Dutch Disease, Resource Curse and Development*
Dutch Disease, Resource Curse and Development*
Dutch Disease, Resource Curse and Development*
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Extraction Policy <strong>and</strong> use of resource rents<br />
• How much natural resource should be extracted How to<br />
use windfalls<br />
• Hotelling‘s Rule: extraction is conditional on maximization<br />
of rents - achieved if the long-term interest rate equals the<br />
expected net price increase of the natural resource. In<br />
reality, imperfect competition <strong>and</strong> high uncertainty<br />
predominate. Rule not really applicable under real world<br />
conditions<br />
• Hartwick-Rule stipulates that the loss of exhaustive<br />
natural resources by extraction can only be offset by using<br />
the resource rents for the generation of produced capital.<br />
Only the yields from this produced wealth should be be<br />
consumed. Rule for environmental sustainability<br />
• Neither the Hotelling-Rule nor the Hartwick-Rule deal<br />
directly with DD<br />
• Yet, containing DD is easier if the speed of extraction of 36<br />
UNCTAD Division on Technology <strong>and</strong> Logistics - Knowledge Sharing, Training <strong>and</strong> Capacity Development Branch
Change language