Capital accumulation and resource depletion: a Hartwick Rule Counterfactual

By: Contributor(s): Material type: TextTextSeries: Policy research working paper, 3480Publication details: [Washington, D.C. World Bank 2005Subject(s): DDC classification:
  • 332.7
Summary: How rich would resource-abundant countries be if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the past 30 years? Hamilton, Ruta, and Tajibaeva use time series data on investments and rents on exhaustible resource extraction for 70 countries to answer this question. The results are striking: Gabon, Trinidad and Tobago, and Venezuela would all be as wealthy as the Republic of Korea, while Nigeria would be five times as well off as it is currently. The authors also derive a more general rule for sustainability--maintain positive constant genuine investment--and use this to draw further empirical results. This paper--a product of the Environment Department--is part of a larger effort in the department to foster sustainable development--World Bank web site.
List(s) this item appears in: World Bank Working Paper Series
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Books Vikram Sarabhai Library Rack 20-A / Slot 739 (0 Floor, West Wing) General Stacks 332.7 H2C2 (Browse shelf(Opens below)) Available 162048

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How rich would resource-abundant countries be if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the past 30 years? Hamilton, Ruta, and Tajibaeva use time series data on investments and rents on exhaustible resource extraction for 70 countries to answer this question. The results are striking: Gabon, Trinidad and Tobago, and Venezuela would all be as wealthy as the Republic of Korea, while Nigeria would be five times as well off as it is currently. The authors also derive a more general rule for sustainability--maintain positive constant genuine investment--and use this to draw further empirical results. This paper--a product of the Environment Department--is part of a larger effort in the department to foster sustainable development--World Bank web site.

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