Oil Boom and Economic Development Challenges

Empirical evidence seems to indicate that economic growth has varied inversely with natural resource abundance across countries, in which high natural resources dependent economies experience the low economic growth. This paper first reviews the literature of resources curse and shows that the most important challenges of economic development of Iran are those mechanisms that change the blessing of resources to the curse. Then, the impacts of oil boom on trade structure and national competitiveness are studied by estimation of the trade sector equations. The results confirm the competitiveness reduction of the country during the oil boom due to changes of level and combination of exports and imports.