Online Content

1. Moxnes, Erling, "The Dutch Disease: Causes, Consequences and Cures"

Type:
Document
Date Created:
1983
Collection:
System Dynamic Society Records
Collecting Area:
University Archives
Collection ID:
ua435
Parent Record(s):
23d738ba88f8333bc39725f9cb5bd0b8, cf82ceba47eedd73f41b00918de16477, and b0aa2a699b54f0d19f6a9d93bdbcfa18
Thumbnail Path Ss:
/downloads/1r66jj56x?file=thumbnail
System Modified Dtsi:
2020-01-02T18:37:09Z
Description:
The Dutch Disease is the name of macroeconomic effects of natural gas income spending in the Netherlands in the 1970’s. Spending resulted in increases in the national wage level, problems for exporting industries and economic instability. A system dynamics model of the Norwegian economy replicates the Dutch Disease for the case of oil income spending in Norway. The underlying causes of the Dutch Disease are discussed, and policies to cure problems are investigated. Subsidies to exporting industries have little effect on the problems in this sector of the economy, and they exacerbate economic instability. A wage freeze has some positive effects on the Dutch Disease. However, this policy causes other problems. An attempt to increase labor mobility has some positive effects. The most effective policy has been found to be a smooth and slow increase in oil income spending, the original cause of the disease. All problems cannot be avoided, and inevitable problems must be balanced against the benefits of oil income spending.