Construct · 1 fields · 1 citations

Dutch disease: a standalone construct

One name. One construct. A landmark on the map.

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Dutchdisease1 CONSTRUCTDutch diseaseCORDEN & NEARY · 1982

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International economics

A resource boom that hollows out other exports

Dutch disease is the pattern in which a boom in one export sector, typically a natural-resource discovery, raises the real exchange rate and pulls labour and capital toward the booming sector and non-tradables, squeezing a country's other traded industries such as manufacturing. Corden and Neary's 1982 Booming sector and de-industrialisation in a small open economy gave the canonical model, separating a resource-movement effect from a spending effect. The referent is a macroeconomic adjustment of a small open economy to a sectoral boom, and it anchors the wider 'resource curse' literature.[1]

Unit
The contraction of lagging traded sectors as a boom raises the real exchange rate
Recovery means
Not applicable
Measured by
Traced through real-exchange-rate appreciation and shifts in output and employment away from non-booming traded sectors

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Nearby constructs

boom2 fields · 2 citationsjingle · one word, two constructscapital2 fields · 3 citationsjingle · one word, two constructsexchange4 fields · 7 citationsjingle · one word, four constructs

References

  1. Corden, W. M., & Neary, J. P. (1982). Booming sector and de-industrialisation in a small open economy. The Economic Journal, 92(368), 825–848. https://doi.org/10.2307/2232670

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