The Gregory Thesis Visits the Tropics

18 Pages Posted: 25 May 2006

See all articles by Peter G. Warr

Peter G. Warr

Australian National University (ANU) - Crawford School of Public Policy


A concern about large, export-orientated projects relates to the flows of foreign exchange into the domestic economy that they produce. These flows occur both during the investment phase of the project and subsequently during its operational phase, through export earnings. Foreign exchange inflows produce direct benefits for some groups, but may also indirectly harm others, through an appreciation of the real exchange rate. These indirect outcomes, known as the 'Gregory effect' in Australia and as the 'Dutch disease' or booming sector effect elsewhere, are studied in this paper in the context of a large infrastructure project in Laos.

Suggested Citation

Warr, Peter G., The Gregory Thesis Visits the Tropics. Economic Record, Vol. 82, No. 257, pp. 177-194, June 2006, Available at SSRN: or

Peter G. Warr (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200

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