Tuesday, October 9, 2012

Dutch Disease in Russia

As an aside, I've been investigating some trends with regard to Russia's balance of payments, and noticed two startling strong correlations. Both the value of Russia's exports and its growth in real GDP seem to be determined by the price of crude oil, to an extent greater than I had expected. Enjoy. 

* Dutch Disease is a term originating in the 70s or 80s or something when the Netherlands starting exporting lots of natural gas. These exports drove up their real exchange rate, stunting exports of and investments in other manufacturing industries.

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