This paper explores the economic effects of extractivism in Chile, Colombia, Mexico
and Peru, applying the Dutch Disease model. A Johansen cointegration test finds a strong
negative relationship between the appreciation of the real exchange rate due to increased
government spending, and a decreasing participation of manufactures both at the national
level and in exports. Other weaker, yet still significant, economic effects are also suggested.
As the model of growth based on natural resources continues in Latin America, its
economic effects must be discerned in order to to guarantee a more fair inclusion in global
trade and stronger national economic growth.