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The effect of oil discovery in Brazil: A synthetic control approach

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  • Coelho dos Santos, Marcelo Bittencourt
  • Klotzle, Marcelo Cabus
  • Baptista Palazzi, Rafael

Abstract

This study explores the economic impact of Brazil's discovery in 2006 of significant deepwater pre-salt oil reserves. Employing a synthetic control approach using counterfactual data from comparable nations, we estimate the influence on Brazil's real per capita GDP for 2006–2014. Our analysis reveals that the oil discovery resulted in an annual increase of approximately USD 100 in real GDP per capita, with the growth effects commencing in 2008 and gradually waning by 2014. These findings contribute to a deeper understanding of the economic implications of oil discovery in the Brazilian context, providing valuable insights for investors and policymakers making strategic energy policy.

Suggested Citation

  • Coelho dos Santos, Marcelo Bittencourt & Klotzle, Marcelo Cabus & Baptista Palazzi, Rafael, 2024. "The effect of oil discovery in Brazil: A synthetic control approach," Resources Policy, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:jrpoli:v:92:y:2024:i:c:s0301420724004008
    DOI: 10.1016/j.resourpol.2024.105033
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    More about this item

    Keywords

    Counterfactual analysis; Comparative case studies; Economic growth; Natural resources; Synthetic control; Pre-salt;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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