2Resources Boom and Macroeconomic Adjustment: A Survey1

2.1 Introduction

During the 1960s and 1970s, several industrial countries, as well as oil-exporting developing countries, experienced a slump in their traditional export and import competing sectors following resource booms. This phenomenon is known as the ‘Dutch disease’ and has been the subject of a great deal of discussion and policy debate. The term ‘Dutch disease’ was first used in the 26 November 1977 issue of The Economist to refer to the adverse effects on Dutch manufacturing of natural gas discoveries during the 1960s. While strong growth in the natural gas sector had led to a large surplus in the Netherlands’ balance of payments, with an appreciating guilder, the domestic manufacturing ...

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