Abstract
Economies, like Russia, blessed with resource abundance, do not usually perform well during the period of commodity price boom. The optimal policy of managing resource revenues prescribes to commit the permanent income rule to smooth the resource dividend in efficiency units and to smooth the real exchange rate. During the commodity price boom, Russia followed partially this prescribed policy, but the situation changed after the crash of oil and gas prices in 2014. Possible ways to overcome the consequences of low oil and gas prices are discussed, paying particular attention to the lack of economic complexity and the need for diversifi cation and capabilities for growth and development of the Russian economy. Refs 29. Figs 3.
Highlights
IntroductionGas or mineral bonanzas economies often do not fare well. The reasons for this so-called natural resource curse are well known (e. g., [Guriev and Sonin, 2008])
Following oil, gas or mineral bonanzas economies often do not fare well
The majority of emerging economies are very unbalanced based on the provided index; the index value does not mean that nothing besides several groups of goods is produced in these countries, it just means only a few types of products could be exported to other nations with economic profit
Summary
Gas or mineral bonanzas economies often do not fare well. The reasons for this so-called natural resource curse are well known (e. g., [Guriev and Sonin, 2008]). Gas or mineral bonanzas economies often do not fare well The reasons for this so-called natural resource curse are well known Due to these mistakes output is less than what it would be otherwise Volatility of such an important revenue stream makes it more likely that countries are credit constrained and cannot finance crucial innovations which will hamper growth projects. These negative effects are severe if the banking sector is not well developed and firms are unable to hedge against this type of uncertainty.
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