics Papers: this item is included in nep-ene, nep-int, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Oil curse, economic growth and trade openness (2020)
Working Paper: Oil curse, economic growth and trade openness (2019)
Working Paper: Oil Curse, Economic Growth and Trade Openness (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:370

DOI: 10.24149/gwp370

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