Dutch disease via remittances and natural resources: A perspective of global economy

Abstract

In the last few decades, the literature substantially explored the connection of natural resources, remmittanes, and sustainability for different countries. Concerning, the existing contradictory findings motivated the present study to investigated the global economy. This study tends to analyze whether natural resources and remittances contribute to sustainable development or causing Dutch in the global economy. Also, this study aims to explore the role of renewable energy consumption and trade openness in global sustainable development during the period 1990–2020. Using both the parametric methods such as canonical, dynamic and fully modified ordinary least square, and non-parametric approach method of moment quantile regression, the long-run results are obtained. The empirical results reveal that natural resources are adversely affecting the sustainable development which validates the Dutch disease in global economy. In contrast, remittances, renewable energy use, and trade openness are significant factors of long-run sustainable development. These results are robust and consistent to the prevailing literature. Based on the empirical results, this study suggests lowering natural resources exploitation or efficient use of such resources, adequate utilization of remittances in developmental projects, promoting investment in renewable energy sector, and encourage trade between economies. Such implications will improves will lead to the attainment of global sustainable development.