ISSN:
1573-7020
Keywords:
natural resources
;
economic growth
;
Venezuela
;
computable general equilibrium models
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
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.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1009876618968
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