The Netherlands' Economy
The Original Dutch Disease
How the discovery of the Groningen gas field in 1959 led to a stronger currency and weaker manufacturing, giving economists the term Dutch disease.
The Netherlands gave its name to Dutch disease.
Groningen gas
In 1959, one of the world’s largest gas fields was found at Groningen.
What happened
- Gas exports brought in foreign currency.
- The guilder strengthened.
- Manufacturing exports became less competitive.
- Unemployment rose in the 1970s.
The term
The Economist coined “Dutch disease” in 1977.
Earthquakes
Gas extraction caused earthquakes in Groningen, damaging homes. Production was cut and the field was closed in 2024.
Lesson
Resource windfalls can hurt other sectors unless managed carefully.
The damaged house
A Groningen homeowner's walls crack after gas-induced tremors, leading to compensation claims.
Thinking resources are always good for an economy
They can hurt other exports.
Key takeaways
- Groningen gas was found in 1959.
- A stronger currency hurt manufacturing.
- The Economist coined Dutch disease in 1977.
- Earthquakes led to the field's closure.
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