Changing Export Income and the Developing Countries’ Economy: A Diagrammatic Representation

We have now distinguished three main types of developing countries that crucially depend for their current production and growth on their export earnings, and for whom changes in commodity prices affect the whole fabric of their economies. (1) those having their traditional production restricted by the availability of labour force; (2) those whose traditional production is restricted because of the availability of suitable land; and (3) those whose production requires some imported inputs directly or indirectly, and thus have the extent of their output restricted by the availability of foreign exchange.