An oil boom is a period of large inflow of income as a result of high global oil prices or large oil production in an economy. Generally, this short period initially brings economic benefits, in terms of increased GDP growth, but might later lead to a resource curse.
History
Some important oil booms around the world include:
- Mexican oil boom (Mexico, 1977–1981)
- Pennsylvanian oil rush (United States, 1859)
- Texas oil boom (United States, early 1900s–1940s)
- Calgary oil boom (Canada, 1947)
- North Dakota oil boom (United States, 2008–2015)
Consequences
According to the Dutch disease theory, the sudden discovery of oil may cause a decline in the manufacturing sector. The consequences will vary from country to country, depending on the country's economic structure and stage of development. For example, after the oil boom in Gabon, the country showed symptoms of the Dutch disease, while oil-producing Equatorial Guinea did not.
See also
References
- ^ Toto Same, Achille (2008). Mineral-rich countries and Dutch disease: Understanding the macroeconomic implications of windfalls and the development prospects the case of Equatorial Guinea. World Bank Publications. p. 31.
- Zafar, Ali (2004). What happens when a country does not adjust to terms of trade shocks?: the case of oil-rich Gabon. World Bank Publications. p. 9. ISBN 978-1-00-716495-7.