The relative richness of the poor? natural resources, human capital, and economic growth

By Claudio Bravo-Ortega, Jose de Gregorio. 2005

316 citations recorded by the source corpus.

Are natural resources a blessing or a curse? The authors present a model in which natural resources have a positive effect on the level of income and a negative effect on its growth rate. The positive and permanent effect on income implies a welfare gain. There is a growth effect stemming from a composition effect. However, the authors show that this effect can be offset by having a large level of human capital. They test their model using panel data for the period 1970-90. They extend the usual specifications for economic growth regressions by incorporating an interaction term between human capital and natural resources, showing that high levels of human capital may outweigh the negative effects of the natural resource abundance on growth. The authors also review the historical experience of Scandinavian countries, which in contrast to Latin America, another region well-endowed with natural resources, shows how it is possible to grow fast based on natural resources.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/f03705b362ebc68d44324b60252c8bd33a1d2d2f

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Citations in the corpus

Cursing the blessings? Natural resource abundance, institutions, and economic growth (2008, unknown): “Notable exceptions are given by Bulte et al. (2005) and Mehlum et al.”
Growth, Development and Natural Resources: New Evidence Using a Heterogeneous Panel Analysis (2011, background): “Dutch disease (see Corden and Neary (1982), Neary and van Wijnbergen (1986), and Krugman (1987)) is one of the channels through which the resource curse makes itself felt: an increase in natural resource revenue leads to an appreciation of the real exchange rate, which negatively a¤ects the protabi”