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Taxation of Oil Products and GDP Dynamics of Oil-Rich Countries

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  • Daubanes, Julien

Abstract

This article proposes a complementary explanation for why oil-rich economies have experienced a relative low GDP growth over the last decades: the proportion of taxes in the prices of petroleum products have been globally increasing in the last four decades, making oil revenues grow slower than output from manufacturing and yielding a low GDP growth for oil-exporting countries. This is illustrated in a two-country model of oil depletion which examines why a net oil-exporting country and a net oil-importing country are differently affected by increased taxes on resource use. The hypothesis is constructed on the theory of non-renewableresources taxation. The argument is based on the distributional effects of taxes on exhaustible resources, which are mainly borne by the suppliers. The theoretical predictions are not invalidated by available statistics.

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Bibliographic Info

Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-012.

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Date of creation: 12 Feb 2009
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Handle: RePEc:tse:wpaper:22138

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Keywords: oil curse; non-renewable resources; taxes; oil revenues; GDP;

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Cited by:
  1. Karen Pittel & Lucas Bretschger, 2010. "The implications of heterogeneous resource intensities on technical change and growth," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1173-1197, November.

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