The Oil Abundance and Oil Dependence Scenarios: the Bad and the Ugly?
- PDF / 382,841 Bytes
- 12 Pages / 595.276 x 790.866 pts Page_size
- 47 Downloads / 177 Views
The Oil Abundance and Oil Dependence Scenarios: the Bad and the Ugly? Sofien Tiba 1 Received: 20 January 2020 / Accepted: 19 October 2020 # Springer Nature Switzerland AG 2020
Abstract This study makes a substantial contribution to the resources curse argument debates by answering the question of which scenario is bad for the economy “oil abundance” or “oil dependence” by supposing the nonlinearity in this issue. To answer this puzzling question, we use the panel smooth transition regression model (PSTR) for a sample of 33 economies categorized into two subpanels the oil-abundant economies and the oil-dependent ones for the spanning time from 1990 to 2016. By confirming the nonlinearity in the oil curse argument, our empirical highlights pointed out that the oil curse thesis is very well verified. We revealed that the impact of oil abundance on income factor is more explicit in the oil-abundant economies than in the oildependent ones. The estimation of the threshold variable implies that the oil-growth nexus is smoothly switched from one regime to another regime but approximately rapid for the two scenarios. Due to the significant repercussions of the oil on the economic sphere, with the increase of the pace of the climate change symptoms and the depletion of the resources, these economies should seriously take into consideration the resource depletion and the climate emergency issues to preserve the planet’s reserves for future generations towards sustainable and viable future. Keywords Oil abundance scenario . Oil dependence scenario . PSTR model
1 Introduction Since the industrial revolution, oil is considered the engine of the economy and the guarantee of worldwide prosperity. In this spirit, the source of energy is a fundamental element of the industrial sector, which justifies that the world oil crude shock has a serious repercussion on the macroeconomics aspect. Several economies are abundant in oil and natural resources, but these huge potential are coupled with poor economic performance. The oil-abundant economies suffered from weak economic performance, which is stressed through the socalled “oil curse” thesis. However, the oil-dependent economies suffered from the volatility of the oil prices, which have Highlights • We attempt to answer the question of which scenario is bad: The “resources curse” or the “resources dependence.” • We use the PSTR model for 33 countries for the period 1990–2016. • We pointed out that the oil curse thesis is verified. • The impact of oil abundance on income factor is more explicit in the oilabundant economies than in the oil-dependent ones. * Sofien Tiba [email protected] 1
Faculty of Economics and Management, University of Sfax, Sfax, Tunisia
important costs and repercussions in terms of macroeconomics well-being. The economic theory justified the oil curse thesis by five possible explanations such as the Dutch disease, the human capital, the weak institutional regulations, the rentseeking behavior, and the misallocation of resources revenues (e.g., [3, 4, 14, 15,
Data Loading...
