Three Symptoms And A Cure: A Contribution To The Economics Of The Dutch Disease
AbstractThis paper presents a dynamic model that gives an account of some of the forms that the Dutch Disease can take through both product and labour markets. These involve an effect of primary sector output - through real wages and the level and volatility of real-exchange rates - on secondary sector employment, output, and investment. We then look at data from Iceland - which is probably the only OECD country that may have a serious problem of this sort - and look for evidence supporting our hypotheses. We find a clear effect of primary sector output and its volatility on real wages but not on the real exchange rate, defined as a ratio of the prices of traded and non-traded goods. Moreover, real wages are shown to impede output, investment and employment in the secondary sector.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2364.
Date of creation: Jan 2000
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Frederick van der Ploeg & Steven Poelhekke, 2007.
"Volatility, Financial Development and the Natural Resource Curse,"
Economics Working Papers
ECO2007/36, European University Institute.
- Poelhekke, Steven & van der Ploeg, Frederick, 2007. "Volatility, Financial Development and the Natural Resource Curse," CEPR Discussion Papers 6513, C.E.P.R. Discussion Papers.
- Frederick van der Ploeg & Steven Poelhekke, 2008. "Volatility, Financial Development and the Natural Resource Curse," OxCarre Working Papers 003, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- Gylfason, Thorvaldur, 2001.
"Nature, Power, and Growth,"
Scottish Journal of Political Economy,
Scottish Economic Society, vol. 48(5), pages 558-88, November.
- Thorvaldur Gylfason & Gylfi Zoega, 2001.
"Natural Resources and Economic Growth: The Role of Investment,"
EPRU Working Paper Series
01-02, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Thorvaldur Gylfason & Gylfi Zoega, 2006. "Natural Resources and Economic Growth: The Role of Investment," The World Economy, Wiley Blackwell, vol. 29(8), pages 1091-1115, 08.
- Gylfason, Thorvaldur & Zoega, Gylfi, 2001. "Natural Resources and Economic Growth: The Role of Investment," CEPR Discussion Papers 2743, C.E.P.R. Discussion Papers.
- Thorvaldur Gylfason & Gylfi Zoega, 2004. "Natural Resources and Economic Growth: The Role of Investment," DEGIT Conference Papers c009_011, DEGIT, Dynamics, Economic Growth, and International Trade.
- Thorvaldur Gylfason & Gylfi Zoega, 2002. "Natural Resources And Economic Growth: The Role Of Investment," Working Papers Central Bank of Chile 142, Central Bank of Chile.
- Elissaios Papyrakis & Reyer Gerlagh, 2004. "Resource-Abundance and Economic Growth in the U.S," Working Papers 2004.62, Fondazione Eni Enrico Mattei.
- Gylfason, Thorvaldur, 2000.
"Natural Resources, Education, and Economic Development,"
CEPR Discussion Papers
2594, C.E.P.R. Discussion Papers.
- Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
- Papyrakis, Elissaios & Gerlagh, Reyer, 2007. "Resource abundance and economic growth in the United States," European Economic Review, Elsevier, vol. 51(4), pages 1011-1039, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.