other bubbles, are important, not only because they further dispel the alleged curse of natural resources, but especially because the policy implication is that the right levers to deal with the lackluster performance of resource-rich developing countries in recent decades lies in the realm of macroeconomic policy instead of trade or industrial policies.

Bravo-Ortega and de Gregorio (2007) using the same proxy (as well as natural resource exports over total merchandise exports), also find a negative cross sectional impact but trace its origin to a Dutch disease effect working through human capital. Adding an interactive human capital term suggests that as the stock of human capital rises, the marginal effect of the stock of natural resources on income growth rises and becomes positive. This is broadly consistent with Gylfason et al’s argument that a national effort in education is especially necessary in resource-rich countries, although without their hypothesis that resource-rich sectors intrinsically require, and hence induce, less education. However, Bravo-Ortega and Gregorio find that the point at which resources begin to contribute positively to growth occurs at around 3 years of education, a level achieved by all but the poorest countries.

Sachs and Vial (2002), Sachs and Warner (1995) confirm a negative and robust relationship using a second, related proxy- the share of natural resources exports in total exports, and this proved somewhat more robust. However, it, again, does not make Sala-iMartin et al’s core of robust regressors. Further, when Lederman and Maloney include a generic measure of concentration, the Herfindahl index, using export data disaggregated at 4-digit SITC, the resource curse disappears. The curse is one of concentration, not resources. This finding is consistent with Auty’s (2000) concern about a resource drag on growth arising from the limited possibilities of diversification within commodities. However, Lederman and Xu (2007) argue that diversification into non-resource sectors from a strong resource base is feasible.

Leamer (1984) argues that standard Heckscher-Ohlin trade theory dictates that the appropriate measure is net exports of resources per worker. This measure has been the basis for extensive research on the determinants of trade patterns (e.g., Trefler 1995, Antweiler and Trefler 2002, Estevadeordal and Taylor 2002).<sup>8</sup> This was Lederman and Maloney’s (2007) preferred measure because it obviated the Singapore issue by netting out resource exports from the beginning.<sup>9</sup> In cross section and in panel context across the Sachs-Warner period, it yielded either insignificant or positive results. Using Maddison’s (1994) growth data from 1820-1989, Maloney (2002, 2007) finds suggestive evidence of a _positive_ growth impact of resources from 1820-1950, but then a negative impact thereafter, driven by Latin America’s underperformance.

> 8 Assuming identical preferences, a country will show positive net exports of resource intensive goods if its share of productivity-adjusted world endowments exceeds its share of world consumption. Usually, the net exports are then measured with respect to the quantity of other factors of production, such as the labor force. 9 It is worth mentioning that the cited references show that the HO model of factor endowments performs relatively well for natural resources net exports, but it performs less well for manufactures. The current debate in the trade literature revolves around the question of how the HO model might be amended (by considering, for example, technological differences across countries, or economies of scale) to help predict better the observed patterns of net exports across countries. But there is not debate about the use of net exports as a proxy for revealed comparative advantage in this literature.

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