Differential impact of natural resource revenues on global public debt: A quantile regression approach

The relationship between public debt and natural resource income is increasingly relevant in the global economy. In many countries, the exploitation of natural resources not only constitutes an essential source of income but can also significantly influence the dynamics of public debt. Therefore, this research examines the relationship between natural resource income and public debt globally and in different groups of countries, classified by income level, from 1995 to 2022. In effect, second-generation econometric techniques were used to control the cross-sectional dependence between the countries examined, where it was found that there is long-term dependence and cointegration in the model variables. Likewise, through quantile regressions, it was found that natural resource income and economic growth reduce public debt, while technology and unemployment increase public debt, and only inequality presents heterogeneous effects in groups of countries; in developed countries, it reduces public debt, and in developing countries, it increases public debt. Finally, this study allows formulating several policy implications for achieving a balanced public debt, underlining the importance of efficient management of revenues from natural resources and strategic investment in sectors that promote sustainable economic growth.