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

    Access Status
    Fulltext not available
    Authors
    Raveh, Ohad
    Date
    2013
    Type
    Journal Article
    
    Metadata
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    Citation
    Raveh, O. 2013. Dutch Disease, factor mobility, and the Alberta Effect: The case of federations. Canadian Journal of Economics. 46 (4): pp. 1317-1350.
    Source Title
    Canadian Journal of Economics
    DOI
    10.1111/caje.12050
    Additional URLs
    http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1540-5982
    ISSN
    0008-4085
    URI
    http://hdl.handle.net/20.500.11937/61803
    Collection
    • Curtin Research Publications
    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. © Canadian Economics Association.

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