Dutch Disease in the post-soviet countries of Central and South-West Asia: How contagious is it?

Égert, Balázs

doi:10.1016/j.asieco.2012.04.005

Cited by 15 publications

(10 citation statements)

References 30 publications

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“…Their products become uncompetitive due to rising real exchange rate, coupled with an influx of foreign exchange into the country (E'gert, 2009;Dobrynskaya and Turkisch, 2009;E'gert, 2012). For example, in Kazakhstan, a huge increase in oil production and a reduction in the production of many traditional products in 1990-2014 was observed (Table 4 and 5) due to the growth in the real effective rate of Tenge at the same time.…”

Section: Main Results Of the Functioning Of Such A Modelmentioning

confidence: 99%

The Consequences of the Choice of an Economic Model for the Development of Cis Countries

Nurseiit¹

2017

EJEF

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The development of the CIS countries over showed that some of these countries use not a variation of traditional economic models (Anglo-American and German-Japanese), but an entirely new model. The article describes the main features of this model as the priority of the rule of patronizing over law; the alienation of the worker from the means of production and management; its dependence on natural rather than intellectual resources, and explains why its use results in low efficiency and high volatility of economic development in these countries. Therefore, the article suggests ways to change it to a more progressive one.

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Section: Main Results Of the Functioning Of Such A Modelmentioning

confidence: 99%

The Consequences of the Choice of an Economic Model for the Development of Cis Countries

Nurseiit¹

2017

EJEF

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“…Ultimately, massive government spending towards infrastructure projects and social programs boosted the spending effect [Hasanov, 2013]. Egert (2012) has argued that due to data issues, it is impossible to track resource movement and spending effects among the post-Soviet countries -including Azerbaijan -but concluded that increased oil prices resulted in appreciated nominal currency after certain time lags. Yun (2018) analyzed the connection between REER and manufacturing employment and between oil price and manufacturing output between 1991 and 2017 to conclude that there was significant de-industrialization and oil dependence in the Azerbaijan economy.…”

Section: Denial Of Dutch Diseasementioning

confidence: 99%

Dutch Disease Effects in the Azerbaijan Economy: Results of Multivariate Linear Ordinary Least Squares (OLS) Estimations

Niftiyev¹

2021

HSE Economic Journal

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This paper investigates the increased role of extractive industry, particularly oil and gas, within the Dutch disease model between 2000-2018 in the Azerbaijan economy. Dutch disease phenomenon befalls when the national economy produces and exports a single commodity or a particular sector becomes the booming sector. Increased exports of particular goods and spendings of the accumulated mineral revenue appreciate the national currency, decreasing the competitiveness and thus the production or export volume of the non-booming sectors. Azerbaijan is an oil and gas-rich country which naturally actualizes the existence of Dutch disease syndrome. Therefore, the purpose of this research is to separately reveal the Dutch disease effects of resource movement and spending effects based on the theoretical framework constructed from the core theory. The paper contains a comprehensive literature review and overall macroeconomic screening of the Azerbaijan economy to describe the preconditions of Dutch disease. Then, the study employs 42 multivariate linear ordinary least squares (OLS) estimations. The estimated models illustrate the presence of indirect de-industrialization (one form of resource movement effect) and the spending effect of the Dutch disease hypothesis. However, the paper does not find a direct negative influence of booming sectors on aggregated lagging (i.e., manufacturing and agriculture) and non-tradable sectors (services). Moreover, variables such as oil price growth rates, real effective exchange rate (REER), nominal effective exchange rate (NEER), and economic crisis periods failed to significantly explain the employment and real wages dynamics. However, these variables described certain influence channels in output and returns on capital growth rates. This paper sheds light on the interconnections between the Azerbaijan economy's labor resources, government spending, and monetary channels. These interconnections indicate that the Dutch disease hypothesis holds true for Azerbaijan. Of the estimated

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“…Concentrating the analysis of the DD phenomenon exclusively in the case of the Russian economy or comparing it with the rest of post-Soviet transition countries, several other authors (e.g., Bayulgen, 2005;Smirnova and Kulkarni, 2006;Korhonen and Juurikkala, 2007;Sosunov and Zamulin, 2007;Égert, 2012), have also investigated the presence or lack of DD problems by observing the export trend, the political factors associated with attracting FDI, and the impact of other macroeconomic monetary variables on the behaviour of the exchange rates in the Russian economy. Again, the results point to the absence of consensus regarding the presence of long-term negative effects resulting from the transmission mechanisms associated with the phenomenon of DD.…”

Section: Dutch Disease In Central and Eastern European Countries: Litmentioning

confidence: 99%

“…Large increases in oil prices have been considered responsible for economic recessions, high inflation, trade deficits, and high uncertainty, which all contribute to a decline in manufacturing growth and a loss of competitiveness following a strong real exchange rate appreciation. This leads directly to a deindustrialisation process (Caimcross, 1979;Égert and Leonard, 2008;Égert, 2012), manifested as a failure in output and employment in the manufacturing sector. Under these circumstances, most of the countries that experience a boom in natural resources tend to grow more slowly than countries without natural resources.…”

Section: Introductionmentioning

confidence: 99%

Dutch Disease in Central and Eastern European Countries

Andrade¹,

Duarte²

2017

Core-Periphery Patterns Across the European Union

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Bulgaria, Croatia, Estonia, Latvia, Lithuania, Hungary, Poland, Czech Republic, Romania, Slovenia, and Slovakia have all benefited from an increase of European Union capital transfers of funds since the demand for European integration. At the same time, foreign direct investments have risen, mainly due to the liberalisation of capital movements. The effects of those funds and the reduction of financial costs can be considered as analogous to the phenomenon known as Dutch Disease. That is to say, the inflow of financial transfers is also considered a curse. In order to eliminate this curse we must take into account the two effects associated with Dutch Disease: the 'spending effect' and the 'resource movement effect'. Public policies have not been appropriate and have not prevented the real exchange rate appreciation, thereby contributing to a poor performance in terms of competitiveness and economic growth. After a descriptive analysis of some variables, we estimate a set of equations that take account of the direct and indirect effects of European Union funds and financial costs on the economy where the effects on the real exchange rate play the major role.JEL Classification: C01, E23, F43, H63, J31.

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Dutch Disease in the post-soviet countries of Central and South-West Asia: How contagious is it?

Cited by 15 publications

References 30 publications

The Consequences of the Choice of an Economic Model for the Development of Cis Countries

The Consequences of the Choice of an Economic Model for the Development of Cis Countries

Dutch Disease Effects in the Azerbaijan Economy: Results of Multivariate Linear Ordinary Least Squares (OLS) Estimations

Dutch Disease in Central and Eastern European Countries

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