Natural Resource Booms and Inequality: Theory and Evidence

Benedikt Goderis and Samuel Malone

No 8, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: We develop a theory, in the context of a two-sector growth model in which learning-by-doing drives growth, to explain the time path of income inequality following natural resource booms in resource rich countries. Under the condition of a relatively unskilled labor intensive nontraded sector, inequality falls immediately after a boom, and then increases steadily over time until the initial impact of the boom disappears. Using data for 90 countries between 1965 and 1999, we .nd evidence in support of the theory, especially for oil and mineral booms. We also .nd that uncertainty about future commodity prices increases long-run inequality.

Keywords: Dutch Disease; Windfalls; Commodity Prices (search for similar items in EconPapers)
JEL-codes: F11 O13 O15 Q33 (search for similar items in EconPapers)
Date: 2008-09-23
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Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Natural Resource Booms and Inequality: Theory and Evidence (2011)
Working Paper: Natural Resource Booms and Inequality: Theory and Evidence (2009)
Working Paper: Natural Resource Boom and Inequality: Theory and Evidence (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:oxcrwp:008

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