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This paper explores whether natural resource abundance is a curse or a blessing. In order to do so, the authors firstly develop a theory consistent econometric model, in which the authors show that there is a long run relationship between real income, the investment rate, and the real value of oil production. Secondly, they investigate the long-run (level) effects of natural resource abundance on domestic output as well as the short-run (growth) effects. Thirdly, they make use of a non-stationary panel approach which explicitly estimates the long-run relationships from annual data as opposed to the dynamic and static panel approaches which might in fact estimate the high-frequency relationships.
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