Dutch Disease Is a Term Applied to a Problem in the 1970

question 8

Essay

Dutch Disease is a term applied to a problem in the 1970 whereby the Netherlands were experiencing massive and sudden inflows of capital from abroad. What was the cause of this sudden influx of capital, and what types of potential problems did it have for the Dutch or could it have for any small single resource country?

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Definitions:

Stock Dividend

A dividend payment made to shareholders in additional shares rather than in cash, effectively redistributing a portion of the company's retained earnings as additional stocks.

Stock Split

A corporate action that increases the number of a company’s shares by dividing each share, which in turn reduces its price but does not affect the total market capitalization.

Shares Outstanding

Refers to the total number of shares of a company that are currently owned by investors, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.