Oil Stock Discovery and Dutch Disease

Kirk Hamilton and John Hartwick

No 273639, Queen's Economics Department Working Papers from Queen's University - Department of Economics

Abstract: We set out a model of a small open economy exporting oil and a traditional ex- portable in return for produced capital. The small open economy also has local produc- tion of a non-traded good. We rst observe that the size of the traditional export sector declines with an exogenous increase in the countrys oil stock. Strong Dutch disease (SDD) nvolves a net diminution in produced capital in use in the small open econ- omy after the oil discovery shock. SDD turns on the exportable sector being relatively capital intensive.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 12
Date: 2008-03
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Persistent link: https://EconPapers.repec.org/RePEc:ags:quedwp:273639

DOI: 10.22004/ag.econ.273639

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