Boom goes the price:giant resource discoveries and real exchange rate appreciation

We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. A giant discovery with the value of 10% of a country's GDP appreciates the real exchange rate by 1.5% within 10 years following the discovery. The appreciation starts before production starts and the non-traded component of the real exchange rate drives the appreciation. Labor reallocates from the traded goods sector to the non-traded goods sector, leading to changes in labor productivity. These findings provide direct evidence on the channels central to the theories of the Dutch disease and the Balassa-S... Mehr ...

Verfasser: Harding, Torfinn
Stefanski, Radoslaw
Toews, Gerhard
Dokumenttyp: Artikel
Erscheinungsdatum: 2020
Reihe/Periodikum: Harding , T , Stefanski , R & Toews , G 2020 , ' Boom goes the price : giant resource discoveries and real exchange rate appreciation ' , The Economic Journal , vol. 130 , no. 630 , pp. 1715-1728 . https://doi.org/10.1093/ej/ueaa016
Schlagwörter: Real exchange rates / Natural resource discoveries / Dutch disease / Oil / Balassa-Samuelson effect
Sprache: Englisch
Permalink: https://search.fid-benelux.de/Record/base-29041860
Datenquelle: BASE; Originalkatalog
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Link(s) : https://research-portal.st-andrews.ac.uk/en/researchoutput/boom-goes-the-price(451a2be5-f691-4087-a1ad-f69eb69e6a01).html

We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. A giant discovery with the value of 10% of a country's GDP appreciates the real exchange rate by 1.5% within 10 years following the discovery. The appreciation starts before production starts and the non-traded component of the real exchange rate drives the appreciation. Labor reallocates from the traded goods sector to the non-traded goods sector, leading to changes in labor productivity. These findings provide direct evidence on the channels central to the theories of the Dutch disease and the Balassa-Samuelson effect.