Alternative Sources of Dutch Disease: A Survey of the Literature

Nuno Baetas da Silva (), João Andrade and António Portugal Duarte
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Nuno Baetas da Silva: Faculdade de Economia da Universidade de Coimbra, Grupo de Estudos Monetários e Financeiros (GEMF)

No 2016-10, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: This work reviews the literature on the alternative sources of Dutch Disease. We discuss the so-called Core Model of Dutch Disease, its limitations, extensions and the main contributions to the most recent theoretical and empirical methodologies of the Dutch Disease Economics applied to alternative capital inflows. By analyzing the effects associated with foreign aid, remittances, foreign direct investment and tourism on the real exchange rate and on the manufacturing sector, we set the stage both on the theoretical ground and on empirical evidence for a wider application of Dutch Disease classical approach. While the core model of Dutch Disease makes unambiguously predictions regarding the negative effects of a resource boom on the manufacturing sector, the empirical literature on the alternative sources of the disease that has followed has not clearly identified such effects.

Keywords: Dutch Disease; De-industrialization; Resource Boom; Capital Inflows. (search for similar items in EconPapers)
JEL-codes: F2 F41 O14 Q33 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2016-07
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Citations: View citations in EconPapers (1)

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