The Dutch Disease or Problems of a Sectoral Boom

Enders, Klaus Article The Dutch Disease or Problems of a Sectoral Boom Zeitschrift für Wirtschaftsund Sozialwissenschaften (ZWS) - Vierteljahresschrift der Gesellschaft für Wirtschaftsund Sozialwissenschaften, Verein für Socialpolitik Provided in Cooperation with: Duncker & Humblot, Berlin Suggested Citation: Enders, Klaus (1984) : The Dutch Disease or Problems of a Sectoral Boom, Zeitschrift für Wirtschaftsund Sozialwissenschaften (ZWS) - Vierteljahresschrift der Gesellschaft für Wirtschaftsund Sozialwissenschaften, Verein für Socialpolitik, ISSN 0342-1783, Duncker & Humblot, Berlin, Vol. 104, Iss. 1, pp. 1-20, https://doi.org/10.3790/schm.104.1.1 This Version is available at: https://hdl.handle.net/10419/291568 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ The Dutch Disease or Problems of a Sectoral Boom* By Klaus Enders A resource boom in an industrialized country (such as Norwegian oil finds in the North Sea) is often blamed to cause de-industrialization or unempolyment (the so-called Dutch Disease). This paper explores the issue in a simple Keynesian framework on the basis of Salter's traded/non-traded goods model. It allows for domestic use of the resource as intermediate input in production. The distinction between a production boom (discovery of new deposits) and a price boom (rising world market prices) is therefore important. Some policies measures that are often advocated are studied. I. Introduction: The "Dutch disease", or Help we have oil1 The term "Dutch disease" was coined in the beginning of the 70's when British economists discussed the best use of North-Sea oil, referring to the Netherlands having faced similar problems in the 60's when production of North-Sea gas had started. This resource boom was thought to have caused "... stagnation of industry, mass unemployment and what is now called 'de-industrialization'."2 The mechanism that is expected to produce these results is roughly as follows. Increased oil revenues improve the current account and domestic income by the same amount. As long as the marginal propensity to import is less than one, imports rise but the current account remains in surplus. Furthermore, part of the additional income is spent on non-tradeables. Both effects will lead to real appreciation of the home currency (through nominal appreciation or domestic inflation, particularly in the sheltered sector, or both), reducing the international competitiveness of the traditional export and import-competing industries. * An earlier version of this paper was presented at a seminar of a research group studying "Inflation and Imployment in Open Economies", Ermatingen/ Switzerland, June 1982. I am grateful to the participants of this seminar and to K. Baumgarten, W. Busch, F. Gehrels and especially H. Herberg for helpful comments. I also thank the Deutsche Forschungsgemeinschaft for financial support for working on the present project. As usual I accept sole responsibility for any remaining deficiency or error. 1 Title of a German TV feature about Norway, ARD, August 23, 1982 („Hilfe wir haben Ol"). 2 Kaldor (1981), 5. 1 Zeitschrift fur Wirtschaftsund Sozialwissenschaften 1904/1 OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 2 Klaus Enders Thus the sheltered sector (typically services, construction etc.) is likely to expand while the exposed sector (including typically manufacturing) can be expected to decline. Hence the result will be some "de-industrialization". It is as yet not clear why this should be a disease. On the contrary, since oil revenues often contain a large element of economic rent, less labour is needed to maintain any level of income. And the new structural pattern (more theatres and hospital services, less machine building) seems rather attractive. However, three major objections have been raised. The first, and most obvious, is that the cost of adjusting to the new pattern of production might be high and unevenly spread. In particular all kinds of rigidities (labour immobility, excessive wage demands spreading from the booming sector, etc.) could hamper smooth adjustment and may split the domestic community into "losers" and "winners". Consequences of policies that the "losers" will advocate have been discussed in, e.g., Corden (1982), Bjerkholt/Lorentsen/Strom (1981), Enders/Herberg (1982), Herb erg/Enders (1983), and are one of the main topics of the present paper as well. A second concern is about the desirability even of a successful adjustment. Here a strong manufacturing sector is seen as essential for a modern viable society, because, for example, it is exposed industries that are a main inlet for technological innovation, for learning from abroad and thus for overall economic development. This point has been made emphatically with