Resources Booms and Macroeconomic Adjustments in Developing Countries

6 Impact of Major Resources Booms in Papua New Guinea

6.1 Introduction

This chapter examines the nature and impact of major resources booms and internal policy responses in relation to growth and the sectoral composition of output, and savings behaviour of the PNG economy. Only major positive shocks in the form of resources booms and their consequences on the PNG economy are analysed over the study period of 1970-94. The objective of this discussion is to analyse whether the available empirical evidence of resources booms in PNG substantiates the theoretical predictions of the framework of the study postulated in Chapter 2. This chapter also examines the PNG government’s responses to these resources booms, in the short as well as the long term. ...