Booming Sector and De-Industrialisation in a Small Open Economy.¶
Corden, W. M., & Neary, J. P. (1982). Booming Sector and De-Industrialisation in a Small Open Economy. Economic Journal, 92(368), 825-848.
Cited by¶
2 citations across 2 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Unearned Windfall Mechanism Atrophy
- The atrophy follows — accountability decays because it is no longer needed to extract revenue; the non-resource economy loses competitiveness as the currency appreciates and talent flows to the resource sector (the single dominant channel displacing the others).
This sourceModels how a resource boom appreciates the currency and draws resources from the tradable sector ("Dutch disease"), the single-channel displacement mechanism.
Supported in partVerified against the work's full text
Models how a sectoral boom draws resources from other traded sectors and appreciates the real exchange rate, squeezing manufacturing; says nothing about accountability.
“The boom in the energy sector raises the marginal products of the mobile factors employed there and so draws resources out of other sectors”
- The atrophy follows — accountability decays because it is no longer needed to extract revenue; the non-resource economy loses competitiveness as the currency appreciates and talent flows to the resource sector (the single dominant channel displacing the others).
Mechanisms¶
- Revenue Diversification Roadmap
- The phenomenon it works against is Dutch disease
This sourceExplains Dutch disease as a sectoral boom that bids resources away from other traded activities and squeezes their profitability through higher domestic costs and real appreciation.
- The phenomenon it works against is Dutch disease
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