Oil boom, exchange rate and sectoral output: An empirical analysis of Dutch disease in oil-rich countries

This paper examines the Dutch disease in a global sample of 36 oil-rich developed and developing countries for period 1970 to 2016. It also theory comprehensively by considering two intermediate effects: spending resource movement. Using panel data fixed effect with Driscoll-Kraay standard errors estimation approach, our results show that an oil boom causes appreciation real exchange rate fall sectoral output, which is consistent theory. However, there significant difference effects on output among sub-regional groupings, possibly because differences extent institutional quality economic policy. The implications these are policy makers affected should improve quality, minimise promote domestic investment manufacturing agriculture sectors. These necessarily conditions escape problem, hinders growth development.