EconPapers    
Economics at your fingertips  
 

How to neutralize the Dutch disease notwithstanding the natural resources curse

Bresser-Pereira, Luiz Carlos

No 452, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)

Abstract: This paper discusses two closely related concepts – the Dutch disease and the natural resource curse – and a third one, exchange rate populism, associated to the curse. The Dutch disease is a long-term overvaluation of the national currency that originates from the exports of commodities which originate Ricardian rents. The natural resource curse is the generalized rent-seeking that takes over a country that exports commodities. And exchange rate populism is a political practice of keeping the national currency overvalued, so to assure reelection to the politician. This paper shows that the curse and the populism will make difficult for a country to neutralize the Dutch disease, which blocks investment and growth, but argues that the fight against the natural resource curse and the exchange rate populism will be strengthened if the policymakers realize that there is a relatively simple policy that effectively neutralize the disease – a policy that was sketched almost ten years ago (Bresser-Pereira 2009), but remains hardly known by economists.

New Economics Papers: this item is included in nep-dcm, nep-ene and nep-opm
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://bibliotecadigital.fgv.br/dspace/bitstream/1 ... resser%20Pereira.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fgv:eesptd:452

Access Statistics for this paper

More papers in Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil) Contact information at EDIRC.
Bibliographic data for series maintained by Núcleo de Computação da FGV EPGE ().

 
Page updated 2019-11-10
Handle: RePEc:fgv:eesptd:452