NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Adjustment and Structural Change under Supply Shocks

Michael Bruno

NBER Working Paper No. 814
Issued in December 1981
NBER Program(s):International Trade and Investment, International Finance and Macroeconomics

The resource boom effect and the input price effect of raw material price changes are analyzed within a two-period, two-sector (plus resource industry), open economy framework. Diagrammatic exposition is used to study the 'Dutch disease', and in particular the distinction between the short term wealth effects (causing a real appreciation and a movement of variable factors from tradable to non-tradable industries) and between the long-run effects on total investment, its sectoral allocation and its finance by foreign borrowing. The framework further enables analysis of the different allocational effects of temporary versus permanent raw material price increases, when the two sectors differ in material use. Also discussed are the effects of changes in the world interest rate on factor allocation and foreign borrowing as well as the allocational effects of government intervention in the case of temporary real wage rigidity.

download in pdf format
   (308 K)

download in djvu format
   (243 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0814

Published: Bruno, Michael. "Adjustment and Structural Change under Supply Shocks." Scandinavian Journal of Economics, Vol. 84, No. 2, (1982), pp. 199-221.

Users who downloaded this paper also downloaded* these:
Ben-David and Papell w6096 International Trade and Structural Change
Bruno and Sachs w0852 Energy and Resource Allocation: A Dynamic Model of the "Dutch Disease"
Baldwin w2058 Structural Change and Patterns of International Trade
Baily, Bartlesman, and Haltiwanger w5503 Labor Productivity: Structural Change and Cyclical Dynamics
Buiter and Purvis w0592 Oil, Disinflation, and Export Competitiveness: A Model of the "Dutch Disease"
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us