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  • Answer Upon - Dutch Disease: How One Industry Causes National Economic Downturn

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    currency rises, manufacturing sector no longer remains competitive, leading to a slump in the manufacturing sector. This resul
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    Dutch Disease gets its name from an economic phenomenon seen in Holland. The discovery of natural gas reserves in Holland in the 1960s led to a slump in other sectors like manufacturing. Dutch Disease is the recession that hits other sectors when one industry dominates, or increases its exports.

    Causes of Dutch Disease: The major cause of the Dutch Disease was the discovery of natural gas in Holland. Dutch Disease normally leads to a country’s currency appreciating in value. Since the value of the currency rises, manufacturing sector no longer remains competitive, leading to a slump in the manufacturing sector. This result

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    e 1960s led to a slump in other sectors like manufacturing. Dutch Disease is the recession that hits other sectors when one industry dominates, or increases its exports.

    Causes of Dutch Disease: The major cause of the Dutch Disease was the discovery of natural gas in Holland. Dutch Disease normally leads to a country’s currency appreciating in value. Since the value of the currency rises, manufacturing sector no longer remains competitive, leading to a slump in the manufacturing sector. This resul

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    ustry dominates, or increases its exports.

    Causes of Dutch Disease: The major cause of the Dutch Disease was the discovery of natural gas in Holland. Dutch Disease normally leads to a country’s currency appreciating in value. Since the value of the currency rises, manufacturing sector no longer remains competitive, leading to a slump in the manufacturing sector. This resul

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    y of natural gas in Holland. Dutch Disease normally leads to a country’s currency appreciating in value. Since the value of the currency rises, manufacturing sector no longer remains competitive, leading to a slump in the manufacturing sector. This resul
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    currency rises, manufacturing sector no longer remains competitive, leading to a slump in the manufacturing sector. This results in manufacturing jobs moving to other countries.

    Results of Dutch Disease: The Dutch Disease causes a rise in imports and decrease in exports, since the high value of currency makes manufacturing and other sectors non-viable. The high cost of production makes the goods less competitive from the good manufactured by other countries.

    Dutch Disease: Economic Model The economic model to explain Dutch Disease was developed by W Max Corden and Peter Neary in the 1980s. According to them, the pa

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