Dec 17, 2013

What is the Alberta Effect?

. . . [W]here resource abundant regions exploit the fiscal advantage, provided by the resource rents, to compete more aggressively in the inter-regional competition over capital, and as a result attract vast amounts of capital– which in turn mitigates and even reverses Dutch Disease symptoms (and, following Wahba's (1998) model, transmits them to factor exporting regions) so that eventually Resource Blessing effects are observed within federations. 
That is from this paper by Ohad Raveh, and the title is "Dutch Disease, Factor Mobility, and the Alberta Effect: The case of federations." 

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