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The author would like to thank Erik De Vrijer, Aasim Husain, Vitali Kramarenko, Gene Leon, Abdelhak Senhadji, and Khaled Sakr for their useful comments.
The main data sources are World Economic Outlook (WEO) and World Development Indicator (WDI) data. Data on oil production and reserves is obtained from BP Statistical Review of World Energy June 2007.
To account for outliers, observations for Kuwait during the first gulf war 1990-92 were dropped as well as all observations with a DFBETAi,j statistic, for country i at time t, with an absolute value above
In the specification, the long-term coefficient equals the short-term coefficient of the particular variable divided by 1 minus the coefficient of the lagged dependent variable.