The volatility of natural resource prices and its impact on the economic growth for natural resource-dependent economies: A comparison of oil and gold dependent economies

The 21st century brought many changes to the world. From witnessing a technological boom and awareness about the environment to renewable energy and conscious use of natural resources, the current century had offered a lot in the previous two decades. However, the question of natural resources being a curse or a blessing to the natural resource-producing economies is still unanswered and gathers many scholars' attention. The current study investigates the volatility of natural resources, oil and gold, and studies the impact of volatility in natural resource prices for resource-producing economies. The global market for crude oil has experienced significant downturns during the last two decades, the financial crisis of 2008 and the Covid 19 crisis of 2020, for instance. Compared to that, the global gold market has experienced relatively less impactful downturns during the same period. We explore how the volatility in oil and gold prices impact the growth of the resource-producing economies. The study is conducted on the top oil-producing countries and the top gold-producing countries on data from 2000 to 2020. The study finds that in the long run, the volatility in both oil and gold markets could be detrimental to the economic growth as measured by the GDP for the resource-producing economies. Our research also shows that the impact of the volatility in prices on the growth of economies is not consistent for all resource-producing economies in the short-term using PMG/ARDL methodology.