61
Figure 1: Growth and natural resource dependence
-Republic „ ,
Rwanda
Tunisia
Canada
⅛m⅛Ue MoroccoMexi
Fuels, ores and metals exports in percent of merchandise exports 1970-2002
Source: World Development Indicators, World Bank
Figure 2: Natural resource dependence reduces competitiveness
Relative
price of
non-
traded
goods
Fraction of labour in non-traded sector
Key: A resource boom shifts A to A, so a shift from the traded to non-traded sector and
real appreciation. With time relative productivity of the traded declines if the
elasticity of substitution in demand goods is less than unity. This shifts the
equilibrium from A to A' and eventually to B. In the long run there is real
depreciation and the allocation of labour is returned to its original level.
More intriguing information
1. Inflation Targeting and Nonlinear Policy Rules: The Case of Asymmetric Preferences (new title: The Fed's monetary policy rule and U.S. inflation: The case of asymmetric preferences)2. THE ANDEAN PRICE BAND SYSTEM: EFFECTS ON PRICES, PROTECTION AND PRODUCER WELFARE
3. The Role of Trait Emotional Intelligence (El) in the Workplace.
4. The name is absent
5. Comparison of Optimal Control Solutions in a Labor Market Model
6. European Integration: Some stylised facts
7. The name is absent
8. Reputations, Market Structure, and the Choice of Quality Assurance Systems in the Food Industry
9. Achieving the MDGs – A Note
10. DIVERSITY OF RURAL PLACES - TEXAS