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Oil Stock Discovery and Dutch Disease

Author

Listed:
  • Hamilton, Kirk
  • Hartwick, John

Abstract

We set out a model of a small open economy exporting oil and a traditional ex- portable in return for produced capital. The small open economy also has local produc- tion of a non-traded good. We rst observe that the size of the traditional export sector declines with an exogenous increase in the countrys oil stock. Strong Dutch disease (SDD) nvolves a net diminution in produced capital in use in the small open econ- omy after the oil discovery shock. SDD turns on the exportable sector being relatively capital intensive.

Suggested Citation

  • Hamilton, Kirk & Hartwick, John, 2008. "Oil Stock Discovery and Dutch Disease," Queen's Economics Department Working Papers 273639, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:273639
    DOI: 10.22004/ag.econ.273639
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    References listed on IDEAS

    as
    1. Hartwick, John M, 1995. "Constant Consumption Paths in Open Eocnomies with Exhaustible Resources," Review of International Economics, Wiley Blackwell, vol. 3(3), pages 275-283, October.
    2. Kirk Hamilton & Katharine Bolt, 2004. "Resource price trends and development prospects," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 3(2), pages 85-97, September.
    3. Vincent, Jeffery & Panayotou, Theodore & Hartwick, John, 1997. "Resource Depletion And Sustainability In Small Open Economies," Harvard Institute for International Development (HIID) Papers 294389, Harvard University, Kennedy School of Government.
    4. Vincent, Jeffrey R. & Panayotou, Theodore & Hartwick, John M., 1997. "Resource Depletion and Sustainability in Small Open Economies," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 274-286, July.
    5. G. B. Asheim, 1987. "Erratum [Hartwick's Rule in Open Economies]," Canadian Journal of Economics, Canadian Economics Association, vol. 20(1), pages 177-177, February.
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