Essays on the Macroeconomics of Natural Resources
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The relationship between natural resources and the macroeconomy is the topic of this thesis, which is composed of three self-contained essays. The first essay - "On the interplay between intergenerational transfers and natural resources" - investigates how resource regeneration influences the growth performance of intergenerational transfers. This question is analyzed in a model of endogenous growth with overlapping generations of selfish agents, natural resources and human capital externalities. The results show that a higher resource regeneration rate expands both the volume of intergenerational transfers and the magnitude of their positive effects on growth performance. This also implies that the gap in the rate of growth of output in two scenarios - allocations with transfers and without transfers - increases in response to a higher resource regeneration rate. The second essay - "No blessing, no curse? On the benefits of being a resource-rich southern region of Italy" - looks at the economic effect of natural resources in Basilicata, a southern region of Italy. The aim is to answer the counterfactual question: how would the economic indicators of Basilicata have evolved in the absence of oil extraction? In order to do so, the Synthetic Control Method was implemented to estimate the effect of natural resources. The results reject the qualitative prediction of positive economic effects. The third essay - "A comparison of fiscal rules for resource-rich economies" - evaluates the welfare implications of two different fiscal consumption rules, designed to minimize welfare losses from uncertain resource income. One fiscal rule is a pure theoretical derivation (the PIH rule), whilst the other is of the ad-hoc type (the BiH rule). The initial contribution of the paper is to provide a closed form analytical solution for this intertemporal consumption problem, i.e., the PIH rule. In addition, the model is calibrated and simulated to provide a welfare-based comparison between the PIH and BiH policies. The results show a positive and substantial welfare loss suffered from switching from the PIH rule to the ad-hoc BiH rule, which has proven to be robust under different parameterizations.