respect to developing countries such as Mexico, facing the choice to industrialize or become an oil-rentier: "... by specializing in what the Law of Comparative Costs ordained her to do, namely as being a great Primary Product Exporter — a role for which she is destined by God und by Nature, as well as by the Americans ... [the country, K. E.] misses out on all exciting things in life. It misses out on social dynamism. It misses out on the cultural, technical and intellectual development which only a strong healthy manufacturing industry ... can provide."3 A third concern is that the pleasures of rentier-life may not last forever, and that allowing de-industrialization "... may also condemn that country to the typical fate of the ex-rentier — inability to earn his/her own living when the source of the unearned income ceases".4 To deal with the last two concerns is outside the scope of this paper since they require a long-run perspective. (A first attempt to formalize s Kaldor (1981), 7-8. 4 Ellmann (1981), 165. OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 The Dutch Disease or Problems of a Sectoral Boom 3 them is Wijnbergen (1982 a/b).) However, the same policies sometimes advocated to prevent de-industrialization on these grounds will tend to be favoured by interest groups worrying about their own short-run problems. Thus our discussion of the appropriateness of these policies should throw some light on the other two issues as well. The present analysis differs from models along neo-classical lines (e.g. Long (1982), Corden/Neary (1982), Bruno/Sachs (1982 a/b)) in e.g., that "Keynesian" unemployment prevails (households are rationed in the labour-market, firms are rationed in the goods markets). It differs from other "Keynesian" approaches (e.g. Butter/Purvis (1983)) in that the role of the resource as an input for production of final goods is stressed. Thus it becomes important to distinguish between a resource output boom due to a rise in resource production and a resource price boom due to an increase in the resource price. An output boom represents just an income transfer to the domestic country. It affects the domestic economy primarily from the demand side (at least under fixed exchange rates). A price boom includes a transfer component if the country is a net exporter of the resource. In addition, however, it changes the price of an input and thus affects the supply side and may alter relative prices. This will induce substitution between inputs in production as well as substitution between final goods in demand. Most papers on resource booms and the Dutch disease disregarded domestic input use of the resource. Bruno/Sachs {1982 a/b) and Herberg/Enders (1983) took a different approach but stressed the effects of input substitution in case of a price boom. Here we concentrate our attention on demand-substitution effects assuming a "Ricardian" production technology and unemployment of labour. The paper is organized as follows. In part II we present a simple "Keynesian" model of a small open economy producing oil and manufactures (both tradeable) as well as non-tradeable services. In parts III and IV we discuss the impact of an oil output boom and an oil price boom, respectively. In part V we look into the consequences of several policies (devaluation, export subsidy). Some concluding remarks are made in part VI. II. The model The home country produces three commodities, manufactures, oil and services. The output levels are QM, QR and Qs respectively. The first two commodities are internationally tr-adeable, the third is a purely national good. Domestic manufactures are an imperfect substitute of I* OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 4 Klaus Enders foreign manufactures while domestic and foreign oil are homogenous products.5 We assume that the foreign currency prices P*F and P*R of foreign manufactures and oil are determined on the world market and exogenously given to the home country. Assuming the absence of any trade impediments implies (1) PF = eP*F , PR = ePjfc where PF, PR, e are the corresponding domestic currency prices resp. the exchange rate. The exchange rate, i.e. the home currency price of a foreign currency unit, is taken to be fixed. Oil extraction does not require any variable factor input, and its output level QR is controlled by the domestic government. Manufactures and services are produced with labour and oil. The respective inputoutput coefficients an are non-negative and constant (i.e. the production technology is linear limitational). We assume average cost pricing (2) Pi = aiLW + aiRPR , i = M,S PM, PS are the home currency prices of domestic manufactures and services and W is the (fixed) nominal wage rate. The supply of labour and goods is infinitely elastic at current prices. Output and