immiserizing growth


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immiserizing growth

a situation in which a DEVELOPING COUNTRY's attempt to increase its growth potential through EXPORTS actually results in a retardation of that potential. This is very much an exceptional situation confined only in theory to a country whose export speciality (some mineral or agricultural crop) accounts for a preponderant share of world trade in the product. The country needs to export more to earn the foreign exchange to finance the capital imports that it requires to underpin domestic growth. If all its export effort is concentrated on its speciality, this could lead to an ‘oversupply’ of the product, resulting in a deterioration of the country's TERMS OF TRADE. As a result, the country's foreign exchange earnings will now buy fewer imports, and domestic growth potential will be impaired. See ECONOMIC DEVELOPMENT.
References in periodicals archive ?
1) The concern about immiserizing growth on the continent has motivated a recent stream of studies on 'paradigm shifts'.
Tariffs, Foreign Capital and Immiserizing Growth, Journal of, International Economics, 7: 317-322.
We will explain the effects of the Dutch Disease that plagued Ireland in correspondence with the Immiserizing Growth Theory and additional macroeconomic applications; such as sterilized foreign exchange intervention, modest capital controls and fiscal tightening.
2) Finally, a classic result that does not depend on asymmetries in taste patterns, but rather upon the degree of elasticity in demand and the nature of growth is the question of whether a country that unequivocally grows (transformation schedule shifts out) can be made worse off as a consequence of growth (the so-called immiserizing growth paradox).
Immiserizing growth occurs when the TOT worsens so much as a consequence of export-biased growth that the country is made worse off than before.
It will be shown that a country may or may not experience immiserizing growth in the presence of a trade restriction.
Moreover, the paradoxes of immiserizing growth disappear.
The vocabulary of this literature has already been extensively used in this conference as in labour-intensive, comparative advantage, immiserizing growth, and so on, and as such, I simply continue the conversation.
In contrast, the immiserizing growth model presented by Bhagwati indicates that as export increases, the domestic economic well-fare reduces.
Tariffs, Foreign Capital and Immiserizing Growth," Journal of International Economics, 7(4):317-322.
We then extend our basic framework to allow for economic growth, induced by technical progress, to explore the possibility of immiserizing growth in the presence of import quotas.
If the country is able to influence world prices, it is conceivable that p may fall sufficiently to cause real value added per worker in the growing industry to decline--just like immiserizing growth.