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Dutch Disease, factor mobility, and the Alberta Effect: the case of federations

Ohad Raveh ()

Canadian Journal of Economics, 2013, vol. 46, issue 4, 1317-1350

Abstract: Do reduced costs of factor mobility mitigate Dutch Disease effects to the extent that they are reversed? The case of federations provides an indication they do. We observe resource blessing (curse) effects at the provincial (federal) level, and argue the difference in outcomes stems from the difference in factor mobility costs. We construct a simple tax competition model which shows that if factor mobility costs are sufficiently low, a resourceboom triggers an Alberta Effect that mitigates, and possibly reverses, Dutch Disease symptoms. The paper concludes with empirical evidence for the main implications of the model.

JEL-codes: Q33 R50 (search for similar items in EconPapers)
Date: 2013
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Journal Article: Dutch Disease, factor mobility, and the Alberta Effect: the case of federations (2013) Downloads
Working Paper: Dutch Disease, Factor Mobility, and the Alberta Effect: The case of federations (2012) Downloads
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