Dealing with Dutch Disease

This note looks at so-called Dutch disease, a phenomenon reflecting changes in the structure of production in the wake of a favorable shock (such as a large natural resource discovery, a rise in the international price of an exportable commodity, o...

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Main Authors:	Brahmbhatt, Milan, Canuto, Otaviano, Vostroknutova, Ekaterina
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ABUNDANCE ADVERSE EFFECTS ADVERSE IMPACT AGGREGATE DEMAND AGRICULTURE AMERICAN ECONOMIC REVIEW BALANCE-OF-PAYMENTS CRISES BENCHMARK BUSINESS CLIMATE BUSINESS REGULATIONS CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CAPITAL INTENSITY CENTRAL BANK CIVIL WAR COLLATERAL COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMER PRICE CONSUMER PRICE INDEX DEBT DEBT LEVELS DEBT OVERHANG DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGY DISINFLATION DOMESTIC ECONOMY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTERDEPENDENCE ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC VOLATILITY ELASTICITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES EXPORT COMPETITIVENESS EXPORT GROWTH EXPORTERS EXPORTS EXTERNAL DEBT EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSETS FINANCIAL DEVELOPMENT FISCAL DISCIPLINE FISCAL POLICY FISCAL RULE FISCAL RULES FLEXIBLE EXCHANGE RATES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FUTURE GROWTH GDP GLOBALIZATION GOVERNMENT SPENDING GROWTH POTENTIAL INCOME INCOME GROUP INCOME LEVELS INCOMES INCREASING RETURNS INCREASING RETURNS TO SCALE INFLATION TARGETING INFLOWS OF CAPITAL INSTITUTIONAL WEAKNESSES INSTRUMENT INTERNATIONAL MONETARY FUND INVESTING INVESTMENT FUND INVESTMENT PROJECTS LDCS LIBERALIZATION LOW- INCOME COUNTRIES LOW-INCOME ECONOMIES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC VOLATILITY MACROECONOMICS MISMANAGEMENT MONETARY ECONOMICS MONETARY FUND MONETARY POLICY NATIONAL INCOME NATURAL RESOURCE NATURAL RESOURCES NEGATIVE IMPACT ON GROWTH NET EXPORTS OIL PRICE OPEN ECONOMY OUTPUT OVERVALUATION PERMANENT INCOME POLICY RESPONSE POLICY RESPONSES POSITIVE EFFECTS PRICE VOLATILITY PRIVATE CAPITAL PRIVATE INVESTMENT PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC GOODS PUBLIC SECTOR PUBLIC SPENDING REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL-EXCHANGE-RATE UNCERTAINTY RED TAPE RENT SEEKING REVIEW OF ECONOMICS SAVINGS STAGNATION TAX TRADE LIBERALIZATION TRADE SHOCKS UNEMPLOYMENT VALUE ADDED VOLATILITY WAGES WEALTH WORLD MARKET WORLD MARKET INTEGRATION
Online Access:	http://documents.worldbank.org/curated/en/2010/06/12365761/dealing-dutch-disease http://hdl.handle.net/10986/10174

