Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210136
Authors: 
Bjørnland, Hilde C.
Thorsrud, Leif Anders
Torvik, Ragnar
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 1/2018
Abstract: 
In this paper we develop the first model to incorporate the dynamic productivity consequences of both the spending effect and the resource movement effect of oil abundance. We show that doing so dramatically alters the conclusions drawn from earlier models of learning by doing (LBD) and the Dutch disease. In particular, the resource movement effect suggests that the growth effects of natural resources are likely to be positive, turning previous growth results in the literature relying on the spending effect on their head. We motivate the relevance of our approach by the example of a major oil producer, Norway, where it seems clear that the predictions based on existing theory do not apply. Although the effects of an increase in the price of oil may resemble results found in the earlier Dutch disease literature, the effects of increased oil activity do not. Therefore, models that only focus on windfall gains due to increased spending potential from higher oil prices, would conclude - incorrectly based on our analysis - that the resource sector cannot be an engine of growth.
Subjects: 
Dutch disease
resource movements
learning by doing
oil prices
time-varying VAR model
C32
E32
F41
Q33
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-020-7
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.no
Document Type: 
Working Paper
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