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Discovering the signs of Dutch disease in Russia

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  • Mironov, V.V.
  • Petronevich, A.V.

Abstract

​This paper examines the problem of Dutch disease in Russia during the oil boom of the 2000s, from both the theoretical and empirical points of view. Our analysis is based on the classical model of Dutch disease by Corden and Neary (1982). We examine the relationship between changes in the real effective exchange rate of the ruble and the evolution of the Russian economic structure during the period 2002 – 2013. We empirically test the main effects of Dutch disease, controlling for specific features of the Russian economy, namely the large role of state-owned organizations. We estimate the resource movement and spending effects as determined by the theoretical model and find the presence of several signs of Dutch disease: the negative impact of the real effective exchange rate on growth in the manufacturing sector, the growth of total income of workers, and the positive link between the real effective exchange rate and returns on capital in all three sectors. Although also predicted by the model and clearly observable, the shift of labor from manufacturing to services cannot be explained by ruble appreciation alone. Publication keywords: Dutch disease, resource curse, real effective exchange rate, cointegration model, economic policy, Russia

Suggested Citation

  • Mironov, V.V. & Petronevich, A.V., 2015. "Discovering the signs of Dutch disease in Russia," BOFIT Discussion Papers 3/2015, Bank of Finland, Institute for Economies in Transition.
  • Handle: RePEc:bof:bofitp:2015_003
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    References listed on IDEAS

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    Cited by:

    1. Mahadeo, Scott M.R. & Heinlein, Reinhold & Legrenzi, Gabriella D., 2019. "Energy contagion analysis: A new perspective with application to a small petroleum economy," Energy Economics, Elsevier, vol. 80(C), pages 890-903.
    2. Ville Kaitila, 2016. "GDP growth in Russia: different capital stock series and the terms of trade," Post-Communist Economies, Taylor & Francis Journals, vol. 28(2), pages 129-145, April.
    3. Mironov, Valeriy V. & Petronevich, Anna V., 2015. "Discovering the signs of Dutch disease in Russia," Resources Policy, Elsevier, vol. 46(P2), pages 97-112.
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    9. Gasmi, Farid & Laourari, Imène, 2017. "Has Algeria suffered from the dutch disease?: Evidence from 1960–2013 data," TSE Working Papers 17-780, Toulouse School of Economics (TSE).
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    11. Chuffart, Thomas & Hooper, Emma, 2019. "An investigation of oil prices impact on sovereign credit default swaps in Russia and Venezuela," Energy Economics, Elsevier, vol. 80(C), pages 904-916.
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    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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