Why Do Resource-Abundant Economies Grow More Slowly?

A-Tier
Journal: Journal of Economic Growth
Year: 1999
Volume: 4
Issue: 3
Pages: 277-303

Authors (2)

Rodriguez, Francisco (University of Denver) Sachs, Jeffrey D (not in RePEc)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This article suggests an alternative explanation for why resource-rich economies have lower growth rates: because they are likely to be living beyond their means. It is shown that overshooting the steady state's equilibrium consumption and investment can be optimal in a Ramsey growth model with natural resources. Therefore, the economy will converge to its steady state from above, displaying negative growth rates on the transition. A dynamic general equilibrium model is calibrated to the Venezuelan economy and shown to approximate the economy's performance over the oil boom years adequately. Copyright 1999 by Kluwer Academic Publishers

Technical Details

RePEc Handle
repec:kap:jecgro:v:4:y:1999:i:3:p:277-303
Journal Field
Growth
Author Count
2
Added to Database
2026-01-29