Dutch disease causes an appreciation of the national currency value
Economic literature and empirical studies consistently show that the Dutch disease phenomenon—driven by resource windfalls or foreign exchange inflows—leads to an appreciation of the real exchange rate.
The retrieved papers universally support the core economic theory that Dutch disease mechanisms (such as resource booms and foreign exchange inflows) lead to real exchange rate appreciation. Multiple empirical studies, reviews, and cross-country analyses substantiate this link without any papers refuting the relationship.
Nicolás E. Magud, S. Sosa. When and Why Worry About Real Exchange Rate Appreciation? The Missing Link Between Dutch Disease and Growth. 2013. https://doi.org/10.1142/S1793993313500099
Documents that resource booms and foreign exchange inflows trigger real exchange rate appreciation.
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Torfinn Harding, R. Stefanski, G. Toews. Boom Goes the Price: Giant Resource Discoveries and Real Exchange Rate Appreciation. 2020. https://doi.org/10.1093/EJ/UEAA016
Estimates that giant oil and gas discoveries appreciate bilateral real exchange rates significantly.
Marwan Alssadek, J. Benhin. Oil boom, exchange rate and sectoral output: An empirical analysis of Dutch disease in oil-rich countries. 2021. https://doi.org/10.1016/j.resourpol.2021.102362
Shows empirical evidence across multiple oil-rich countries that oil booms cause real exchange rate appreciation.
When and Why Worry About Real Exchange Rate Appreciation? The Missing Link Between Dutch Disease and Growth. 2010. https://doi.org/10.5089/9781455210787.001
Confirms that resource booms and foreign exchange inflows lead to real exchange rate appreciation.
Arsham Reisinezhad. The Dutch disease revisited: consistency of theory and evidence. 2023. https://doi.org/10.1007/s10640-023-00827-w
Finds that resource booms result in real exchange rate appreciation via the spending channel.
Juan Trevino. Oil-Price Boom and Real Exchange Rate Appreciation. 2011. https://doi.org/10.5089/9781463924676.001
Notes that oil-rich countries experiencing booms also face relatively large real exchange rate appreciations.
Yanbai Li, Brahim Bergougui, S.Y.E.D.M.A.N.S.O.O.B. Murshed. China trade shock: Is there a reversal of Dutch disease for exporters of primary commodities?. 2025. https://doi.org/10.1080/09638199.2025.2553905
Observes that commodity booms can cause exchange rate appreciation affecting specific industries.
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