Financing Sustainable Growth Through Energy Exports and Implications for Human Capital Investment

Unurjargal Nyambuu ()
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Unurjargal Nyambuu: The City University of New York

A chapter in Inequality and Finance in Macrodynamics, 2017, pp 191-219 from Springer

Abstract: Abstract This paper examines the impact of energy resources financing on investment in human capital through the mechanism of growth dynamics. This is done within a context that includes global financial markets and exports of non-renewable energy. These are frequently related to issues of debt accumulation, which naturally raises questions relating to sustainability and welfare—both present and future. Energy export’s contribution to economic growth is emphasized and the distinction between resource-rich and resource-poor countries is highlighted. Major external disturbances for sustained resource-driven development, which can make a country more vulnerable to economic shocks, are discussed. Numerical analysis using Nonlinear Model Predictive Control confirms the empirically observed long-run patterns when non-renewable resources decline monotonically and become depleted. The solutions also confirm typical boom/bust cycle phenomena, where excessive debt may effectively strangle growth. In addition, the implications of investment in human capital for inequality are discussed.

Keywords: Capital Stock; Current Account; Latin American Country; External Debt; Current Account Deficit (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:dymchp:978-3-319-54690-2_9

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DOI: 10.1007/978-3-319-54690-2_9

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