employment are thus demand determined. Nominal income (value added) equals (3) Y = PM QM + PSQS + PRR = W ("ML QM + *SL QS) + PR QR where (4) R = QraMR Qm - aSR Qs are net oil exports. Nominal domestic absorption A is a function of nominal income and nominal financial wealth V (5) A = Y + <x (V - kY) , <x > 0, k > 0, 1 - * fc > 0 . As familiar from Dornbusch/Mussa (1975), domestic hoarding Y — A serves to close the gap between desired wealth kY and actual wealth V. Here domestic financial wealth may be regarded as the stock of domess The commodity labels are not to be taken too literally. They are just shorthands for (and less abstract than) tradeables, non-tradeables and a tradeable intermediate good. OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 The Dutch Disease or Problems of a Sectoral Boom 5 tic money. If bonds exist, assume that the domestic central bank keeps the domestic interest rate fixed through appropriate open market intervention. The domestic government budget is always balanced and therefore domestic financial wealth only changes through hoarding (6) V : = dV/dt = Y - A Domestic (quantitative) demand Dj for the j-th final good (; = M, F, S) is homogeneous of degree zero in all final goads prices and nominal absorption: (7) Dm = Dm (P¿J, PF, PSf A) ; Ds = Ds (PM, PF, Ps, A) DF = Dp {PM, PF, Ps> A) + - + + In (7) we assume all final goods to be gross substitutes. The possibility of complementarity between services and manufactures (where foreign and domestic manufactures remain substitutes) will be considered later. Foreign demand D*M for domestic manufactures depends only upon PM/PF since we take foreign income etc. as given: (8) DJ, = D*m (PMIPF) A short-run equilibrium is characterized by a joint equilibrium in the markets for services and domestic manufactures: (9a) QS = DS (9b) QM = DM + D*M A long-run equilibrium requires, in addition, that trade is balanced and thus hoarding equals zero: (9c) Y - A = 0 For our comparative-static analysis we need only compare long-run equilibria: If income and therefore wealth have risen in the long-run, the short-run equilibrium must have been associated with a (smaller) increase in income and a positive trade balance, and vice versa. Let us first derive some partial derivatives. If x = dx/x .denotes the relative change of x, we get from eqs. (1) and (2) (10) PI = SiR PR = OlR (e + P*R) , i = M,S where Gm = PR alR/Pi is the unit-cost share of oil in the i-th sector. OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 6 Klaus Enders &n — (1 — 6m) is the corresponding share of labour. Eq. (10) shows that a change in domestic output prices is determined by changes in the exchange rate and the world oil price PR. In particular, the horizontal supply curves for either domestic output shift upwards when the domestic oil price rises. This cost-push effect clearly is the stronger, the larger the unit-cost share 6m in the respective sector. We introduce a consumer price index P with logarithmic weights that equal initial consumption shares: (11) log P = dM log PM + dF log PF + ds log Ps where (12) di = Pi DJY From (10) and (11) (13) P = (dM eMR + ds eSR) P*R + (dM &MR + ds &SR + dF) e III. Resource Output Boom The effect of an increase in the rate of resource extraction (QR > 0) can be analysed with the help of Fig. 1. The output boom primarily raises domestic income through higher oil revenues, and this transfer effect is the only primary effect. This raises domestic demand for either final good. Prices are not affected and subsequently both outputs rise. Due to the familiar multiplier process the final income increase exceeds the initial transfer. Actual wealth V now falls short of long-run desired wealth kY. The gap is closed over time by a transitory trade balance surplus. It is transitory because with rising actual wealth imports of foreign manufactures increase while oil exports decrease as more oil is used for domestic production and, moreover, exports of manufactures stagnate. In the new long-run equilibrium output and employment have risen, and so have real and nominal income and wealth. Clearly, these expansionary effects are stronger in the long-run than in the short-run due to additional wealth effects. The adjustment to the new long-run equilibrium is brought about by wealth accumulation only without any change in relative prices. This adjustment path differs from those given in most other models of the Dutch disease where a real revaluation is required to restore equilibrium. In fact, the present case does not show any symptoms of a disease. OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 The Dutch Disease or Problems of a Sectoral Boom 7 Fig. 1: Resource-Output Boom Note, however, that our conclusion depends on the assumption that there is enough labour with the required skills