Chapter 17: Primary Exports
Chapter Learning Objectives
After reading the chapter, you ought to understand and be able to explain:
- The fundamental concept of comparative advantage as the basis for gains from trade, as well as its major implications.
- The main export characteristics of developing countries, including the
extent to which many of these countries depend on primary exports. - How primary exports can serve as an engine of growth by improving resource utilization, expanding factor endowments, and generating various linkage effects.
- The concepts and facts behind the ongoing debate about barriers to primary-export-led growth due to sluggish demand growth, declining terms of trade, earnings instability, and weak linkage effects.
- The causes and cures of Dutch disease, which has turned many a commodity boom into a development disaster.
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