IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

An Empirical Analysis of a Regional Dutch Disease: The case of Canada

  • Elissaios Papyrakis
  • Ohad Raveh
Registered author(s):

    While there has been extensive research on the Dutch Disease (DD) very little attention, if any, has been devoted to the regional mechanisms through which it may manifest itself. This is the first empirical attempt to research a 'regional DD' by looking at the local and spatial impacts of resource windfalls across Canadian provinces and territories. We construct a new panel dataset to examine separately the key DD channels; namely, the Spending Effect (SE) and the Resource Movement Effect (RME). Our analysis reveals that the standard DD mechanisms are also relevant at the regional level; specifically, we find that: (a) Resource windfalls are associated with higher inflation and a labor (capital) shift from (to) non-primary tradable sectors. (b) Resource windfalls in neighboring regions are associated with a capital (labor) shift from (to) non-primary tradable sectors in the sourc eregion. (c) The (spatial) DD explains (51%) 20% of the adverse effects of resource windfalls (in neighboring regions) on region-specific non-mineral international exports (in the source region), and does not significantly affect domestic ones.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford in its series OxCarre Working Papers with number 106.

    in new window

    Date of creation: 2013
    Date of revision:
    Handle: RePEc:oxf:oxcrwp:106
    Contact details of provider: Postal: Manor Road, Oxford, OX1 3UQ
    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Stephen G. Cecchetti & Nelson C. Mark & Robert J. Sonora, 2002. "Price Index Convergence Among United States Cities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1081-1099, November.
    2. Raghuram G. Rajan & Arvind Subramanian, 2009. "Aid, Dutch Disease, and Manufacturing Growth," Working Papers 196, Center for Global Development.
    3. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    4. Acosta, Pablo A. & Lartey, Emmanuel K.K. & Mandelman, Federico S., 2009. "Remittances and the Dutch disease," Journal of International Economics, Elsevier, vol. 79(1), pages 102-116, September.
    5. Beine, Michel & Bos, Charles S. & Coulombe, Serge, 2012. "Does the Canadian economy suffer from Dutch disease?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 468-492.
    6. Kausik Chaudhuri, 2001. "Long-run prices of primary commodities and oil prices," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 531-538.
    7. Joshua Aizenman & Jaewoo Lee, 2010. "Real Exchange Rate, Mercantilism And The Learning By Doing Externality," Pacific Economic Review, Wiley Blackwell, vol. 15(3), pages 324-335, 08.
    8. Emmanuel K.K. Lartey & Federico S. Mandelman & Pablo A. Acosta, 2008. "Remittances, exchange rate regimes, and the Dutch disease: a panel data analysis," FRB Atlanta Working Paper No. 2008-12, Federal Reserve Bank of Atlanta.
    9. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
    10. Xiaobo Zhang & Li Xing & Shenggen Fan & Xiaopeng Luo, 2008. "Resource abundance and regional development in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(1), pages 7-29, 01.
    11. Paldam, Martin, 1997. "Dutch disease and rent seeking: The Greenland model," European Journal of Political Economy, Elsevier, vol. 13(3), pages 591-614, September.
    12. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    13. Michael W.M. Roos, 2003. "Regional price levels in Germany," ERSA conference papers ersa03p511, European Regional Science Association.
    14. Amuedo-Dorantes, Catalina & Pozo, Susan, 2004. "Workers' Remittances and the Real Exchange Rate: A Paradox of Gifts," World Development, Elsevier, vol. 32(8), pages 1407-1417, August.
    15. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
    16. Walter W. McMahon, 1991. "Geographical Cost of Living Differences: An Update," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 426-450.
    17. Slesnick, Daniel T., 2002. "Prices and Regional Variation in Welfare," Journal of Urban Economics, Elsevier, vol. 51(3), pages 446-468, May.
    18. Jackline Wahba, 1998. "The transmission of Dutch disease and labour migration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(3), pages 355-365.
    19. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-80, November.
    20. Isabell Adenauer & Laurence Vagassky, 1998. "Aid and the real exchange rate: Dutch disease effects in African countries," Intereconomics: Review of European Economic Policy, Springer, vol. 33(4), pages 177-185, July.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:oxf:oxcrwp:106. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Celia Kingham)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.