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Is Chad affected by Dutch or Nigerian disease?

By Sandrine Kablan and Josef Loening


We examine the effects of the ‘natural resource curse’ on Chad and find little evidence for Dutch disease. Structural vector auto-regression suggests that changes in domestic output and prices are overwhelmingly determined by aggregate demand and supply shocks, and while oil production and high international prices negatively affect agricultural output, the effects are small. Consistent with empirical evidence for neighbouring Cameroon, we observe minimal impact on Chad’s manufacturing sector. We associate our findings with structural underemployment and the inefficient use of existing production factors. In this context, increased public expenditures in tradable sectors present the opportunity to make oil revenues an engine of national development.

Topics: O11 - Macroeconomic Analyses of Economic Development, E32 - Business Fluctuations; Cycles, E30 - General, O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products, E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
Year: 2012
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