Dutch Disease and the Mitigation: Evidence from Canadian Provinces

Michel Beine, Serge Coulombe and Wessel Vermeulen

No 151, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: This paper evaluates whether immigration can mitigate the Dutch disease effects associated with booms in natural resource sectors. We derive predicted changes in the size of the non-tradable sector from a small general-equilibrium model `a la Obstfeld-Rogoff. Using data for Canadian provinces, we find evidence that aggregate immigration mitigates the increase in the size of the non-tradable sector in booming regions. The mitigation effect is due mostly to interprovincial migration and temporary foreign workers. There is no evidence of such an effect for permanent international immigration. Interprovincial migration also results in a spreading effect of Dutch disease from booming to non-booming provinces.

Keywords: Natural Resources; Dutch Disease; Immigration; Mitigation Effect (search for similar items in EconPapers)
JEL-codes: F22 O15 R11 R15 (search for similar items in EconPapers)
Date: 2015-01-27
New Economics Papers: this item is included in nep-ene, nep-mig and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:oxf:oxcrwp:151

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