UW-Madison UW-Madison

Department Seminar

When are Resources Curses and Blessings? Evidence from the U.S. 1935-1999

presented by
Karen Clay
Heinz School of Public Policy & Management
Carnegie Mellon University

Following Sachs and Warner (1995, 1997), the relationship between natural resources and growth has attracted extensive attention from economists and policymakers. One challenge in terms of understanding that relationship is that the literature is large and reaches different conclusions about the existence of a resource curse and, for papers that find a curse, the conditions under which a curse may exist. This paper uses new state-level panel datasets spanning 1935-1999 to investigate the relationship between natural resources and growth in the context of the American states. Our empirical strategy is closely related to Allcott and Keniston (2015) and Bartik (1991). We correlate changes in state per capita income with exogenous measures of resources – the interaction of national resource employment or income with cross sectional variation in resource reserves. The paper has three main findings. First, the relationship between growth and natural resources varies across types of natural resources – agriculture, oil, and coal – and one-year and five-year intervals and over different time periods between 1935 and 1999. In some cases, relationships are positive, and in others the relationships are not statistically significantly different from zero. Second, the relationship between resources and growth may differ depending on whether the change is an increase or a decrease. During the second half of the twentieth century, the effects of oil and coal booms were smaller than the effects from busts. This asymmetric effect is a form of a resource curse and is consistent with Black et al (2005) and Jacobsen and Parker (2015), who find that booms and busts made U.S. counties that experienced them worse off. Third, we can replicate many of the findings from previous studies of the resource curse in the United States. The divergent findings are largely due to the use of different dependent variables, measures of resources, estimation techniques, and time frames.

March 31, 2017
12:00PM - 1:00PM
Taylor-Hibbard Seminar Room (Rm103 Taylor Hall)
For additional information contact:
Dominic Parker
413 Taylor Hall
(608) 262-8916
email: dominic.parker@wisc.edu

Fall 2016-2017 Schedule

Date Speaker and Topic
Sep 16
Thiemo Fetzer, Department of Economics
University of Warwick
Does Migration Cause Political Extremism?
Oct 7
Valeriano Martinez San Roman, Department of Economics
University of Cantabria
Intra-National Home Bias: New Evidence from the United States Commodity Flows Survey
Oct 21
Prashant Bharadwaj, Department of Economics
University of California, San Diego
Displacement and Development: Long Term Impacts of the Partition of India
Oct 31
Fengxia Dong, Department of Agricultural & Applied Economics
University of Wisconsin - Madison
Sustainability of U.S. Corn Production: A Cost Function Analysis
Nov 4
Arik Levinson, Department of Economics
Georgetown University
Are Energy Efficiency Standards Less Regressive Than Energy Taxes?
Nov 18
Nicolas Kuminoff, Department of Economics
Arizona State University
Hazed and Confused: The Effects of Air Pollution on Cognitive Functioning and Financial Decision Making among the Elderly
Dec 2
Hope Michelson, Department of Agricultural & Consumer Economics
University of Illinois at Urbana-Champaign
Agricultural Productivity and Child Nutrition
Last updated on Thu, Jun 30, 2016 9:10am