An Empirical Analysis of a Regional Dutch Disease:The Case of Canada

Papyrakis, Elissaios and Raveh, Ohad (2014) An Empirical Analysis of a Regional Dutch Disease:The Case of Canada. Environmental and Resource Economics, 58 (2). pp. 179-198. ISSN 0924-6460

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Abstract

While there has been extensive research on the Dutch Disease (DD), very little attention, if any, has been devoted to the regional mechanisms through which it may manifest itself. This is the first empirical attempt to research a ‘regional DD’ by looking at the local and spatial impacts of resource windfalls across Canadian provinces and territories. We construct a new panel dataset to examine separately the key DD channels; namely, the Spending Effect and the Resource Movement Effect. Our analysis reveals that the standard DD mechanisms are also relevant at the regional level; specifically, we find that: (a) Resource windfalls are associated with higher inflation and a labour (capital) shift from (to) non-primary tradable sectors. (b) Resource windfalls in neighbouring regions are associated with a capital (labour) shift from (to) non-primary tradable sectors in the source region. (c) The (spatial) DD explains (51 %) 20 % of the adverse effects of resource windfalls (in neighbouring regions) on region-specific non-mineral international exports (in the source region), and does not significantly affect domestic ones.

Item Type: Article
Uncontrolled Keywords: exports,inflation,regional dutch disease
Faculty \ School: Faculty of Social Sciences > School of International Development
Depositing User: Pure Connector
Date Deposited: 17 Dec 2013 10:14
Last Modified: 31 Oct 2019 14:19
URI: https://ueaeprints.uea.ac.uk/id/eprint/45663
DOI: 10.1007/s10640-013-9698-z

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