Do Commodity Price Shocks Cause Conflict?

The natural resource curse (sometimes called “Dutch disease”) was one of my first fascinations in development economics. It represents the apparent “paradox” of a boom in natural resource wealth leading to less economic growth. There are, of course, numerous theories as to why this observation persists. One popular theory, that is repeatedly tested empirically, is that sharp and dramatic changes in the prices of these resources lead to conflict, which in turn slows economic growth.

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