Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162293
Authors: 
Beck, Thorsten
Poelhekke, Steven
Year of Publication: 
2017
Series/Report no.: 
Tinbergen Institute Discussion Paper 17-027/VIII
Abstract: 
The need to absorb windfalls gains and manage them appropriately has been discussed extensively by academics and policy makers alike. We explore the role of the financial sector in intermediating these windfalls. Controlling for the level of financial development, inflation, GDP growth and country fixed-effects, we find a relative decline in financial sector deposits in countries that experience an unexpected natural resource windfall as measured by shocks to exogenous world prices. Moreover, we find a similar relative decline in lending, which is mostly due to the decrease in deposits. The smaller role for the financial sector in intermediating resource booms is accompanied by a stronger role of governments in channeling resources into the economy, mostly through higher government consumption.
Subjects: 
natural resources
financial development
banking
JEL: 
E20
F41
G20
O10
Q32
Q33
Document Type: 
Working Paper

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