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The Resource Curse Hypothesis Revisited: Evidence from Asian Economies

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  • Hiroyuki Taguchi
  • Ni Lar

Abstract

This article examines the applicability of resource curse hypothesis focusing on Asian economies for two different phases for 1980-1995 and for 1995-2014. Its analytical contribution is to trace two kinds of crowding-out logics behind the resource curse: the Dutch Disease logic for resource abundance to crowd out manufacturing activities, and the non-Hartwick-rule logic to crowd out savings and investment, by conducting the statistical tests of Granger causality and impulse responses under vector auto-regression estimation. The empirical outcomes identified the existence of the Dutch Disease in 1980- 1995, but not in 1995-2014, and also represented some approach toward the Hartwickrule in 1995-2014, but not in 1980-1995. Thus, the resource curse hypothesis does not fit with the recent Asian economies. One of the interpretations on the transformation of the resource effects from a curse to a blessing could come from the improvement of institutional quality and the progress in policy efforts in the recent Asian economies.

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  • Hiroyuki Taguchi & Ni Lar, 2016. "The Resource Curse Hypothesis Revisited: Evidence from Asian Economies," Bulletin of Applied Economics, Risk Market Journals, vol. 3(2), pages 31-42.
    • Handle: RePEc:rmk:rmkbae:v:3:y:2016:i:2:p:31-42
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    Cited by:

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    6. Ruba A. Aljarallah & Andrew Angus, 2020. "Dilemma of Natural Resource Abundance: A Case Study of Kuwait," SAGE Open, , vol. 10(1), pages 21582440198, January.
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    More about this item

    Keywords

    Resource curse; Asian economies; crowding-out; Dutch Disease; Hartwick rule and institutional quality.;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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