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Diagnosing Dutch disease: Does Russia have the symptoms?

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  • Oomes , Nienke

    () (BOFIT)

  • Kalcheva, Katerina

    (BOFIT)

Abstract

In this paper, we assess whether recent economic developments in Russia are symptomatic of Dutch Disease. We first provide a brief review of the literature on Dutch Disease and the natural resource curse. We then discuss the symptoms of Dutch Disease, which include (1) real exchange rate appreciation; (2) slower manufacturing growth; (3) faster service sector growth; and (4) higher overall wages. We test these predictions for Russia while carefully controlling for other factors that could have led to similar symptoms. We con-clude that, while Russia has all of the symptoms, the diagnosis of Dutch Disease remains to be confirmed.

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Bibliographic Info

Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 7/2007.

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Length: 43 pages
Date of creation: 20 Apr 2007
Date of revision:
Handle: RePEc:hhs:bofitp:2007_007

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
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Web page: http://www.suomenpankki.fi/bofit_en/
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Keywords: Dutch disease; real exchange rate; resource curse; Russia; oil; transition;

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References

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