The Dutch Disease, the Staple Thesis, and the Recent Natural Resource Boom in South America

2015 ◽  
Keyword(s):  
South America ◽  
Natural Resource ◽  
Dutch Disease

Diagnosing the curse of natural resources in Kuwait

2018 ◽  
Vol 34 (2) ◽  
pp. 153-171
Author(s):  
Nayef Al-Shammari ◽  
Noura Al-Hossayan ◽  
Mariam Behbehani
Keyword(s):  
Exchange Rate ◽  
Natural Resource ◽  
Inflation Rate ◽  
Resource Curse ◽  
Dutch Disease ◽  
Real Effective Exchange Rate ◽  
Content Type ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the phenomenon of natural resource curse in an oil abundant economy of Kuwait. The study estimates a behavioral equilibrium exchange rate model for Kuwait during the period 1980-2014 to assess the impact of prices and productivity factors on real effective exchange rate. Design/methodology/approach It uses time series econometric techniques, such as unit root tests, Johansen cointegration test, Vector Error Correction Model, and Impulse Response Function, to estimate the model. Findings Unlike the results of the few other studies, the empirical results show a significant impact of the variables, such as balance of trade, economic growth, oil exports, interest rate, and inflation rate, on real effective exchange rate appreciation which indicates the existence of Dutch disease within the Kuwaiti economy. Similarly, the comparative analysis between changes in public expenditure and inflation rate shows the existence of Dutch disease in Kuwait during specific periods of time. Originality/value Natural resource curse or Dutch disease is a widely recognized phenomenon affecting the balance of economic activities in natural resource abundant countries. Symptoms of Dutch disease are perceived in several changes in the economy, particularly on price level, sectorial productivity, employment, and aggregate demand which in the long run worsen the country’s economic position and lower its international competitiveness. Dutch disease is not only a feature of natural resource abundant economies, but also can affect any economy with excessive revenue generating sector or high capital inflows which appreciates country’s exchange rate. However, the examination of Dutch disease in the economy is more important when investigating the impact on oil-producing countries (Apergis et al. 2014; Mohammadi and Jahan-Parvar, 2012; Jahan-Parvar and Mohammadi, 2011). Therefore, scholars studying Dutch disease phenomenon pay greater attention to cases of Dutch disease among oil-producing countries (i.e. Arezki and Ismail, 2013; Van der Ploeg and Venables, 2013; Jahan-Parvar, 2012; Cologni and Manera, 2013).

scholarly journals ESSAYS ON THE DUTCH DISEASE

2021 ◽  
Author(s):  
Nazanin Behzadan
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Exchange Rate ◽  
Income Distribution ◽  
Foreign Aid ◽  
Natural Resource ◽  
Dutch Disease ◽  
Equal Distribution ◽  
Resource Rents ◽  
Natural Resource Rents

In this dissertation I analyze the effect of within-country income inequality on economic outcomes. I develop a new model of international trade with non-homothetic preferences whereby within-country income distribution affects the pattern of trade and economic growth. An appreciation of the real exchange rate inducing a production shift to the sector with less long-run growth potential is known as the Dutch disease and in this model the disease is triggered by within-country income differences. First, I show that the Dutch disease can arise solely from inequality in the distribution of natural resource rents where the country with the less equal distribution will have less production of manufacturing goods and less development of learning-by-doing in this sector. As opposed to conventional models, where income distribution has no effect on economic outcomes, an unequal distribution of the resource wealth can generate the Dutch disease. In addition, alternative forms of foreign transfers, such as foreign aid and remittances, interact with the income distribution in dissimilar manners and generate differences in spending patterns, the real exchange rate, production patterns, and the pattern of international trade. I show that while foreign aid can cause economic stagnation, remittances can in fact foster economic growth. I also provide a range of empirical tests of the theoretical model, including both difference and system GMM estimations in a dynamic panel setting and disentangle the effects of inequality and institutional quality. My empirical analyses support the hypothesis that inequality indeed plays a significant role in whether being resource-rich is a blessing or a curse for a country. The more unequal is the distribution of natural resource rents, the stronger is the disease. Moreover, I verify my hypothesis that foreign aid and remittances are not similar in generating the Dutch disease using data from a panel of countries and industries covering the years 1991-2009 while controlling for the issues of omitted variable bias and the endogeneity of the transfers. Finally, a similar method is used in order to draw empirical evidence that lends credence to the positive relation between more equal distribution of resource rents and higher manufacturing growth.

