BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Diagnosing Dutch disease: Does Russia have the symptoms?
() and Katerina Kalcheva
Abstract: In this paper, we assess whether recent economic
developments in Russia are symptomatic of Dutch Disease. We first provide a
brief review of the literature on Dutch Disease and the natural resource
curse. We then discuss the symptoms of Dutch Disease, which include (1)
real exchange rate appreciation; (2) slower manufacturing growth; (3)
faster service sector growth; and (4) higher overall wages. We test these
predictions for Russia while carefully controlling for other factors that
could have led to similar symptoms. We con-clude that, while Russia has all
of the symptoms, the diagnosis of Dutch Disease remains to be confirmed.
Keywords: Dutch disease; real exchange rate; resource curse; Russia; oil; transition; (follow links to similar papers)
JEL-Codes: F30; P28; Q30; (follow links to similar papers)
43 pages, April 20, 2007
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