Working Paper

Can Oil-led Growth and Structural Change Go Hand in Hand in Ghana? A Multi-sector Intertemporal General Equilibrium Assessment

Authors

  • Clemens Breisinger
  • Xinshen Diao
  • Manfred Wiebelt
Publication Date

Unlike in Asia, the manufacturing sector has not (yet) become a driver of structural change in Africa. One common explanation is that the natural resource-focus of many African economies leads to Dutch disease effects. To test this argument for the case of newly found oil in Ghana we develop a multi-sector intertemporal general equilibrium model with endogenous savings and investment behavior. Results show that in addition to the well-known short-term Dutch disease effects, long-term structural effects can indeed impede Asian-style economic transformation in Ghana (and other resource rich countries). We also demonstrate how oil wealth may go hand in hand with structural change in the future.

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Info

JEL Classification
C68, D58, D90, F43, O11, O41, O55

Key Words

  • Dutch Disease
  • Ghana
  • Growth
  • intertemporal general equilibrium
  • oil revenue
  • structural change
  • Strukturwandel
  • transformation
  • Wachstum