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Dutch Disease

"Dutch Disease" refers to an economic phenomenon where a country experiences a decline in the competitiveness of its non-resource sectors due to the appreciation of its currency resulting from a boom in natural resource exports.

Dutch Disease In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example, natural resources) and a decline in other sectors (like manufacturing or agriculture).

Resource Curse

¿Why Norway and Australia are richer than Chile? or ¿Why some natural resource export economies are more prosperous than others?

The resource curse = getting free money is bad for you. And being the banker of people who get free money is almost like getting free money yourself. The British don't have to build products if they can make money just from Russians and Saudis parking oil money here.

Absolutely, being the banker for nations grappling with the resource curse can inadvertently turn you into a money manager. It transforms them into rentiers, and you into custodians of wealth.

References

  • Davis, G. A. “Learning to Love the Dutch Disease: Evidence from the Mineral Economies.” World Development, no. 10 (1995).
  • Ranestad, Kristin. "The mining sectors in Chile and Norway, ca. 1870–1940: the development of a knowledge gap." Learning and Innovation in Natural Resource Based Industries. Routledge, 2020. 143-161.
  • Resource Based Economies:
  • Davis, G. A. “Learning to Love the Dutch Disease: Evidence from the Mineral Economies.” World Development, no. 10 (1995).
  • Auty, R. M. “Industrial Policy Reform in Six Large Newly Industrializing Countries: The Resource Curse Thesis.” World Development, no. 1 (1994).
  • Crafts, N. F. R. “Trade as an Engine of Growth: an Alternative View.” Economic Journal 83 (1973).
  • Kravis, I. “Trade as an Engine of Growth.” Economic Journal 80 (1970).