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Dutch Disease Investigated: Empirical Evidence from Selected South-East Asian Economies

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  • Shahid Hussain Javaid

    (State Bank of Pakistan)

Abstract

The objective of this paper is to investigate Dutch Disease hypothesis by analyzing foreign inflows power to appreciate real exchange rate as well as calculate the degree of contraction in the tradable sector among selected South East Asian countries over 1981-2007. Using static and dynamic panel data techniques, the study first estimates real exchange rate appreciation due to surge in foreign inflows and then estimates contraction in the tradable and expansion in the non-tradable sector. On the basis of empirical estimation the study confirms the Dutch Disease hypothesis in the countries of analysis.

Suggested Citation

  • Shahid Hussain Javaid, 2009. "Dutch Disease Investigated: Empirical Evidence from Selected South-East Asian Economies," SBP Working Paper Series 31, State Bank of Pakistan, Research Department.
    • Handle: RePEc:sbp:wpaper:31
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    References listed on IDEAS

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    Cited by:

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    2. Arsham Reisinezhad, 2020. "The Dutch Disease Revisited: Theory and Evidence," Working Papers halshs-03012647, HAL.
    3. Isabel Ruiz & Carlos Vargas-Silva, 2012. "Exploring the causes of the slowdown in remittances to Mexico," Empirical Economics, Springer, vol. 42(3), pages 745-766, June.
    4. Inayat U. Mangla & Jamshed Y. Uppal, 2014. "Macro-economic Policies and Energy Security—Implications for a Chronic Energy Deficit Country," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(3), pages 255-273.
    5. Liang, Yunbao & Zhou, Hongxia & Zeng, Jun & Wang, Chuanbin, 2024. "Do natural resources rent increase green finance in developing countries? The role of education," Resources Policy, Elsevier, vol. 91(C).
    6. Binetti, Marco Nicola, 2023. "Rebuilding energy infrastructures and the manufacturing sector in post-conflict countries," Energy Policy, Elsevier, vol. 172(C).
    7. Gu, Xiao & Alamri, Ahmad Mohammed & Ahmad, Maaz & Alsagr, Naif & Zhong, Xiangming & Wu, Tong, 2023. "Natural resources extraction and green finance: Dutch disease and COP27 targets for OECD countries," Resources Policy, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Foreign inflows; real exchange rate; dynamic panel data; dutch disease;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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