Analysis of the Dutch Disease effect and public financial management in Mongolian economy

Hiroyuki Taguchi () and Bulgankhuu Ganzorig
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Bulgankhuu Ganzorig: Saitama University, Japan

Journal of Economics and Political Economy, 2018, vol. 5, issue 2, 132-145

Abstract: This paper aims to diagnose the Mongolian economy for evidence of the Dutch Disease by applying a vector auto-regression model for the period 1993 2016 under the current market-based regime including resource-booming times. The results indicate a strong possibility that the Mongolian economy has been suffering from Dutch Disease through resource movement and spending effects: the mining boom crowds out manufacturing and fails to contribute to capital accumulation facilitating diversification. Policy implications for Mongolian public financial management suggest using part of the resource fund for public investment in education, health and infrastructure to promote industrial diversification.

Keywords: Dutch Disease; Public financial management; Mongolian economy; Vector auto-regression; Public investment (search for similar items in EconPapers)
JEL-codes: F43 L60 O53 (search for similar items in EconPapers)
Date: 2018
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