Does abundant natural resources amplify the negative impact of income inequality on economic growth?

Ugochukwu Michael Anyanwu, Amarachukwu Anthony Anyanwu and Andrzej Cieślik

Resources Policy, 2021, vol. 74, issue C

Abstract: Prevailing research suggest that inequality has a negative impact on economic growth. We hypothesize that countries that have abundant natural resources stand to suffer more from income inequality. Using the system generalized method of moments (GMM) dynamic panel estimation method and data set for the period 1988–2012, we compare the relationship between inequality and economic growth in resource and non-resource abundant countries. Our results confirm that the negative impact of income inequality on economic growth is amplified for countries that are endowed with abundant natural resources. Therefore, we propose that reducing income inequality could mitigate the detrimental impact of resource abundance on economic growth.

Keywords: Abundant natural resources; Income inequality; Economic growth (search for similar items in EconPapers)
JEL-codes: C33 D02 E02 E60 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:74:y:2021:i:c:s0301420721002403

DOI: 10.1016/j.resourpol.2021.102229

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