OIL PRICES AND REAL EXCHANGE RATES

Fluctuations in oil prices during the last decade have reignited the interest in the Dutch Disease" hypothesis. The paper aims at identifying the presence of the Dutch Disease and at assessing the importance of choosing the exchange rate regime that is less vulnerable to the consequences of the Dutch Disease. Using threshold autoregressive (TAR) model, the paper tests the validity of the Dutch Disease hypothesis on the largest 19 oil-exporting countries. As a result two countries - Nigeria and Norway - were identi ed as experiencing the disease. The hypothesis that countries operating under a... Mehr ...