The Dutch Disease Revisited: Theory and Evidence

Contrary to empirical evidence, the Dutch disease hypothesis, driven by Learning By Doing (LBD), does not predict the steady-state real exchange rate appreciation and economic growth deceleration due to a resource boom. To do so, I first represent a simple model to fill the theory's gap, and then adopt a dynamic panel data approach for a sample of 132 countries over the period 1970-2014 to re-evaluate both symptoms of the hypothesis in systematic analysis. The main findings are threefold. First, a resource boom appreciates the real exchange rate. Second, the real exchange rate appreciation dec... Mehr ...