so that both sectors can expand according to the increase in demand for their product. This is crucial since it allows the multiplier effect to raise income over and above the initial transfer, and, even with a propensity to import less than one, a balanced trade account can be achieved without any contraction in traditional exports. Other crucial assumptions are — that the supply curve is horizontal rather than upward sloping, — that the wage level is exogeneously given, — that the home country's manufacturing sector faces less-than-perfectly-elastic world demand. All four assumptions are relaxed in Enders/Herberg (1982), and the results of an output boom are then rather less favourable. With positively sloped supply curves of both final good sectors and infinitely elastic world demand for domestic manufactures (which are perfect substitutes to foreign manufactures) additional spending goes entirely on services and foreign manufactures. Thus services prices rise, and if this carries the wage upwards, competitiveness of domestic manufactures declines and the features of de-industrialization and temporary OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 8 Klaus Enders unemployment emerge. Different results are also obtained if the resource competes for domestic factors6, or if some factor is internationally mobile7. IV. Resource Price Boom The situation is far more complex if the boom is caused by rising oil (P*R > 0). Fig. 2 indicates the complications. Clearly, conflicting forces are at work rendering the reaction of output and employment generally indeterminate. There is a primary transfer effect as before: higher oil revenues and thus, ceteris paribus, higher nominal income shift the demand curves to the right. Moreover, there are primary cost-push effects which shift the supply curves upwards and, due to substitution effects and purely inflationary income effects, lead to further re-location of the demand curves. The only clear-cut results that emerge immediately are (i) domestic price increases and (ii), due to the rise in Pm/Pf8, a decline in the volume of • See, for example, Corden/Neary (1982). 7 Cf. Bruno/Sachs (1982 a). 8 We assumed FJ* to remain fixed. This is unrealistic since the foreign manufacturing sector should also face rising oil prices. Our results hold, however, as long as domestic manufacturing is more raw material intensive than foreign manufacturing. This seems to be the case if the oil abundance has led the home economy to specialize towards oil-intensive products. OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 The Dutch Disease or Problems of a Sectoral Boom 15 Table 2 Range of \rj*\ Result of export subsidy o<\r\< cM cM<\r\<cL cL<|^|<i/eML veuL<\v*\ Production in both domestic final goods sectors, total employment and real and nominal income decline. Manufacturing expands, but total employment, production of services and nominal and real income decline. Manufacturing and total employment rise. Nominal (and real) income as well as production of services decline. Both domestic final goods sectors expand, total employment and real and nominal income rise. Let us briefly comment on this table. First, note that | rj* | may be small initially but grow over time (akin to the ;-curve). In the first row, export demand is too inelastic and all sectors contract. Here not only the negative income transfer effect dominates but it even reduces domestic demand for domestic manufactures by more then it stimulates exports. If \rj*\ is somewhat larger (second row), the rise in export demand dominates the outcome in the domestic manufacturing sector. However, this reversal of deindustrialization is at the expense of the domestic service industries which contract because of a still negative income effect. If | rj* | is even larger (third row) this trade-off becomes more tempting: the expansion of manufacturing is strong enough to raise total employment. However, due to the oil rent foregone income declines, i. e., the oil rentier gives away part of his rent, instead works more and sees his income on balance decline. Only if | ?