Dutch Disease, factor mobility, and the Alberta Effect: The case of federations

Ohad Raveh*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

25 Scopus citations

Abstract

Do reduced costs of factor mobility mitigate Dutch Disease effects to the extent that they are reversed? The case of federations provides an indication they do. We observe resource blessing (curse) effects at the provincial (federal) level, and argue the difference in outcomes stems from the difference in factor mobility costs. We construct a simple tax competition model which shows that if factor mobility costs are sufficiently low, a resource-boom triggers an Alberta Effect that mitigates, and possibly reverses, Dutch Disease symptoms. The paper concludes with empirical evidence for the main implications of the model.

Original languageAmerican English
Pages (from-to)1317-1350
Number of pages34
JournalCanadian Journal of Economics
Volume46
Issue number4
DOIs
StatePublished - Nov 2013

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