Economic Growth, Structural Change and Natural Resource Booms: A Structuralist Perspective

In this paper we present a structuralist two-sector model on economic development, structural change and natural resource booms. We describe a multiple equilibria scenario, in which manufacturing development is the main source of economic progress. Natural resource booms, by modifying the productive structure of the economy, may set destabilizing forces. De-industrialization processes may take place, confining developing countries in poverty traps. Public intervention in the economic sphere, both through short-run macro policies and through long-run development strategies, may help to free the economy from poverty traps and to foster the development process.