Based on the provided reference, the question "What is Norwegian Dutch disease?" is somewhat misleading. The term is typically just "Dutch disease," not "Norwegian Dutch disease." Therefore, I will address what "Dutch disease" is.
Dutch disease describes a specific economic phenomenon.
- The term "Dutch disease" (DD) was coined in 1977 by The Economist. It was used to describe the decline of the manufacturing sector in the Netherlands. This decline was linked to the discovery of a large natural gas field in Groningen in 1959. The term also encompassed the economic problems faced after the natural gas field's depletion.
In simpler terms, Dutch disease happens when a country discovers a valuable natural resource (like natural gas or oil). This discovery leads to a surge in exports of that resource. The increase in exports causes the country's currency to become stronger. A stronger currency makes the country's other exports (like manufactured goods or agricultural products) more expensive for foreign buyers. This can harm these other industries, leading to their decline.
Essentially, the booming resource sector can inadvertently damage other sectors of the economy, creating an unbalanced economy reliant on a single commodity.
