External shocks and adjustment in a mineral dependent economy: A short-run model for Zambia

40 Years of Dutch Disease Literature: Lessons for Developing Countries

“…Given the characteristics of Cameroon, they conclude that an oil boom positively affects the sectors of construction and of capital goods, but hampers cash crop production, forestry, food processing, and public services. Kayizzi-Mugerwa ( 1991 ) also applies a multisector general equilibrium model to Zambia to estimate the impact of booms and busts in international copper prices on sectoral output and exports under different policy scenarios. He distinguishes 7 sectors (agriculture, mining, manufacturing, construction, commerce, transport and communications, and services) and concludes that a boom in copper prices has a negative impact on manufacturing and transportation, but a positive impact on services (with no strong impact on other sectors) as predicted by DD.…”

The Dynamics of the Real Sector Growth in Zambia

“…The cyclical nature of the Zambian economy which is mineral dependent may be unsustainable in the long run; and the Zambian historical trajectory shows that rather than adopting structural changes, the Zambian authorities have resorted to increased foreign borrowing during lean periods (Auty, 1991;Kayizzi-Mugerwa, 1991). This situation may also affect advances in diversification efforts within the local economy or through import substitution, thereby increasing the risk of the economy returning back to economic instability, characterized by rising inflation and exchange-rate depreciations (Auty, 1991).…”