What is the meaning of Dutch disease?
Dutch disease is a shorthand way of describing the paradox which occurs when good news, such as the discovery of large oil reserves, harms a country's broader economy. It may begin with a large influx of foreign cash to exploit a newfound resource.
Why is it called the Dutch disease?
The Dutch disease term was first introduced in The Economist magazine in 1977 to analyze the economic situation in the Netherlands (hence the name) after the discovery of large natural gas fields in 1959.
What are the symptoms of the Dutch disease?
In Section III, using our econometric model, we test for the main symptoms of Dutch Disease, which include (1) real appreciation, (2) a slowdown in manufacturing growth, (3) an acceleration in service sector growth (provided the spending effect dominates the resource movement effect), and (4) an increase in the overall …
What is the Dutch disease for kids?
Related resources for this article Dutch elm disease is a fatal disease of elm trees, caused by fungus Ceratostomella ulmi; carried chiefly by European elm bark beetle; fungus spreads through the sapwood, destroying tree's circulatory system; diseased branches and trees must be removed and burned; first appeared in e.
Does Australia have Dutch disease?
The estimation found evidence of Dutch disease in Australia. The commodity price shock increased the real exchange rate by 1.2% point more than five years, which had immediate positive effect on the level domestic real GDP and resource output.
What is Dutch disease in oil and gas?
The Dutch disease The dominant economic explanation of the resource curse is the “Dutch disease”. According to Humphreys et al. (2007) the Dutch disease is a shift from the hitherto productive sectors such as agriculture and manufacturing to the non-tradable sectors such as resource export and construction industry.
How is Dutch disease related to the resource curse?
The 'Dutch disease', a phenomenon frequently referred to in 'resource curse' literature, was first used to describe the Dutch economic experience where the manufacturing sector declined and suffered general inflation as a result of the booming natural gas sector.