18
Product Life Cycle
Sales and Profits ($)
Sales
Profits
Product Develop-
ment
Introductgn demand for the country’s exports is price inelastic.
The country is heavily engaged in international trade.
16
Immiserizing growth
Countries that export a diversified selection of export products do not seem to be at much risk of experiencing immiserizing growth. A developing country that relies on one or a few primary products (agricultural or mineral products) is more at risk.
5
Growth in only one factor
6
Growth in only one factor
The Rybczynski theorem suggests that development of a new natural resource, such as oil or gas, may retard development of other lines of production, such as manufactures (e.g. the Dutch Disease). Conversely, rapid accumulation of new capital and worker skills can cause a decline in domestic production of natural resource products and make the country more reliant on imported materials.