/* | > 1 /0ML does the export subsdiy boost production and employment in all sectors, and raises nominal and real income. Let us summarize: As long as foreign export demand is not completely inelastic, the export subsidy stimulates traditional manufacturing exports. This involves necessarily a transfer of oil-rent to foreigners since the oil content of these exports is effectively sold below the world oil price. If the additional exports require enough labour input total employment, income, and production in both the manufacturing and the services sector rise. Otherwise, however, policy makers have to face the choice of improving the situation of the manufacturing sector at the expense of the services sector, thereby lowering income and possibly even total employment. OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 16 Klaus Enders VII. Flexible Exchange Rates To deal properly with the consequences of a resource output boom and a resource price boom under flexible exchange rates would require a more detailed specification of asset markets and the formation of (exchange rate) expectations. We refrain from doing so and limit ourselves to a few remarks. Suppose we interpret our model in the sense of the "monetary approach", i. e. domestic money is the only financial asset held at home. Under flexible exchange rates the stock of domestic money is exogeneously fixed -and trade is always balanced, i. e. eq. (6) has to be replaced by Y = A. Thus nominal financial wealth V and therefore nominal income Y never change. Whenever, under fixed exchange rates, a disturbance would lead, in the short run, to a rise in nominal income and thus a trade surplus, now a revaluation of the home currency occurs. This clearly happens in the case of a resource output boom. Real income increases and in this sense the economic situation unambiguously improves. The revaluation will, however, have various price effects since it reduces the home currency prices PR and PF of oil and foreign manufactures. The fall in PF induces substitution away from domestic products (we assumed all final goods to be gross substitutes). And the fall in PR adversely affects the relatively labour intensive sector which benefits least from the reduction in unit cost but suffers most from substitution between domestic goods. In any case, the volume of manufacturing exports declines. In our "normal case" (services labour intensive), therefore, both domestic final goods sectors are subject to contractionary influences: services from losing out. against manufactures in general, domestic manufactures from the decline in export business (which may or may not be offset by some expansion of domestic demand). In the case of a resource price boom the same arguments apply if the transfer effect dominates the price effects, i. e., initially the country is a large net exporter of oil. Otherwise clear-cut results are difficult to obtain. A revaluation is the more likely outcome, and this will reduce, but not fully offset, the initial oil price increase. Domestic production of services and manufactures is still subject of negative cost-push effects while the price of their foreign substitute falls. At least in the "normal" case the major burden of adjustment will have to be borne by the manufacturing sector. Finally, let us turn to an export subsidy. From table 2 we know that a revaluation and, equivalently, an increase in real income occurs if OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 The Dutch Disease or Problems of a Sectoral Boom 17 and only if | IF | > 1/OML. Otherwise a devaluation lowers real income and will tend to stimulate manufacturing production at the expense of the service industries (as discussed before). If we allow for interest bearing assets, we no longer can build upon the simple model of part II. An easy extension would be to assume (i) domestic and foreign bonds to be perfect substitutes and (ii) price and exchange rate expectations to be static. This means (23) i = i* where i resp. i* are the domestic (foreign) nominal rates of interest. With the stock of domestic money M exogeneously fixed, and a liquidity preference demand function L (Y, i), money market equilibrium requires (24) M = L (Y, i) and thus nominal income is completely determined as a function of the foreign interest rate and the stock of domestic money. Whatever would have raised nominal income under flexible exchange rates (creating a balance of trade surplus) will now lead to a revaluation, and all the arguments above apply again. For a more sophisticated treatment of asset markets in otherwise simpler models we refer the reader to Buiter/Purvis (1983) and Eastwood/Venables (1982). They replace, along the lines of Dornbusch (1976), the interest parity eq. (23) by i = i* + e where, assuming perfect foresight, the expected and actual rate of depreciation are equal (to c). Further, domestic prices change slowly (which we could not model in our present model). Temporary overshooting then becomes possible if the money market clears instantaneously. In particular, under an overshooting revaluation transitory output losses become possible and would, in our model, most likely hurt the domestic manufacturing sector. VIII. Concluding Remarks The preceding analysis has shown that a "booming" resource sector may be a mixed blessing and may, in particular, destroy jobs in other sectors without itself creating new jobs. Our simple model was designed to describe one chain of interactions that may produce these results, namely cost