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Dutch Disease in Greenland: A comparative analysis of Dutch Disease symptoms in Greenland, the Faroe Islands and Denmark from 2009-2023

Ekelund, Axel LU and Berg, Daniel Teodor LU (2026) EOSK12 20261
Department of Economic History
Abstract
This paper examines whether Greenland’s annual block grant from Denmark has
generated Dutch Disease effects. The foundational framework of Corden & Neary
(1982) is applied to the context of aid-induces and public-sector driven transfer
dependency. Using a comparative most-similar-systems design, including Greenland,
the Faroe Islands and Denmark, the analysis combines a descriptive diagnostic
approach with panel regression analysis. The descriptive analysis finds that
Greenland exhibits characteristics consistent with Dutch Disease through a dominant
public sector absorbing over 40% of employment, a public sector wage premium the
private sector cannot match and an export sector almost entirely reliant on fishing.
The regression... (More)
This paper examines whether Greenland’s annual block grant from Denmark has
generated Dutch Disease effects. The foundational framework of Corden & Neary
(1982) is applied to the context of aid-induces and public-sector driven transfer
dependency. Using a comparative most-similar-systems design, including Greenland,
the Faroe Islands and Denmark, the analysis combines a descriptive diagnostic
approach with panel regression analysis. The descriptive analysis finds that
Greenland exhibits characteristics consistent with Dutch Disease through a dominant
public sector absorbing over 40% of employment, a public sector wage premium the
private sector cannot match and an export sector almost entirely reliant on fishing.
The regression analysis finds no statistically significant relationship between real
wages and real exchange rate appreciation in Greenland, while positive relationships
are identified for the Faroe Islands and Denmark. Taken together, the findings are
broadly consistent with the presence of Dutch Disease in Greenland, though causal
claims cannot be established within the scope of this thesis. (Less)
Please use this url to cite or link to this publication:
author
Ekelund, Axel LU and Berg, Daniel Teodor LU
supervisor
organization
course
EOSK12 20261
year
type
M2 - Bachelor Degree
subject
keywords
Dutch Disease, Greenland, tradeable sector, non-tradeable sector, Public sector
language
English
id
9243734
date added to LUP
2026-09-07 13:55:52
date last changed
2026-09-07 13:55:52
@misc{9243734,
  abstract     = {{This paper examines whether Greenland’s annual block grant from Denmark has
generated Dutch Disease effects. The foundational framework of Corden & Neary
(1982) is applied to the context of aid-induces and public-sector driven transfer
dependency. Using a comparative most-similar-systems design, including Greenland,
the Faroe Islands and Denmark, the analysis combines a descriptive diagnostic
approach with panel regression analysis. The descriptive analysis finds that
Greenland exhibits characteristics consistent with Dutch Disease through a dominant
public sector absorbing over 40% of employment, a public sector wage premium the
private sector cannot match and an export sector almost entirely reliant on fishing.
The regression analysis finds no statistically significant relationship between real
wages and real exchange rate appreciation in Greenland, while positive relationships
are identified for the Faroe Islands and Denmark. Taken together, the findings are
broadly consistent with the presence of Dutch Disease in Greenland, though causal
claims cannot be established within the scope of this thesis.}},
  author       = {{Ekelund, Axel and Berg, Daniel Teodor}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Dutch Disease in Greenland: A comparative analysis of Dutch Disease symptoms in Greenland, the Faroe Islands and Denmark from 2009-2023}},
  year         = {{2026}},
}