Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

The Dutch Disease Revisited: Theory and Evidence

Abstract : Contrary to empirical evidence, the Dutch disease hypothesis, driven by Learning By Doing (LBD), does not predict the steady-state real exchange rate appreciation and economic growth deceleration due to a resource boom. To do so, I first represent a simple model to fill the theory's gap, and then adopt a dynamic panel data approach for a sample of 132 countries over the period 1970-2014 to re-evaluate both symptoms of the hypothesis in systematic analysis. The main findings are threefold. First, a resource boom appreciates the real exchange rate. Second, the real exchange rate appreciation decelerates the rate of growth in both sectors such that the shrinkage is larger in the manufacturing sector than in the service sector. This, in turn, makes the relative output level of the manufacturing sector to the service sector be smaller and economic growth be slower. Third, these effects are more intensive in resource-rich countries than in resource-poor countries.
Document type :
Preprints, Working Papers, ...
Complete list of metadatas

Cited literature [144 references]  Display  Hide  Download

https://halshs.archives-ouvertes.fr/halshs-03012647
Contributor : Caroline Bauer <>
Submitted on : Wednesday, November 18, 2020 - 4:21:24 PM
Last modification on : Friday, November 20, 2020 - 8:35:31 AM

File

WP_202074_.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : halshs-03012647, version 1

Collections

Citation

Arsham Reisinezhad. The Dutch Disease Revisited: Theory and Evidence. 2020. ⟨halshs-03012647⟩

Share

Metrics

Record views

31

Files downloads

11