ECIN Replication Package for "Dutch Disease, Unemployment and Structural Change"

We find that Dutch Disease effects on unemployment are small even in a commodity-rich economy like Australia. Using an estimated open-economy model with frictional unemployment, we quantify how business-cycle shocks and structural changes shape aggregate unemployment. A permanent rise in commodity prices in the 2000s appreciated the real exchange rate and temporarily increased unemployment, but its effect was offset by a gradual, secular decline in the disutility of work in the non-tradable sector, a key driver of long-run structural change. Shifting preferences toward non-tradables, together with non-commodity shocks, account for most of the observed unemployment dynamics.