Resource depletion and terms of trade collapse: "The zambian disease"

Desmond Norton

No 198802, Working Papers from School of Economics, University College Dublin

Abstract: This paper considers the response of a labour-abundant developing economy, initially heavily dependent on a single resource, to depletion of that resource or to permanent collapse in the terms of international trade agaist the resource sector. It is shown that agriculture will be the new long-run growth sector. But if the country borrows abroad in order to maintain living standards in the short-run and medium-run following the resource sector collapse, the economy might be forced to repudiate its international debts even if growth occurs in the longer-run.

Keywords: Economic development; Developing countries--Economic conditions; Natural resources (search for similar items in EconPapers)
Date: 1988-01
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:198802

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