{
  "title": "The Linkage between the Oil and Non-oil Sectors: A Panel VAR Approach",
  "publication": "IMF Working Papers, May 1, 2010",
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  "summary": "Recent empirical studies have shown an inverse relation between natural resource intensity and long-term growth, implying that the natural resources generally impede economic growth through various channels (the “natural resource curse”).",
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      "heading": "Summary",
      "content": "- Recent empirical studies have shown an inverse relation between natural resource intensity and long-term growth, implying that the natural resources generally impede economic growth through various channels (the “natural resource curse”).\n- This paper departs from these studies by exploring the intersectoral linkages between oil and non-oil sectors in a cross-country perspective.\n- The paper shows that the applicability of “natural resource curse” across oil-based economies should be treated with caution as the externalities of the oil sector highly depend on the countries’ degree of oil-intensity."
    },
    {
      "heading": "Key findings",
      "content": "- In low oil-intensity economies, the incentives to strengthen both fiscal and private sector institutions lead to positive inter-sectoral externalities.\n- In high oil-intensity economies, weaker incentives adversely affect fiscal and private sector institutions and consequently lead to negative inter-sectoral externalities.\n- The analysis emphasizes that the sign and magnitude of oil-sector externalities on non-oil sectors are conditional on oil-intensity rather than uniform across oil exporters."
    },
    {
      "heading": "Methodology (as described)",
      "content": "- Cross-country perspective using a Panel VAR approach to explore intersectoral linkages between oil and non-oil sectors."
    },
    {
      "heading": "Policy implications / Interpretations (drawn from results)",
      "content": "- The “natural resource curse” should be applied with caution: policy diagnosis must account for countries’ degree of oil-intensity.\n- Strengthening fiscal and private sector institutions may generate positive spillovers from the oil sector to the non-oil sector in low oil-intensity economies.\n- High oil-intensity economies face greater risk of negative inter-sectoral externalities associated with weaker incentives to reinforce institutions.\n\n---\n\n Content in this bundle\n\n- wp10118\n  - wp10118 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp10118 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-linkage-between-the-oil-and-non-oil-sectors-a-panel-var-approach-23827"
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    "[Markdown version](/en/publications/wp/issues/2016/12/31/the-linkage-between-the-oil-and-non-oil-sectors-a-panel-var-approach-23827/index.md)",
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    "Authors: Nir Klein",
    "Published: May 1, 2010",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455200771.001",
    "Recent empirical studies have shown an inverse relation between natural resource intensity and long-term growth, implying that the natural resources generally impede economic growth through various channels (the “natural resource curse”).",
    "This paper departs from these studies by exploring the intersectoral linkages between oil and non-oil sectors in a cross-country perspective.",
    "The paper shows that the applicability of “natural resource curse” across oil-based economies should be treated with caution as the externalities of the oil sector highly depend on the countries’ degree of oil-intensity.",
    "In low oil-intensity economies, the incentives to strengthen both fiscal and private sector institutions lead to positive inter-sectoral externalities.",
    "In high oil-intensity economies, weaker incentives adversely affect fiscal and private sector institutions and consequently lead to negative inter-sectoral externalities.",
    "The analysis emphasizes that the sign and magnitude of oil-sector externalities on non-oil sectors are conditional on oil-intensity rather than uniform across oil exporters.",
    "Cross-country perspective using a Panel VAR approach to explore intersectoral linkages between oil and non-oil sectors.",
    "The “natural resource curse” should be applied with caution: policy diagnosis must account for countries’ degree of oil-intensity.",
    "Strengthening fiscal and private sector institutions may generate positive spillovers from the oil sector to the non-oil sector in low oil-intensity economies.",
    "High oil-intensity economies face greater risk of negative inter-sectoral externalities associated with weaker incentives to reinforce institutions.",
    "**_wp10118**"
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