Dutch Disease, Resource Curse and Development*

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3. STANDARD THEORIES UNCTAD Division on Technology and Logistics - Knowledge Sharing, Training and Capacity Development Branch 6
Dutch Disease: The Standard Model I • static model of Dutch Disease by Corden/Neary (1982) • Three representative commodities: traditional tradables, especially manufactured goods (M), nontradable sector, primarily services (S), boom sector (E), e.g. fossil energy; note: agricultural goods are in principle also tradables • Assumtpions I: small open economy: the world market prices for tradables and natural resources are given: real exchange rate = Y S /Y M (Y is output) • Assumptions II: (1) full employment (2) no spending for capital accumulation (3) international capital immobility so that saving of windfalls abroad is excluded (4) hence capital account and current account are in balance (5) inflation is excluded (only a one-time price increase in non-tradables) (6) no money (Barter economy) and no nominal exchange rate, hence no monetary and exchange rate policy (7) no interest rate (8) no UNCTAD Division on Technology and Logistics - Knowledge Sharing, Training and Capacity Development Branch 7
Page 1 and 2: *based on Teaching Material on “D
Page 3 and 4: 1. Introduction • Dutch Disease (
Page 5: Focus on Institutions and “Good G
Page 9 and 10: Dutch Disease: The Standard Model I
Page 11 and 12: Resource Curse I • Sachs/Warner (
Page 13 and 14: Resource Curse III Figure 3: Growth
Page 15 and 16: 4. DEBATES ON STANDARD THEORIES: LI
Page 17 and 18: Limitations, Shortcomings, Criticis
Page 19 and 20: Empirical Evidence for DD and RC I
Page 21 and 22: Empirical evidence III • Oil boom
Page 23 and 24: % of GDP Empirical Evidence for DD
Page 25 and 26: Nigeria, Iran, Algeria, Sambia, Sau
Page 27 and 28: Empirical evidence IX: External Sav
Page 29 and 30: Nigeria - Dutch disease, Resource C
Page 31 and 32: Venezuela - no growth despite oilab
Page 33 and 34: US$, p.c. index, 2005 = 100 Norway
Page 35 and 36: 6. COPING WITH DD AND RC : SEARCHIN
Page 37 and 38: Alternative Strategies for Resource
Page 39 and 40: 7. CONCLUSION AND OUTLOOK UNCTAD Di
Page 41 and 42: Conclusion and Outlook II • There

Dutch Disease, Resource Curse and Development*

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