Dutch Disease phenomenon and demand for international business travels: Panel ARDL/PMG estimation

2021 ◽  
pp. 135481662098313
Author(s):  
Hassan F Gholipour ◽  
Reza Tajaddini ◽  
Usama Al-mulali
Keyword(s):  
International Business ◽  
Natural Resource ◽  
Positive Impact ◽  
Dutch Disease ◽  
Annual Data ◽  
Panel Ardl ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Natural Resource Rents

This article explores the long-run and short-run effect of natural resource rents on inbound and outbound business travels in resource-abundant economies. By applying panel ARDL/PMG models for 25 countries with annual data for 2005–2017, our results show that increases in dependency on natural resources lead to lower demand for inbound and outbound business travels in the long run. The short-run analyses indicate that while natural resource rents have a significant and positive impact on outbound business travels, they do not affect inbound business travels.

BUDGET RULE AND TAX MANEUVER IN THE DESTRUCTIVE LIBERALIST CONCEPT OF THE BUDGET THREE-YEAR PLAN — 2021–2023

2021 ◽  
pp. 49-69
Author(s):  
S.G. Kapkanshchikov
Keyword(s):  
Natural Resource ◽  
Oil And Gas ◽  
Dutch Disease ◽  
Resource Extraction ◽  
Tax Rates ◽  
Natural Resource Extraction ◽  
Russian Economy ◽  
The Government ◽  
Excise Duties ◽  
Country Specific

The article reveals the conceptual defects of the designed and currently law-supported budget three-year plan — 2021–2023. Among them, the author includes the authorities’ desire to continue using a rigid budget rule and the implementation of tax maneuvers. The author argues that there is a direct link between the effects of the budget rule and deceleration of the GDP growth in Russia. Overcoming the country-specific recession and the problem of excessive focus of the Russian economy on natural resource extraction should arguably be driven by an increased share of the government spending on its diversification, which requires a substantial relaxation or cancelling of the budget rule. The author concludes that the tax maneuver presents a barrier to curing the «Dutch disease» of the country’s economy and therefore requires serious corrections while preserving excise duties on oil and gas exports and to the contrary, reducing the natural resource extraction tax rates.

scholarly journals Primary Resources, Secondary Labor: Natural Resources and Immigration Policy

2019 ◽  
Vol 63 (4) ◽  
pp. 805-818 ◽  
Author(s):  
Adrian J Shin
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Immigration Policy ◽  
Domestic Politics ◽  
Dutch Disease ◽  
Foreign Competition ◽  
Policy Makers ◽  
Business Interests ◽  
Resource Wealth ◽  
Natural Resource Wealth

AbstractThis article argues that substantial natural resource wealth leads to more restrictive low-skill immigration policy in advanced democracies. High-value natural resource production often crowds out labor-intensive firms that produce tradable goods. When these proimmigration business interests disappear due to deindustrialization, also known as the Dutch Disease, the proimmigration coalition weakens in domestic politics. Without strong business pressure for increased immigration, policy-makers close their doors to immigrants to accommodate anti-immigrant interests. Using a newly expanded dataset on immigration policy across twenty-four wealthy democracies, I find that oil-rich democracies are more likely to restrict low-skill immigration, especially when their economies are exposed to foreign competition in international trade. The results supplement the voter-based theories of immigration policy and contribute to an emerging literature on the political economy of natural resources and international migration.

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