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the minor parts in the export structure of Canada. It is just 3% out of total and it demonstrates us that the sector of natural resources does not influence the Canadian economy too much.
Finally, it is obvious that the Canadian economy is dependent on oil prices and the sector of natural resources (especially crude oil). However, such dependence is very slight and the mentioned sector is not the major one in Canada. According to these two conclusions, we can make a final one: there is no Dutch disease in Canada nowadays, but it can take place in this country if some special conditions appear.
References:
1. www.statcan.gc.ca
2. fred.stlouisfed.org
3. Corden, W.M. - "Boom Sector and Dutch Disease Economics: Survey and Consolidation." 1984.
4. The Toronto conference in January 2008 - "Implications for Canada of a High-valued Canadian Dollar. Has the Canadian Economy Caught Dutch Disease?"
5. Robert A. Amano, Simon van Norden - "Oil Prices and the Rise and Fall of the U.S. Real Exchange Rate" May 1996.
6. Трегуб И.В. Математические модели динамики экономических систем -монография, М.: 2009.
7. Suslov M., Tregub I. Modeling the currency exchange rate. Methods and principles // Economics. 2015. № 1. С. 67-70.
8. Suslov M.Yu.E., Tregub I.V. Ordinary least squares and currency exchange rate // International Scientific Review. 2015. № 2 (3). С. 33-36.
The influence of "Dutch Disease" on the Libya's economy. Prepared by: Anton Shumov
University: Finance University under the Government of the Russian Federation
Faculty: International Finance Faculty
Group: 1-2 master program
Academic adviser: Tregub Ilona Vladimirovna
Key words: GDP, General Government Revenue, Econometrics, Exports, "Dutch disease", Economics, Oil prices, Oil-producing country, Libya, Econometric model, use of Eviews, Study of real statistical data. Abstract
This work sheds light on the "Dutch disease" and its influence on the oil-producing economies through the analysis of correlation between gross domestic product of the chosen country and such key indicators as country's exchange rate, oil prices and government revenue. Model shows, how changes in general government revenue and oil market prices, depreciation or appreciation, as well as exports (taking into account, that oil-producing country is mainly oil-exporter), affects GDP. It supposed that county's exchange rate depends on the oil market
demand, or in case of this research on export volume for a given time series.
Summary
The research aims to analyze the presented econometric model in Libya. Libya is a country, strongly dependent on oil exports revenues. Research includes substantiated problem, main economic indicators of Libya for the period 19972015, oil prices for the same period of time and estimated model. Model has been estimated using 2SLS method, using EViews program. This work represents a practical example of econometric modeling using real data and based on real economic case. This model contains mathematical representation of the system according to the formulation of problem, methods of constructing the model, computer implementation process modeling and analysis of results. This research provides information about the interdependence of main economic indicators of Libya. In conditions of high oil price volatility, volatility of demand it is scientifically considerable to analyze economic indicators of oil-producing country and estimate possible or existing interdependence between them as well as real influence of chosen indicators on the economy and the influence of previous periods indicators on the forecast.
Introduction
The GDP per capital of Libya soared by 676% in the 1960s and a further 480% in the 1970s. However such fantastic growth rates proved unsustainable in the face of global oil recession and international sanctions. Consequently the GDP per capital shrank by 42% in the 1980s. Successful diversification and integration into the international community helped current GDP per capita to cut further deterioration to just 3.2% in the 1990s. Libya is an OPEC member and holds the largest proven oil reserves in Africa (followed by Nigeria and Algeria), 41.5 Gbbl (6.60x109 m3) as of January 2007, up from 39.1 Gbbl (6.22x109 m3) in 2006. About 80% of Libya's proven oil reserves are located in the Sirte Basin, which is responsible for 90% of the country's oil output. The state-owned National Oil Corporation (NOC) dominates Libya's oil industry, along with smaller subsidiaries, which combined account for around 50% of the country's oil output. Among NOC's subsidiaries, the largest oil producer is the Waha Oil Company (WOC), followed by the Agoco, Zueitina Oil Company (ZOC), and Sirte Oil Company (SOC). Oil resources, which account for approximately 95% of export earnings, 75% of government receipts, and over 50% of GDP. Oil revenues constitute the principal foreign exchange source.
At 2.6% per year on average, real GDP growth was modest and volatile during the 1990s. Libya's GDP grew in 2001 due to high oil prices, the end of a long cyclical drought, and increased foreign direct investment following the suspension of UN sanctions in 1999. Real GDP growth has been boosted by high oil revenues, reaching 4.6% in 2004 and 3.5% in 2005. Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange constrain growth.
The NOC hopes to raise oil production from 1.80 million bpd in 2006 to 2
million bpd by 2008. FDI into the oil sector is likely, which is attractive due to its low cost of oil recovery, high oil quality, and proximity to European markets. Most Libyan oil is sold on a term basis, including to the country's Oilinvest marketing network in Europe; to companies like Agip, OMV, Repsol YPF, Tupras, CEPSA, and Total; and small volumes to Asian and South African companies.27 Here come "Dutch disease" phenomena, explaining the relationship between resource production "boom" and significant decline in other spheres, especially in manufacturing.
Many scientists have analyzed the influence of oil prices fluctuations on Gross domestic product of Libya and Dutch disease phenomena. Journalist Benoit Fauconr in his article Libya Won't Freeze Oil Production, published in Wall Street journal in 2016 proved the fact that Libya was affected by Dutch disease through the oil price shock and its correlation with the exchange rate.28
In this scientific research we examined the economic model, which describes, how GDP is affected by General government revenue, exports (taking into account, that in Libya export mainly represented by Hydrocarbon sector i.e. oil, gas and refined products, and their relation with the exchange rate, in terms of Dutch disease.
