The Age Of Turbulence

I have been reading The Age of Turbulence: Adventures in a New World a book by Alan Greenspan, the former Chairman of the Federal Reserve. One interesting part was the section on single resource rich countries and why they fail to thrive economically despite such great wealth. This is something that I have often wondered as well.

Greenspan cites the dreaded “Dutch disease” as one reason, which occurs when demand for a country’s main resource drives up the value of that nation’s currency, making its other exports less competitive. This dooms it to be even more dependent on the original export for economic sustenance. Other reasons he cited are the “crippling social effects” that impact resource rich countries, including when mundane tasks are outsourced to immigrants, and the wealth is used by elites to placate the native population, thus sapping its productivity.

Here’s a more scholarly study on the subject.

(Disclosure – the text link at the top of the page contains an affiliate link so if you buy the book I will be paid a measly sum, which I will probably never receive because I won’t reach the minimum payout)

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