In economics, the Dutch disease is a concept that explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector. The mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation's other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment".
The term was coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of a large natural gas field in 1959.
Read more about Dutch Disease: The "Core Model", Effects, Minimization, Diagnosis
Famous quotes containing the words dutch and/or disease:
“The French courage proceeds from vanity—the German from phlegm—the Turkish from fanaticism & opium—the Spanish from pride—the English from coolness—the Dutch from obstinacy—the Russian from insensibility—but the Italian from anger.”
—George Gordon Noel Byron (1788–1824)
“And this disease that was Swann’s love had so multiplied, it was so intimately tied to all of Swann’s habits, to all his acts, to his thoughts, to his health, to his sleep, to his life, even to what he desired for his afterlife, his love was so much a part of him that it could not be extracted from him without destroying him entirely: as is said in surgery, his love was inoperable.”
—Marcel Proust (1871–1922)