push effects that appear if the booming sector produces input for other domestic sectors. An important distinction then has to be drawn between possible sources of the boom. An increase in production tends to be outright beneficial (certainly under fixed exchange 2 Zeitschrift fttr Wirtschaftsund Sozialwissenschaften 1984/1 OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 18 Klaus Enders rates). An increase in the world market price might have adverse side effects in other sectors by raising input costs. Apart from the diagnosis the model explained why some of the policies that might help the sector that is hit worst amount to "wasting" part of the new riches, lower real income or even fail to achieve their purpose. As explained, some of the simplifying assumptions (fixed money wage, fixed foreign manufacture price when oil prices rise) are not really restrictive. In addition, trade in bonds could easily be accommodated in the case of fixed exchange rates. More serious shortcomings are the neglect of (i) the role of the oil in the ground as part of wealth {Buiter/Purvis (1980) have built a model using permanent oil income, but have only one final good sector — which neglects an important part of the "Dutch disease" story), (ii) the impact upon investment flows that an oil boom might have (see Corden (1981)) and (iii) the fact that government spending is unlikely to replicate private spending patterns (for this point, see the apparently first paper on the "Dutch disease", Eide <1973)). Appendix Total differentiation of the system (9) and the definitional eq. (4) at an initial long-run equilibrium yields: 0 -1 (Al) \ -qM 0 - QM ®ML - Qs ®SL -E(Ds,e) -E(Ds,Pjf) = ( (- dM E (Djtf, e) + d*M eML r) (- dM E (PM, P*R) - d*M6MR r) QR QR 0 0 where income shares qu di and cost shares Gij as well as partial demand elasticities RJIJ have been defined in the main text. Further, E [DIT X) is the gross elasticity of demand D,- with respect to x, for given nominal income. Thus (A2) E (Ds, P%) = 6MR Vsm + ®SR VSS , E (DSf e) = E (Ds, P J,) + rjSF (A3) E (DM, py = EMR rjmt + GSR VMS , E (DM, e) = E (DM, P*R ) + VMF OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 The Dutch Disease or Problems of a Sectoral Boom Id The system's determinant is (A4) A = - qM (1 - qs 0SL tjsa - dM 6ML rjMA) Differentiation of the budget identity A = PMDM + PSDS + PF DF with respect to A yields (A5) 1 = dM rjMA + qs rjSA + dF r)FA in an initial long-run equilibrium (qs = ds, A = Y). Thus A < 0. Under the adjustment mechanism we implicitly assumed throughout (production Q% increases if there is excess demand in the i-th market), A < 0 is necessary to assure local stability. This can be seen by drawing the loci of Qs = Ds and of QM = DM + D*M in (QM9 QS)-space. Stability requires the former line to be steeper than the latter which is precisely what A < 0 ensures. Summary A resource boom in a small open industrialized country is analyzed in a simple Keynesian framework, allowing for domestic use of the resource as intermediate input. It is shown that an output boom (increased resource production) is outright beneficial: demand expands through the familiar multiplier process, stimulating production and employment in all sectors. A price boom, however, has negative cost-push effects affecting relative prices. The outcome depends crucially upon sectoral resource intensities and the size of initial resource exports. Conditions are analyzed, under which exchange rate policy or subsidies to traditional exports could improve the outcome. Zusammenfassung Die Arbeit analysiert einen Rohstoffboom in einer kleinen offenen Volkswirtschaft mit einem Sektor handelbarer und einem Sektor nicht-handelbarer Endprodukte, welche beide den Rohstoff als Zwischenprodukt einsetzen. Außerdem besteht Keynesianische Arbeitslosigkeit. Ein Outputproblem (höhere Rohstofförderung) wirkt dann über den bekannten Multiplikatorprozeß expansiv in allen Sektoren. Ein Rohstoffpreisanstieg dagegen bringt zusätzlich kontraktive Kostendruckeffekte mit sich. Das Ergebnis hängt entscheidend von sektoralen Rohstoffintensitäten und dem Umfang der anfänglichen Rohstoffexporte ab. Anders als in den meisten Arbeiten zum Problem ist De-Industrialisierung keine notwendige Folge eines Booms. Schließlich werden Kriterien angegeben, unter denen Abwertungspolitik bzw. Exportsubventionen sinnvolle wirtschaftspolitische Maßnahmen wären. References Bjerkholt, O., L. Lorentsen and S. Strom (1981), Using the Oil and Gas Revenues: The Norwegian Case, in: T. Barker and V. Brailovsky (eds.): Oil or Industry. London. 171 - 184. 2* OPEN ACCESS | Licensed under CC BY 4.0 | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.104.1.1 | Generated on 2023-04-04 12:05:31 20 Klaus Enders Bruno, M. 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