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Submitted by Carlos Hurtado on
Your note is stimulating and many things come to mind. One of them: the dutch disease phenomenon, at least as I understand it, is a quite mechanical process through which there is RER appreciation, but it by itself is not the cause for "...The country may then end up worse off in the long run if economic sectors with higher capacity of supporting growth and social inclusion are negatively affected". I think that the fact that the RER appreciation generates a "tradeables squeeze", does not necessarily imply a loss of welfare. In my view, that risk -ending up "worse"-, is effectively there, but it is related from the rent seeking behaviour mentioned in your conclusion 3: rent seeking, but in a broad way: private people seeking rents, and States -governments and legislatures- becoming complaisent about fiscal dependency on rents from commodities exports. Otaviano knows, but from my comment it is not difficult to guess my nationality...