IDEAS home Printed from https://ideas.repec.org/p/ags/ubzefd/18721.html
   My bibliography  Save this paper

The Effects Of The Dutch Disease In Russia

Author

Listed:
  • Algieri, Bernardina

Abstract

This paper shows how the Dutch Disease has affected the Russian economy since the start of the transition in the early 1990s. Four symptoms have been detected, namely: 1) a real exchange rate appreciation, 2) a temporary improved economic situation, 3) an output decline in the non-booming-sector, 4) an export reduction in the non-booming-sector. An extended version of the Balassa-Samuelson model has been implemented to test symptom 1. Our results suggest a positive long-run cointegration relationship between the real exchange rate and the oil price. A 7% real appreciation is caused by a 10% oil price shock. Moreover, a 10% increase in oil prices leads to a 2% GDP growth, while a 10% real appreciation is associated with a 2.1% output decline. The total effect on GDP growth, considering the Balassa-Samuelson effect, confirms symptom 2. Finally, the domestic industrial production drops and high-tech and textile exports are crowed out. This indicates that the Russian economy is also affected by symptoms 3 and 4. We conclude that Russia's government should invest the tax revenues collected from the resource sector such that the structure of the economy becomes more diversified and less vulnerable to exogenous shocks.

Suggested Citation

  • Algieri, Bernardina, 2004. "The Effects Of The Dutch Disease In Russia," Discussion Papers 18721, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:18721
    DOI: 10.22004/ag.econ.18721
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/18721/files/dpdp0083.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.18721?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alena Petrushkevich, 2013. "Russian Federation: Drivers and Challenges of Economic Growth and Development," Competence Centre on Money, Trade, Finance and Development 1305, Hochschule fuer Technik und Wirtschaft, Berlin.
    2. Dülger, Fikret & Lopcu, Kenan & Burgaç, Almıla & Ballı, Esra, 2013. "Is Russia suffering from Dutch Disease? Cointegration with structural break," Resources Policy, Elsevier, vol. 38(4), pages 605-612.
    3. Ali Taiebnia & Gity Shakeri, 2012. "The Impact of Oil Price Rise on Industrial Production," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 17(1), pages 13-31, winter.
    4. Niftiyev, Ibrahim, 2022. "Exclusive Linear Modeling Approach to the Natural Resource Curse in the Azerbaijani Economy: Examples of Stepwise Regression," EconStor Preprints 266036, ZBW - Leibniz Information Centre for Economics.
    5. João Sousa Andrade & António Portugal Duarte, 2013. "The Dutch Disease in the Portuguese Economy," GEMF Working Papers 2013-05, GEMF, Faculty of Economics, University of Coimbra.
    6. Bernardina Algieri, 2007. "Trade Specialisation Dynamics in Russia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(2), pages 232-258, June.

    More about this item

    Keywords

    Political Economy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ubzefd:18721. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/zefbnde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.