TY - JOUR
T1 - Natural resource booms and inequality
T2 - Theory and evidence
AU - Goderis, B.V.G.
AU - Malone, S.W.
PY - 2011
Y1 - 2011
N2 - 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 non-traded 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 find evidence in support of the theory, especially for oil and mineral booms. We also find that uncertainty about future commodity prices increases long-run inequality.
AB - 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 non-traded 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 find evidence in support of the theory, especially for oil and mineral booms. We also find that uncertainty about future commodity prices increases long-run inequality.
U2 - 10.1111/j.1467-9442.2011.01659.x
DO - 10.1111/j.1467-9442.2011.01659.x
M3 - Article
SN - 0347-0520
VL - 113
SP - 388
EP - 417
JO - Scandinavian Journal of Economics
JF - Scandinavian Journal of Economics
IS - 2
ER -