Remittances and the Dutch Disease: an empirical analysis in the context of Ethiopia

AbstractThe Dutch Disease, initially associated with natural resource discovery, has evolved to include various capital inflows. This study investigates the relationship between remittance inflows and the Dutch Disease in Ethiopia, focusing on the real effective exchange rate. Using a 30-year time series (1991–2020) and a Vector Error Correction Model, the study finds a robust long-run relationship among remittances, official development assistance, money supply, terms of trade, domestic credit, and real gross domestic product. The empirical results reveal that remittances, along with other va... Mehr ...