id	okr-10986-10174
recordtype	oai_dc
spelling	okr-10986-101742021-04-23T14:02:49Z Dealing with Dutch Disease Brahmbhatt, Milan Canuto, Otaviano Vostroknutova, Ekaterina ABUNDANCE ADVERSE EFFECTS ADVERSE IMPACT AGGREGATE DEMAND AGRICULTURE AMERICAN ECONOMIC REVIEW BALANCE-OF-PAYMENTS CRISES BENCHMARK BUSINESS CLIMATE BUSINESS REGULATIONS CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CAPITAL INTENSITY CENTRAL BANK CIVIL WAR COLLATERAL COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMER PRICE CONSUMER PRICE INDEX DEBT DEBT LEVELS DEBT OVERHANG DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGY DISINFLATION DOMESTIC ECONOMY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTERDEPENDENCE ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC VOLATILITY ELASTICITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES EXPORT COMPETITIVENESS EXPORT GROWTH EXPORTERS EXPORTS EXTERNAL DEBT EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSETS FINANCIAL DEVELOPMENT FISCAL DISCIPLINE FISCAL POLICY FISCAL RULE FISCAL RULES FLEXIBLE EXCHANGE RATES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FUTURE GROWTH GDP GLOBALIZATION GOVERNMENT SPENDING GROWTH POTENTIAL INCOME INCOME GROUP INCOME LEVELS INCOMES INCREASING RETURNS INCREASING RETURNS TO SCALE INFLATION TARGETING INFLOWS OF CAPITAL INSTITUTIONAL WEAKNESSES INSTRUMENT INTERNATIONAL MONETARY FUND INVESTING INVESTMENT FUND INVESTMENT PROJECTS LDCS LIBERALIZATION LOW- INCOME COUNTRIES LOW-INCOME ECONOMIES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC VOLATILITY MACROECONOMICS MISMANAGEMENT MONETARY ECONOMICS MONETARY FUND MONETARY POLICY NATIONAL INCOME NATURAL RESOURCE NATURAL RESOURCES NEGATIVE IMPACT ON GROWTH NET EXPORTS OIL PRICE OPEN ECONOMY OUTPUT OVERVALUATION PERMANENT INCOME POLICY RESPONSE POLICY RESPONSES POSITIVE EFFECTS PRICE VOLATILITY PRIVATE CAPITAL PRIVATE INVESTMENT PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC GOODS PUBLIC SECTOR PUBLIC SPENDING REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL-EXCHANGE-RATE UNCERTAINTY RED TAPE RENT SEEKING REVIEW OF ECONOMICS SAVINGS STAGNATION TAX TRADE LIBERALIZATION TRADE SHOCKS UNEMPLOYMENT VALUE ADDED VOLATILITY WAGES WEALTH WORLD MARKET WORLD MARKET INTEGRATION This note looks at so-called Dutch disease, a phenomenon reflecting changes in the structure of production in the wake of a favorable shock (such as a large natural resource discovery, a rise in the international price of an exportable commodity, or the presence of sustained aid or capital inflows). Where the natural resources discovered are oil or minerals, a contraction or stagnation of manufacturing and agriculture could accompany the positive effects of the shock, according to the theory. The note considers channels through which such natural resource wealth can affect the economy. It also focuses on the development implications of Dutch disease, particularly the potential negative effects related to productivity dynamics and volatility; and concludes with a summary of possible policy responses, including the mix of fiscal, exchange rate, and structural reform policies. 2012-08-13T10:38:06Z 2012-08-13T10:38:06Z 2010-06 http://documents.worldbank.org/curated/en/2010/06/12365761/dealing-dutch-disease http://hdl.handle.net/10986/10174 English Economic Premise; No. 16 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABUNDANCE ADVERSE EFFECTS ADVERSE IMPACT AGGREGATE DEMAND AGRICULTURE AMERICAN ECONOMIC REVIEW BALANCE-OF-PAYMENTS CRISES BENCHMARK BUSINESS CLIMATE BUSINESS REGULATIONS CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CAPITAL INTENSITY CENTRAL BANK CIVIL WAR COLLATERAL COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMER PRICE CONSUMER PRICE INDEX DEBT DEBT LEVELS DEBT OVERHANG DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGY DISINFLATION DOMESTIC ECONOMY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTERDEPENDENCE ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC VOLATILITY ELASTICITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES EXPORT COMPETITIVENESS EXPORT GROWTH EXPORTERS EXPORTS EXTERNAL DEBT EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSETS FINANCIAL DEVELOPMENT FISCAL DISCIPLINE FISCAL POLICY FISCAL RULE FISCAL RULES FLEXIBLE EXCHANGE RATES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FUTURE GROWTH GDP GLOBALIZATION GOVERNMENT SPENDING GROWTH POTENTIAL INCOME INCOME GROUP INCOME LEVELS INCOMES INCREASING RETURNS INCREASING RETURNS TO SCALE INFLATION TARGETING INFLOWS OF CAPITAL INSTITUTIONAL WEAKNESSES INSTRUMENT INTERNATIONAL MONETARY FUND INVESTING INVESTMENT FUND