The long run dynamic of the Dutch disease phenomenon: a SVAR approach. (6th September 2013)

• Record Type: Journal Article
• Authors: Issaoui, Fakhri; Boufateh, Talel; Montasser, Ghassen El
• Is Part Of: International journal of computational economics and econometrics. Volume 3:Number 1/2(2013)
• Page Start: 43
• Page End: 63
• Publication Date: 2013-09-06
• Subjects: Dutch disease -- oil rents -- industrial added value -- long run -- SVAR model -- structural vector autoregressive -- nominal shocks -- real shocks; Econometrics -- Periodicals; Economics -- Data processing -- Periodicals; 330.01519505
• Languages: English
• ISSNs: 1757-1170

Abstract

This paper studies the dynamic effect of oil rents on the industrial added value in a sample of countries with different development levels. Using a structural vector autoregressive (SVAR) model, we tested the effect of a real shock and a nominal shock on the variables of the model. The main obtained results are three. First, we confirmed that the Dutch disease (DD) problem is a short–term phenomenon that takes place each time when there is a shock on oil rents. Second, the ephemeral nature of the phenomenon confirms the neoclassical assumption stating that the effect of nominal shocks on real variables is only short term. Third, the effect of long–term real shock on oil rents is positive for all countries which score interdependence between industry on the one hand and oil rents on the other.