Dutch disease: An application on developing countries

Abstract

Workers' remittances are one of the important financial sources for developing countries. They attract attention by many scholars due to their expansive volumes. They are getting more important since it is especially accepted that these inflows cause Dutch disease in the literature. This study aims to examine whether workers' remittances bring about Dutch Disease problem, or not. In the applied part, fixed effects and instrumental variable estimation methods from panel data models are used. The results confirm the existence of Dutch disease for this country sample.