01778cas a2200253 a 4500 AALejournalIMF005826 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872590 1018-5941 BD-DhAAL BD-DhAAL Alichi, Ali. An Alternative Explanation for the Resource Curse : The Income Effect Channel / Ali Alichi, Rabah Arezki. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (24 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper provides an alternative explanation for the "resource curse" based on the income effect resulting from high government current spending in resource rich economies. Using a simple life cycle framework, we show that private investment in the non-resource sector is adversely affected if private agents expect extra government current spending financed through resource sector revenues in the future. This income channel of the resource curse is stronger for countries with lower degrees of openness and forward altruism. We empirically validate these findings by estimating non-hydrocarbon sector growth regressions using a panel of 25 oil-exporting countries over 1992-2005. Mode of access: Internet Arezki, Rabah. IMF Working Papers; Working Paper ; No. 2009/112 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/112/001.2009.issue-112-en.xml IMF e-Library