Neoclassical growth and the natural resource curse puzzle

María Guilló and Fidel Perez-Sebastian
Authors registered in the RePEc Author Service: Fidel Perez Sebastian

Journal of International Economics, 2015, vol. 97, issue 2, 423-435

Abstract: We advance a novel mechanism that helps to explain the puzzling evidence on the natural resource curse. The new channel arises in a standard dynamic Heckscher–Ohlin model composed of small-open economies that take international output prices as given. Within this framework, a more capital-intensive primary sector implies that natural-resource abundant economies grow more slowly along the adjustment path. This effect might be only temporary because the natural input also affects long-run income, and not necessarily in the same direction as transitional growth. We produce quantitative results that show that the new mechanism can account for a significant fraction of the observed output growth gap between resource rich and resource poor U.S. states.

Keywords: Natural resource curse; Economic growth; Dynamic Heckscher–Ohlin; Factor shares; Small open economy (search for similar items in EconPapers)
JEL-codes: F11 F43 O11 O13 O41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Neoclassical Growth and the Natural Resource Curse Puzzle (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:97:y:2015:i:2:p:423-435

DOI: 10.1016/j.jinteco.2015.06.002

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