Resource windfalls, innovation, and growth

Papyrakis, E. (2011) Resource windfalls, innovation, and growth. Journal of Economic Policy Reform, 14 (4). pp. 301-312. ISSN 1748-7870

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Abstract

This paper explores the connection between resource abundance and innovation, as a transmission mechanism that can elucidate part of the resource curse hypothesis, i.e. the observed negative impact of resource wealth on income growth. We develop a variation of the Ramsey-Cass-Koopmans model with endogenous growth to explain the phenomenon. In this model, consumers trade off leisure versus consumption, and firms trade off innovation efforts versus manufacturing. We show that an increase in resource income frustrates economic growth in two ways: directly by reducing work effort and indirectly by inducing a smaller proportion of the labor force to engage in innovation.

Item Type: Article
Uncontrolled Keywords: natural resources,growth,innovation
Faculty \ School: Faculty of Social Sciences > School of International Development
Related URLs:
Depositing User: Pure Connector
Date Deposited: 28 Oct 2013 15:50
Last Modified: 21 Apr 2020 22:05
URI: https://ueaeprints.uea.ac.uk/id/eprint/43999
DOI: 10.1080/17487870.2011.595570

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