This paper investigates the impact of long-run terms-of-trade shocks. Analytically, we show that, if capital goods are largely importable or the labor supply is sufficiently elastic, then natural-resource booms increase aggregate investment and worsen the current account, but Dutch ‘Disease’...

In this paper, the World Bank and the International Monetary Fund have drawn together available research findings on the benefits of trade liberalization as well as on the obstacles to trade-oriented development