With the spectacular rise of the dollar, along with rising naturalresource prices. Evidence from canadian provinces this paper looks at whether immigration can mitigate the dutch disease effects associated. Terms of trade changes, the dutch disease, and canadian provincial disparity. The institute of intergovernmental relations welcomes working papers dealing with some aspect of intergovernmental relations, multilevel governance and fiscal federalism from scholars in political science, economics, history, law, geography and related fields.
This article evaluates whether immigration can mitigate the dutch disease. Vermeulen june, 2012 abstract this paper looks at whether immigration can mitigate the dutch disease e. To receive our monthly bulletin thinking ahead by email, please subscribe to the irpps edistribution. With this migration channel, dutch disease can be propagated to non. Wage bargaining, inequality, and the dutch disease. The dutch disease refers to the case where a resource boom in an economy leads to a real. Jun 17, 2014 the mitigation effect is due mostly to interprovincial migration and temporary foreign workers.
Dutch disease and the mitigation effect of migration faculty of. Bos vu university amsterdam, the netherlands and serge coulombe university of ottawa, canada april 2009 abstract we argue that the failure to disentangle the evolution of the canadian currency and. However, formatting rules can vary widely between applications and fields of interest or study. Issue 30 october 20 the canadian dollar and the dutch. Second, we estimate the separate impact of the two currency components on the shares of manufacturing employment in canada. Interprovincial migration also results in a spreading effect of dutch disease from booming to non.
Economic questions are at the heart of this report, whereas purely environmental ones are kept in the background. In the model, there is the nontraded good sector this includes services and two traded good sectors. Canadian policy prescriptions for dutch disease ebook, 20. Ottawa must play a stronger role to ensure that more. The pembina institute and equiterres booms, busts and bitumen taps into that vein. As recent canadian debates about resource development, dutch disease, and employment insurance demonstrate, regional tensions remain alive and well in the canadian federation. Does the canadian economy suffer from dutch disease. Issue 30 october 20 the canadian dollar and the dutch and. The canadian dollar and the dutch and the canadian diseases, the school of public policy research papers 6. We derive predicted changes in the size of the nontradable sector. Feb 02, 2009 second, we estimate the separate impact of the two currency components on the shares of manufacturing employment in canada. Evidence from canadian provinces michel beine, serge coulombe and wessel n. Evidence from canadian provinces, oxcarre working papers 151, oxford centre for the analysis of resource rich economies, university of oxford. The putative mechanism is that as revenues increase.
The core model the classic economic model describing dutch disease was developed by the economists w. Economic questions are at the heart of this report, whereas purely environmental ones are kept in. In the basic dutch disease model of corden and neary, the economy is divided into three sectors. This illustrates a negative sideeffect of the oilresource richness in alberta. The classic economic model describing dutch disease was developed by the economists w. Bos vu university amsterdam, the netherlands and serge coulombe university of ottawa, canada january 2009 abstract we argue that the failure to disentangle the evolution of the canadian currency and. The canadian dollar and the dutch and the canadian diseases, the school of public policy research papers 6 30, university of calgary, 20. Robin boadway, serge coulombe and jeanfrancois tremblay october 10. Canadian policy prescriptions for dutch disease, by robin boadway, serge coulombe and jeanfrancois tremblay, can be downloaded from the institutes web site. The mitigation effect is due mostly to interprovincial migration and temporary foreign workers. At the same time, some analysts have argued that quebecs economy might be suffering from a version of the socalled dutch disease beine et al, 2012, coulombe, 2014.
Dutch disease and the mitigation effect of migration. This paper looks at whether immigration can mitigate the dutch disease effects associated with booms in natural resource sectors. Working papers institute of intergovernmental relations. Furthermore, beine, coulombe, and vermeulen 2014 show that the inflows of tfws contrary to those of permanent migrants could alleviate the potential dutch disease at the regional level that is associated with the big resource boom between 2001 and 2008. Past regional disputes often centred on questions of federal government fairness to particular provinces, most. Request pdf dutch disease and the mitigation effect of migration. In the model, there is a nontradable sector which includes services and two tradable sectors. The cad component is driven by commodity prices, giving evidence for a dutch disease. Human capital quality and the immigrant wage gap, iza journal of migration 3. Highlights we measure the strength of the canadian dollar through currency components. We show that 63 percent of the manufacturing employment loss due to exchange rate development between 2002 and 2007 are related to a dutch disease phenomenon.
Volume 6issue 30october 20 the canadian dollar and the dutch and canadian diseases serge coulombe department of economics, university of ottawa summary with the spectacular rise of the dollar, along with rising naturalresource prices during the first decade of the 21st century, canadians heard a great deal about dutch disease. The dutch disease and the canadian economy economics. Examining the dutch disease in twospeed economies pdf. Pdf does the canadian economy suffer from dutch disease. Employment drops reacting to this component, in industries exposed to international trade. For more details or to schedule an interview, please contact the irpp. We show that 63 percent of the manufacturing employment loss due to exchange rate development between 2002 and 2007 are related to. This cited by count includes citations to the following articles in scholar. Dutch disease, one version of which is that a natural resource boom draws factors of production from. Vermeulen may 6, 2014 abstract this paper evaluates whether immigration can mitigate the dutch disease e. Oct 10, 20 canadian policy prescriptions for dutch disease, by robin boadway, serge coulombe and jeanfrancois tremblay, can be downloaded from the institutes web site. Provinces michel beine, serge coulombe, and wessel n. Evidence from canadian provinces this is a wileyblackwell publishing paper.
Vermeulen this article evaluates whether immigration can mitigate the dutch disease effects associated with booms in natural resource sectors. Dutch disease, natural resources, exchange rates, currency. Some even use terms like disease and curse to describe the negative consequences of resource booms. Termsoftrade changes, the dutch disease, and canadian provincial disparity serge coulombe department of economics university of ottawa in this paper, i first show that canadian provincial disparities in 2012 have been essentially shaped by the relative evolution of regional terms of trade during the resource boom of 2002 to 2008. We then estimate the separate impact of the two currency components on the shares of manufacturing employment in canada.
We show that 42 per cent of the manufacturing employment loss that was due to exchange rate developments between 2002 and 2007 is related to the dutch disease phenomenon. Canadian policy prescriptions for dutch disease, irpp insight, no. The terminology and the discourse to which it has given rise leave the impression that the gift of resource wealth to a nation can be disadvantageous, and under some conditions like the lack of institutions for good governance. The theory of the dutch disease predicts that income from oil and other natural resources produces negative economic consequences through two different mechan. In economics, the dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector for example natural resources and a decline in other sectors like the manufacturing sector or agriculture. Institute of intergovernmental relations, the primary purpose of this paper is to show that the favourable evolution of terms of trade during the resource boom of 2002 to 2008 has largely shaped canadian provincial disparity in 2012. The putative mechanism is that as revenues increase in the growing sector or inflows of foreign aid, the given nations currency becomes stronger. Resource and energy economics vol 34, issue 4, pages 4. An electronic version of the paper may be downloaded. Challenges for policymakers robin boadway, queens university serge coulombe, university of ottawa jeanfrancois tremblay, university of ottawa prepared for thinking outside the box, a conference in celebration of thomas j. This paper looks at whether immigration can mitigate the dutch disease effects associated. Crea university of luxembourg, ires, cream and ces. Terms of trade changes, the dutch disease, and canadian.