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The Long Norwegian Boom: Dutch Disease After All?

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  • Knut Anton Mork

Abstract

Norway's famed success against the Dutch disease did not extend to the petroleum investment boom of 200019. This paper takes a fresh look at the post-2000 data and shifts the focus from quantities and productivity to product prices and wages. Sweden, which is used as the control, had similar developments for real GDP and productivity, but mainland Norway outpaced Sweden in terms of product prices and wages, far in excess of the corresponding divergence of consumer prices. This real appreciation is explained as a result of new demand pressure from oil companies with a strong home bias. It also implies that about half of the resource rent, all of which was to be appropriated by the government, leaked to the private sector. Thus, rent management has not been nearly as effective as claimed. And the real appreciation is likely to cause major adjustment problems once the resource boom ends.

Suggested Citation

  • Knut Anton Mork, 2022. "The Long Norwegian Boom: Dutch Disease After All?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    • Handle: RePEc:aen:journl:ej43-3-mork
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    Cited by:

    1. Knut Anton Mork & Haakon Andreas Trønnes & Vegard Skonseng Bjerketvedt, "undated". "Capital preservation and current spending with Sovereign Wealth Funds and Endowment Funds: A simulation study," Working Paper Series 19222, Department of Economics, Norwegian University of Science and Technology.

    More about this item

    JEL classification:

    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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