Oil Stock Discovery and Dutch Disease

We set out a model of a two-good, small open economy exporting a traditional exportable in order to finance capital goods rental payments. We observe that the traditional export sector declines with an exogenous increase in the country's oil export earnings, while the local goods sector expands. For input price effects to emerge, land is needed as a third input. For the "large land" case, we can have imports of capital steadily decline as oil earnings expand. Earnings from oil sales are stationary under our annuitization construction.


Issue Date:
2009-11
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/273706
Language:
English
Total Pages:
22
JEL Codes:
F43; Q33; Q32
Series Statement:
Working Paper No. 1220




 Record created 2018-06-19, last modified 2020-10-28

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