Can oil-led growth and structural change go hand in hand in Ghana? A multi-sector intertemporal general equilibrium assessment

Clemens Breisinger (), Xinshen Diao and Manfred Wiebelt

No 1784, Kiel Working Papers from Kiel Institute for the World Economy

Abstract: Unlike in Asia, the manufacturing sector has not (yet) become a driver of structural change in Africa. One common explanation is that the natural resource-focus of many African economies leads to Dutch disease effects. To test this argument for the case of newly found oil in Ghana we develop a multi-sector intertemporal general equilibrium model with endogenous savings and investment behavior. Results show that in addition to the well-known short-term Dutch disease effects, long-term structural effects can indeed impede Asian-style economic transformation in Ghana (and other resource rich countries). We also demonstrate how oil wealth may go hand in hand with structural change in the future.

Keywords: transformation; growth; structural change; oil revenue; Dutch disease; Ghana; intertemporal general equilibrium (search for similar items in EconPapers)
JEL-codes: C68 D58 D90 F43 O11 O41 O55 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1784

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