The Impact of Resource Abundance and Resource Inequality on Capital Accumulation in Latin America
نویسندگان
چکیده
We study the impact of natural resource abundance and resource inequality on capital accumulation in a simultaneous model of physical and human capital for a sample of 18 Latin American countries from 1970-2004. We find that physical and human capital are jointly determined, in that human capital has a positive and significant effect on physical capital and vice versa. We show that the long run effect of natural resource abundance on physical capital accumulation is positive, while its effect on human capital is essentially zero. We also find that the long run effect of resource inequality on both forms of capital is non-linear and statistically significant, but quantitatively small. For a country with a level of inequality equal to the sample average, any further increases in resource inequality will increase the stock of physical capital and lower that of human capital. These results are robust to different model specifications and different measures of natural resource abundance and resource inequality. JEL Categories: O13, O15, O16
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