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The problem is that extractive industries drive Dutch Disease. A Sovereign Wealth Fund can fight it, but Dutch Disease will have an effect. (The other thing tha
by mandevil 9y ago
The problem is that extractive industries drive Dutch Disease. A Sovereign Wealth Fund can fight it, but Dutch Disease will have an effect. (The other thing that can be done is to have the entire country save more, by running a budget surplus and encouraging individuals to save more as well. This is... somewhat hard to do, in practice, without incredibly strong social cohesion.)
- vkou 9y agoIt's a lot easier to do when important sectors of your economy aren't addicted to consumer credit. People don't buy tankers full of oil on credit cards, but they do buy Fords.
- ThrustVectoring 9y agoBlaming debtors for indebtedness is like blaming heroin addicts for drug-running. It's a two-sided market, and savings gluts can and will drive down the price of credit until the market clears.