In order to analyze model 4 exogenous (independent) variables were taken: real oil prices, relation of USD/LYD, total exports and total imports; and 2 endogenous (dependent) variables - GDP and General government revenue. Model has following specification:
(GDPt = C(i) + C(2) * GGRt + C(3) * ROPt + C(4) * OERt + £t { GGRt = C(5) + C(6) * GDPt + C(7) * Ext + C(8) * Imt + £t Where GDPt - Gross Domestic Product at market prices (current bln US$), GGRt -General government revenue bln US$, ROP2t- Real oil prices (USD per barrel), OER3t- Official exchange rate (LYD per US$, period average), Ext-Exports of goods and services (constant 2010 bln US$), Imt-Imports of goods and services (current 2010 bln US$). Data collected for the period from 1997 to 2015 from the open and reliable resources.
Estimation was made using Two-Stage Least Squares method and following results were obtained:
Estimation Method: Two-Stage Least Squares Sample: 1997 2015
Included observations: 19
Total system (balanced) observations 38
Coefficient Std. Error t-Statistic Prob.
C( 1) C(2) C(3) C(4)
21.85113 2.932730 7.450782 0.0000
1.105023 0.071884 15.37242 0.0000
0.078962 0.042527 1.856755 0.0732
-6.977139 3.273978 -2.131089 0.0414
27
27 Libya, the Political Economy of Oil Judith Gurney R. Jul 2011.
28 Benoit Fauconr article "Libya Won't Freeze Oil Production", Wall Street Journal, 2016
C(5) -6.503235 2.397482 -2.712527 0.0109
C(6) 0.457867 0.114617 3.994753 0.0004
C(7) 0.471340 0.117798 4.001254 0.0004
C(8) -0.116707 0.051061 -2.285625 0.0295
Determinant residual
covariance 22.12389
Equation: GDPt=C(1)+C(2) *GGRt+C(3) *ROPt+C(4)*OERt Instruments: ROPt OERt Ext Imt C Observations: 19 R-squared Adjusted R-squared
S.E. of regression Durbin-Watson stat 1.166175
Equation: GGRt=C(5)+C(6)*GDPt+C(7)*Ext+C(8)*Imt Instruments: ROPt OERt Ext Imt C
Observations: 19 R-squared Adjusted R-squared
S.E. of regression Durbin-Watson stat 1.940193
Value of the multiple coefficient of determination R2 =0,97 shows that 97 % of total deviation of GDP is explained by the variation of general government revenue, oil prices and in relation of USD/LYD. Such a high value of the R2 is quite good it is close to 1 (maximumR2 = 1). This means that selected factors influence the given model significantly.29 DW test was passed successfully and this means that no autocorrelation detected, F-test was passed as well.
Conclusion
Nowadays, research on the "Dutch disease" problem become especially relevant due to interesting economic trends arising on the world market. Libya as a huge oil-exporter needs a lot of attention in terms of high volatility. For oil-producing country it is a real struggle to face the "Dutch disease" phenomena in conditions of world economic crises. It was mentioned previously, that any market volatility could provoke economic misbalances.
After model' analysis, based on economic data for the period 1997 -2015, we are able to make following conclusions: model used, could possibly be used to estimate influence of used factors on gross domestic product, how changes are
29 I.V.Tregub. Mathematical models of economic systems dynamics: Monography. M.: Finance Academy, 2009. 120 p._
0.970287 Mean dependent var 47.01785
0.964344 S.D. dependent var 20.45989 3.863392 Sum squared resid 223.8869
0.987265 Mean dependent var 25.53691
0.984718 S.D. dependent var 17.56264 2.171123 Sum squared resid 70.70663
determined by general government revenue, oil prices and net exports as well as exchange rate, in terms of "Dutch disease". Libyan economy relies heavily on hydrocarbon sector and depends on exports volume. There are several common methods .
List of references:
1. Libya: Selected Issues. February 2005 IMF Country Report No. 05/52
2. Трегуб И.В. Математические модели динамики экономических систем -монография, М.: 200. 120 p.
3. Oil Price and Dutch Disease: The Case of Libya R. Jbir & S. Zouari-Ghorbel Unité de recherche MO.DEV.I 99/UR/0624, Département des Sciences Economiques, Faculté de Sciences Economiqueset de Gestion de Sfax, 06 Jul 2011
4. Suslov M.Yu.E., Tregub I.V. Ordinary least squares and currency exchange rate // International Scientific Review. 2015. № 2 (3). С. 33-36.
5. http://databank.worldbank.org/data/reports.aspx?source=2&country=LBY (Statistical data base)
УДК 330.43
Tereshina O. Yu. 1st year master student Financial University under the Government of the Russian Federation Russia, Moscow Терешина О.Ю. студент 1 курса магистратуры Финансовый университет при Правительстве Российской
Федерации Россия, г. Москва THE PHENOMENON OF DUTCH DISEASE AND THE IMPACT OF INVESTMENTS ON THE PORTUGUESE ECONOMY ФЕНОМЕН ГОЛЛАНДСКОЙ БОЛЕЗНИ И ВЛИЯНИЕ ИНВЕСТИЦИЙ НА ЭКОНОМИКУ ПОРТУГАЛИИ Аннотация: В статье рассматривается феномен голландской болезни и его влияние на современные экономические системы, в частности на экономику Португалии. Были предприняты попытки исследовать влияние прямых инвестиций и их вклад в развитие голландской болезни в экономике Португалии. Проведены исследования влияния инвестиций на ключевые экономические показатели - ВВП и экспорт. Статья содержит эконометрическую модель описывающую и объясняющую корреляцию между данными показателями в рамках рассматриваемого феномена.
Ключевые слова: голландская болезнь, прямые инвестиции, прямые иностранные инвестиции
