| Name: | Description: | Size: | Format: | |
|---|---|---|---|---|
| 1.3 MB | Adobe PDF |
Authors
Abstract(s)
The aim of this dissertation is to develop a model that would allow to analyze
under which conditions shocks to the economy can lead to reallocation of labor
between sectors and the so-called Dutch Disease, that in this paper is defined as the
reallocation of labor across sectors given changes to exogenous variables. It is proved
that there are changes in the exogenous variables that do not lead to labor
reallocation, and changes in variables such as total productivity factor of tradable
goods, relative prices of energy, and net foreign assets, lead to labor reallocation,
which under certain assumptions may harm growth. Furthermore, an analysis of
Angola’s economy over the last decade is carried out, in where there’s the conclusion
that the combined shock in the prices and production of oil have been followed by an
expansion of other sectors of production and not a decrease as expected. Therefore, it
is possible to show that the cause of the resource curse may not be the Dutch Disease.
The assumptions used in the model are presented in the following sections.