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Is Chad affected by Dutch or Nigerian disease?

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  • Kablan, Sandrine
  • Loening, Josef

Abstract

We examine the effects of the ‘natural resource curse’ on Chad and find little evidence for Dutch disease. Structural vector auto-regression suggests that changes in domestic output and prices are overwhelmingly determined by aggregate demand and supply shocks, and while oil production and high international prices negatively affect agricultural output, the effects are small. Consistent with empirical evidence for neighbouring Cameroon, we observe minimal impact on Chad’s manufacturing sector. We associate our findings with structural underemployment and the inefficient use of existing production factors. In this context, increased public expenditures in tradable sectors present the opportunity to make oil revenues an engine of national development.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39799.

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Date of creation: 30 Jun 2012
Date of revision: 02 Jul 2012
Handle: RePEc:pra:mprapa:39799

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Keywords: Natural resource curse; Dutch disease; Chad; Structural VAR;

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  1. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
  2. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-80, November.
  3. Stephanie Levy, 2007. "Public Investment to Reverse Dutch Disease: The Case of Chad," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 16(3), pages 439-484, June.
  4. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
  5. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
  6. Brahmbhatt, Milan & Canuto, Otaviano & Vostroknutova, Ekaterina, 2010. "Dealing with Dutch Disease," World Bank - Economic Premise, The World Bank, The World Bank, issue 16, pages 1-7, June.
  7. Brahmbhatt, Milan & Canuto, Otaviano, 2010. "Natural Resources and Development Strategy after the Crisis," World Bank - Economic Premise, The World Bank, The World Bank, issue 1, pages 1-7, February.
  8. Eugenio Cerutti & Mario Mansilla, 2008. "Bolivia," IMF Working Papers 08/154, International Monetary Fund.
  9. Benjamin, Nancy C. & Devarajan, Shantayanan & Weiner, Robert J., 1989. "The Dutch disease in a developing country : Oil reserves in Cameroon," Journal of Development Economics, Elsevier, vol. 30(1), pages 71-92, January.
  10. Rabah Arezki & Markus Bruckner, 2010. "Resource Windfalls and Emerging Market Sovereign Bond Spreads," IMF Working Papers 10/179, International Monetary Fund.
  11. Oomes , Nienke & Kalcheva, Katerina, 2007. "Diagnosing Dutch disease: Does Russia have the symptoms?," BOFIT Discussion Papers 7/2007, Bank of Finland, Institute for Economies in Transition.
  12. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 92(368), pages 825-48, December.
  13. repec:fth:stanho:e-92-3 is not listed on IDEAS
  14. Bjornland, Hilde Christiane, 1998. "The Economic Effects of North Sea Oil on the Manufacturing Sector," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(5), pages 553-85, November.
  15. Drelichman, Mauricio, 2005. "The curse of Moctezuma: American silver and the Dutch disease," Explorations in Economic History, Elsevier, Elsevier, vol. 42(3), pages 349-380, July.
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