Analysis of "Dutch Disease Effects" on Asian Economies

Hiroyuki Taguchi ()

MPRA Paper from University Library of Munich, Germany

Abstract: This chapter addresses the issue of the Dutch Disease in relationship with capital inflows through exporting natural resources, accepting foreign aids and emigrant remittances. The analysis focuses on Asian economies that are expected to sustain their growth, and adopts a vector auto-regression model with Granger causality and impulse response tests. The main finding are as follows. First, from the perspective of natural resource abundance in Asian economies, the Dutch Disease was identified for 1980-1995, but not for 1995-2014, probably because of their institutional improvements. Second, in the economies of Cambodia, Lao PDR, Myanmar and Vietnam, their accepted foreign aids have not caused the Ditch Disease and have rather promoted their economic growth, due to their aid contributions to infrastructure development. Third, regarding the Ditch Disease effects of emigrant remittances, the disease was verified in Nepal but not in Bangladesh, due to their different demand structures and policy efforts.

Keywords: Dutch Disease; Asian Economies; Capital Inflows; Natural Resources; Foreign Aids; Emigrant Remittances; and Vector Auto-regression (VAR) (search for similar items in EconPapers)
JEL-codes: F21 F24 O53 (search for similar items in EconPapers)
Date: 2016-12-30, Revised 2017-03-14
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (1)

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