A mixed blessing: natural resources and economic growth

This paper diagnoses the symptoms of the Dutch disease in a two-sector stochastic endogenous growth model. A productive, low-skill-intensive primary sector causes the currency to appreciate in real terms, thus hampering the development of a high-skill-intensive secondary sector and thereby reducing growth. Moreover, the volatility of the primary sector generates real-exchange-rate uncertainty and may thus reduce investment and learning in the secondary sector and hence also growth. Cross-sectional and panel regressions based on data for 125 countries in the period 1960–1992 confirm a statistically significant inverse relationship between the size of the primary sector and economic growth, but not between the volatility of the real exchange rate and growth

Ownership and growth

This article suggests how state enterprises can be incorporated into the theoretical and empirical growth literature. Specifically, it shows that if state enterprises are less efficient than private firms, invest less, employ less skilled labor, and are less eager to adopt new technology, then a large state enterprise sector tends to be associated with slow economic growth, all else remaining the same. The empirical evidence for 1978–92 indicates that, through a mixture of these channels, an increase in the share of state enterprises in employment by one standard deviation could reduce per capita growth by one to two percentage points a year from one country to another

Trade surpluses and life-cyce saving behaviour

The national-income account identity and the life-cycle theory of consumption together imply that the current account should be a function of the age structure. A country with a high proportion of young and retired should have current account deficits. Using a panel of 84 countries, we find empirical support for this hypothesis