Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/54926 
Year of Publication: 
2011
Series/Report no.: 
CESifo Working Paper No. 3678
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We use a new dataset on non-resource GDP to examine the performance of commodity-exporting countries in terms of macroeconomic stability and economic growth in a panel of up to 129 countries during the period 1970-2007. Our main findings are threefold. First, we find that overall government spending in commodity-exporting countries has been procyclical. Second, we find that resource windfalls initially crowd out non-resource GDP which then increases as a result of the fiscal expansion. Third, we find that in the long run resource windfalls have negative effects on non-resource sector GDP growth. Yet, the effects turn out to be statistically insignificant when controlling for government spending. Both the effects of resource windfalls on macroeconomic stability and economic growth are moderated by the quality of political institutions.
Subjects: 
commodity
fiscal policy
macroeconomic stability
economic growth
JEL: 
O13
H30
C33
Document Type: 
Working Paper
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