Terms of trade shocks and structural adjustment in a small open economy

Fardmanesh, Mohsen

doi:10.1016/0304-3878(90)90089-t

Cited by 18 publications

(14 citation statements)

References 9 publications

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“…Benjamin et a1. (1989) and Fardmanesh (1990) challenge the conclusions of the core model of Dutch disease; they argue that some 'developing countries have faced expansion of the manufacturing sector and decline of agriculture.…”

Section: Introductionmentioning

confidence: 95%

The transmission of Dutch disease and labour migration

Wahba¹

1998

The Journal of International Trade & Economic Development

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This paper examines the effects of the oil-boom in the Gulf states in the framework of a Dutch disease model. The model indicates that labour immigration may offset the effects of Dutch disease in the Gulf states. However, this may effectively shift the symptoms of Dutch disease to labour-exporting countries. Consequently, the theoretical model shows that through labour migration, Dutch disease can be transmitted to sending countries.Labour migration, Dutch disease, remittances, developing countries and Gulf countries,

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Section: Introductionmentioning

confidence: 95%

The transmission of Dutch disease and labour migration

Wahba¹

1998

The Journal of International Trade & Economic Development

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“…Two critiques of early Dutch disease theory are relevant to the research presented in this paper. Benjamin, Devarajan, and Weiner (1989), Fardmanesh (1990), and Fardmanesh (1991) point out that-contrary to the predictions of Dutch disease theory-in oil-exporting countries the manufacturing sector has grown rather than declined. 2 In fact, Dutch disease assumptions may not even hold true in the Netherlands, the country for which the term was coined (Hutchison 1994).…”

Section: Theoretical Foundationsmentioning

confidence: 84%

The influence of mineral exports on the variability of tropical deforestation

Sunderlin¹,

Wunder²

2000

Envir. Dev. Econ.

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Previous studies of deforestation have focused on agriculture, population and migration, timber exploitation, macroeconomic policies and geographic factors to explain the variability of deforestation rates among countries. This study tests the hypothesis that countries with a high proportion of petroleum or non-petroleum mineral exports in total exports experience a relatively low deforestation rate because of macroeconomic ‘Dutch disease’ effects. Bivariate and multivariate analyses provide preliminary support for the hypothesis, although they give little insight on how precisely mineral exports might exert their influence on forest cover. One reason for the limited utility of these methodologies is that they do not adequately explain the various effects of mineral windfalls that go beyond the Dutch disease's ‘core model’. Future research must attempt to understand these effects, which include: levels of funding for agriculture, roads, and directed settlement; agricultural protectionism; levels of rural poverty, urbanization, and consumer demand; the site-level effects of mineral extraction; and the variability of state autonomy.

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“…A plethora of empirical studies has investigated the existence of the Dutch disease in different countries. For example, Fardmanesh (1991Fardmanesh ( ) uses 1966Fardmanesh ( -1986 annual data on five oilexporting developing countries, namely, Algeria, Ecuador, Indonesia, Nigeria, and Venezuela to estimate a three-sector reduced form model and investigate the impact of an oil boom/price increase on the economy. The author finds that, on the one hand, under the pressure of the spending effect the agricultural sector shrinks and the non-traded goods and the protected manufacturing sectors expand.…”

Section: Related Literaturementioning

confidence: 99%

Has Algeria Suffered from the Dutch Disease? Evidence from 1960-2016 Data

Gasmi¹,

Laourari²

2018

Revue d'Économie Politique

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Algeria is strongly dependent on oil exports revenues to fuel its economy and following the 1986 oil counter-shock this country has experienced a persistent decline of its manufacturing sector. Although it has benefited from high oil prices over the last decades and implemented a myriad of economic reforms, Algeria has failed to develop its manufacturing sector and diversify its economy. One of the main mechanisms through which fluctuations in oil prices can constitute an impediment to the development of the manufacturing sector, and hence to long-term growth, in an economy that heavily relies on a natural resource exports is referred to in the literature as the Dutch disease. This paper aims to test whether or not Algeria's economy has suffered from the main symptoms of this syndrome by analyzing data covering more than half-a-century. More specifically, we use annual data from 1960 to 2016 and investigate two important implications of this phenomenon that occur following an oil boom, namely, the spending effect and the resource movement effect. We perform some simple tests of these signs of the Dutch disease using a set of regressions while controlling for some other factors that could have led to similar economic symptoms. The results do not allow us to unambiguously claim that the Algerian economy has suffered from the Dutch disease over the period under study.

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Terms of trade shocks and structural adjustment in a small open economy

Cited by 18 publications

References 9 publications

The transmission of Dutch disease and labour migration

The transmission of Dutch disease and labour migration

The influence of mineral exports on the variability of tropical deforestation

Has Algeria Suffered from the Dutch Disease? Evidence from 1960-2016 Data

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