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The long run dynamic of the Dutch disease phenomenon: a SVAR approach

Author

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  • Fakhri Issaoui
  • Talel Boufateh
  • Ghassen El Montasser

Abstract

This paper studies the dynamic effect of oil rents on the industrial added value in a sample of countries with different development levels. Using a structural vector autoregressive (SVAR) model, we tested the effect of a real shock and a nominal shock on the variables of the model. The main obtained results are three. First, we confirmed that the Dutch disease (DD) problem is a short-term phenomenon that takes place each time when there is a shock on oil rents. Second, the ephemeral nature of the phenomenon confirms the neoclassical assumption stating that the effect of nominal shocks on real variables is only short term. Third, the effect of long-term real shock on oil rents is positive for all countries which score interdependence between industry on the one hand and oil rents on the other.

Suggested Citation

  • Fakhri Issaoui & Talel Boufateh & Ghassen El Montasser, 2013. "The long run dynamic of the Dutch disease phenomenon: a SVAR approach," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 3(1/2), pages 43-63.
    • Handle: RePEc:ids:ijcome:v:3:y:2013:i:1/2:p:43-63
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    Citations

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    Cited by:

    1. Meriem Kouas & Maha Kalai & Kamel Helali, 2024. "Dutch Disease and Deindustrialization: Symmetrical and Asymmetrical Impact of Oil Rent on Value-Added Industry in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 18202-18222, December.
    2. Issaoui Fakhri & Mohammad Alqahtani & Akram Jamee, 2024. "Effects of CO2 Emissions on the Human Development Index: Application to the Case of the Kingdom of Saudi Arabia and Other Developed Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 15453-15484, December.
    3. Boufateh, Talel, 2016. "Cycle-Trend Dichotomy of the Dutch Disease Phenomenon," MPRA Paper 71741, University Library of Munich, Germany.

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