How should economies manage their resource wealth? Historically many countries, from Nauru to Nigeria, have suffered from a “resource curse” of volatility, de-industrialisation and corruption. Other countries now face similar challenges, from the huge hydrocarbon discoveries in Kenya, Tanzania and Uganda to the shale gas deposits in the US. This project considers how these countries should avoid such a curse. Existing research has focused on longer-term issues of whether governments should spend, save or invest their resource wealth. Little work has been done on short-term challenges of monetary and exchange rate policy.
This project will draw on a variety of the latest macroeconomic modelling techniques to understand how these policies should be conducted. The project will develop clear recommendations for policymakers and their advisors. The results will be disseminated by engaging with international organisations including the World Bank and IMF, national governments and central banks, and in articles for a general audience.