Commodity Price Volatility And The Sources Of Growth
This paper studies the impact of the level and volatility of commodity terms of trade on economic growth, as well as on the three main growth channels: Total factor productivity, physical capital accumulation, and human capital acquisition. The authors argue that volatility, rather than abundance per se, drives the "Resource curse" paradox and also investigates empirically whether export diversification of commodity dependent countries contribute to faster growth. They use the standard system GMM approach as well as an augmented version of the Pooled Mean Group (PMG) methodology of Pesaran et al. (1999) for estimation.