INVESTMENT PROJECTS LDCS LIBERALIZATION LOW- INCOME COUNTRIES LOW-INCOME ECONOMIES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC VOLATILITY MACROECONOMICS MISMANAGEMENT MONETARY ECONOMICS MONETARY FUND MONETARY POLICY NATIONAL INCOME NATURAL RESOURCE NATURAL RESOURCES NEGATIVE IMPACT ON GROWTH NET EXPORTS OIL PRICE OPEN ECONOMY OUTPUT OVERVALUATION PERMANENT INCOME POLICY RESPONSE POLICY RESPONSES POSITIVE EFFECTS PRICE VOLATILITY PRIVATE CAPITAL PRIVATE INVESTMENT PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC GOODS PUBLIC SECTOR PUBLIC SPENDING REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL-EXCHANGE-RATE UNCERTAINTY RED TAPE RENT SEEKING REVIEW OF ECONOMICS SAVINGS STAGNATION TAX TRADE LIBERALIZATION TRADE SHOCKS UNEMPLOYMENT VALUE ADDED VOLATILITY WAGES WEALTH WORLD MARKET WORLD MARKET INTEGRATION
spellingShingle	ABUNDANCE ADVERSE EFFECTS ADVERSE IMPACT AGGREGATE DEMAND AGRICULTURE AMERICAN ECONOMIC REVIEW BALANCE-OF-PAYMENTS CRISES BENCHMARK BUSINESS CLIMATE BUSINESS REGULATIONS CAPITA GROWTH CAPITAL FLOWS CAPITAL INFLOWS CAPITAL INTENSITY CENTRAL BANK CIVIL WAR COLLATERAL COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMER PRICE CONSUMER PRICE INDEX DEBT DEBT LEVELS DEBT OVERHANG DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGY DISINFLATION DOMESTIC ECONOMY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTERDEPENDENCE ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC VOLATILITY ELASTICITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES EXPORT COMPETITIVENESS EXPORT GROWTH EXPORTERS EXPORTS EXTERNAL DEBT EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSETS FINANCIAL DEVELOPMENT FISCAL DISCIPLINE FISCAL POLICY FISCAL RULE FISCAL RULES FLEXIBLE EXCHANGE RATES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FUTURE GROWTH GDP GLOBALIZATION GOVERNMENT SPENDING GROWTH POTENTIAL INCOME INCOME GROUP INCOME LEVELS INCOMES INCREASING RETURNS INCREASING RETURNS TO SCALE INFLATION TARGETING INFLOWS OF CAPITAL INSTITUTIONAL WEAKNESSES INSTRUMENT INTERNATIONAL MONETARY FUND INVESTING INVESTMENT FUND INVESTMENT PROJECTS LDCS LIBERALIZATION LOW- INCOME COUNTRIES LOW-INCOME ECONOMIES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC VOLATILITY MACROECONOMICS MISMANAGEMENT MONETARY ECONOMICS MONETARY FUND MONETARY POLICY NATIONAL INCOME NATURAL RESOURCE NATURAL RESOURCES NEGATIVE IMPACT ON GROWTH NET EXPORTS OIL PRICE OPEN ECONOMY OUTPUT OVERVALUATION PERMANENT INCOME POLICY RESPONSE POLICY RESPONSES POSITIVE EFFECTS PRICE VOLATILITY PRIVATE CAPITAL PRIVATE INVESTMENT PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC GOODS PUBLIC SECTOR PUBLIC SPENDING REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL-EXCHANGE-RATE UNCERTAINTY RED TAPE RENT SEEKING REVIEW OF ECONOMICS SAVINGS STAGNATION TAX TRADE LIBERALIZATION TRADE SHOCKS UNEMPLOYMENT VALUE ADDED VOLATILITY WAGES WEALTH WORLD MARKET WORLD MARKET INTEGRATION Brahmbhatt, Milan Canuto, Otaviano Vostroknutova, Ekaterina Dealing with Dutch Disease
relation	Economic Premise; No. 16
description	This note looks at so-called Dutch disease, a phenomenon reflecting changes in the structure of production in the wake of a favorable shock (such as a large natural resource discovery, a rise in the international price of an exportable commodity, or the presence of sustained aid or capital inflows). Where the natural resources discovered are oil or minerals, a contraction or stagnation of manufacturing and agriculture could accompany the positive effects of the shock, according to the theory. The note considers channels through which such natural resource wealth can affect the economy. It also focuses on the development implications of Dutch disease, particularly the potential negative effects related to productivity dynamics and volatility; and concludes with a summary of possible policy responses, including the mix of fiscal, exchange rate, and structural reform policies.
format	Publications & Research :: Brief
author	Brahmbhatt, Milan Canuto, Otaviano Vostroknutova, Ekaterina
author_facet	Brahmbhatt, Milan Canuto, Otaviano Vostroknutova, Ekaterina
author_sort	Brahmbhatt, Milan
title	Dealing with Dutch Disease
title_short	Dealing with Dutch Disease
title_full	Dealing with Dutch Disease
title_fullStr	Dealing with Dutch Disease
title_full_unstemmed	Dealing with Dutch Disease
title_sort	dealing with dutch disease
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2010/06/12365761/dealing-dutch-disease http://hdl.handle.net/10986/10174
_version_	1764412124119957504

Dealing with Dutch Disease

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