Dutch Disease.

Cue

The Fund, the boom pricing the factories out and one actor moving to save it instead of spending it. The means to bank the windfall offshore and hold the currency down at hand.

Action

Banking: The Steward, holding the steward's seat, would save the windfall abroad and spend only its return, against The Mover, holding the mover's seat, whose pull is to spend the new money now.

Stage

The Steward, having tabled Bank It Abroad, banks the resource revenue offshore and sterilises the boom, keeping the currency from rising so the traded sector is spared. The Mover, still on Follow the Boom, and the ballot behind it, feels every reason to spend the fortune now, on the schools and roads and wages going wanting.

Tension

The one move that keeps the base is the one a flush country is least willing to make. There is no easy remedy: saving the windfall offshore plainly spares the factories, yet it means locking a fortune away untouched while present needs press, against the boom and the ballot, and holding that discipline for the life of the resource. So the play closes where it must, the windfall saved and the base spared ... or the money is spent, the currency rises, and the hollowing runs on.

Cue

The Works, manufacturing selling at the world's price and paying the country's risen costs. Order books thinning, workers leaving for the fields, the margin gone.

Action

Hollowing: The Factory, holding the factory's seat, is crushed from both sides, while The Mover, holding the mover's seat, draws off its workers and its buyers turn to cheaper foreign rivals.

Stage

The Factory, still on Meet the World Price, cannot lift the price it sells at abroad nor escape the wages it pays at home, and its margin fails. The Mover, still on Follow the Boom, has taken its workers to the fields and its custom to imports the strong currency makes cheap, so the works run slower and shut.

Tension

A competitive sector is dismantled having done nothing wrong. There is no villain still: the world sets the price, the boom sets the wage, and the factory is simply caught between them. But it cannot pass the appreciation on, so the plot closes with the traded base hollowed out, its learning and export capacity gone where the resource cannot rebuild them, the future traded for a finite windfall.

Cue

The Exchange, everyone doing the sensible thing with a windfall. Factors moving to the best-paid work and the new income being spent through the economy.

Action

Booming: The Mover, holding the mover's seat, sends its labour and capital to the fields and spends the windfall, while The Boom, holding the boom's seat, draws them in with the highest returns.

Stage

The Mover, on Follow the Boom, moves its factors to the booming fields and spends the new wealth on homes and meals and services, as a richer country would. The Boom, still on Pay the Most, keeps offering the best wage, pulling workers and capital off every other sector.

Tension

Every move is right, and the moves together bend the whole economy toward the boom. There is nothing to fault: factors go where the return is and a richer people spends more, each choice sound. But the factors flow to the fields and the windfall is spent on what cannot be imported, so the plot closes with the boom drawing the economy in and the new money coursing through it, the pressure on prices and the currency, unseen, beginning to build.

Cue

The Field, a country striking a resource or its price soaring. The money pouring in, foreign exchange earned, the boom the best-paying thing in the land.

Action

Booming: The Boom, holding the boom's seat, earns the foreign exchange and pays the highest wages, while The Mover, holding the mover's seat, feels the new wealth arrive.

Stage

The Boom, on Pay the Most, pours money into the country and offers the best returns in it, the windfall real and welcome. The Mover, the country's factors and households, sees its income rise and the fields paying more than anywhere, and begins to turn toward them.

Tension

The good fortune is real, and it is the whole of the trouble. There is nothing to fault: a struck resource is wealth, not fault, and the highest wage is worth chasing. But the boom pays the most and floods the country with money, so the plot closes with the windfall flowing and incomes rising, the pull toward the fields and the flood of new money to spend, unseen, already set to raise the currency and hollow the base.

Cue

The Exchange, the spending falling on what cannot be imported. Homes and meals and services bid up, domestic costs and wages climbing, the currency strengthening in real terms.

Action

Appreciating: The Mover, holding the mover's seat, bids up the price of the non-traded, while The Factory, holding the factory's seat, watches its cost base climb against a fixed world price.

Stage

The Mover, still on Follow the Boom, spends the windfall on goods that cannot be imported, so their prices and the wages behind them rise. The Factory, on Meet the World Price, sees the real exchange rate strengthen against it, its costs rising while the price it sells at abroad holds flat.

Tension

The country enjoying its wealth is the country pricing its own factories out. There is nothing to fault: a richer people rightly buys more, and much of what it buys cannot be imported, so its prices rise. But rising domestic costs are a real appreciation, so the plot closes with the currency strong and the country's costs above the world's, the squeeze on the traded sector, unseen, now set.

Tenor

Fortunate, flush, spending. The plain good luck of a windfall struck, incomes up and the currency strong, a country richer overnight and buying what a richer country buys. Nothing wrong in it: only good fortune enjoyed, the money going where the pay is best and the new wealth spent.

Undertow

Under the fortune, the strong currency pricing the country's factories out of the world. Because the windfall is spent on what cannot be imported, domestic prices and wages rise, the currency strengthens in real terms, and the manufacturing that must sell at the world's price and pay the country's risen costs is undercut abroad and outbid at home, and it shuts. What enriches the country in the moment dismantles the traded base that would have carried it after the boom.

Nerve

The feeling of good fortune well spent, the windfall enjoyed as any windfall should be, sure the boom has made the country richer, because in the moment it has, while the strong currency quietly guts the factories, and the resource that funds it all is finite and will one day run dry.

Echo

After the run: an economy hollowed by its own bonanza, the factories gone and the boom fading, poorer than before it struck it rich, no one corrupt and no one wasteful, only factors chasing the best wage and citizens spending a windfall and an exchange rate reflecting the prices, and a sovereign fund that would have saved the boom and spared the base, refused as long as the money was flush, because saving a fortune felt absurd while the schools and roads went wanting now.

Projection

Lucky. Generous. The best-paying thing in the land. Is the struck resource and its soaring price, the gas under the sea or the mineral the world wants, pouring money into the country. No scheme in it: only good fortune arrived, offering the highest returns to whoever will work it.

Action

Earns foreign exchange and pays the most, drawing labour and capital to the fields. Lifts the nation's income and floods it with new money to spend. Does what a windfall does: makes the country richer and offers the best wage in it.

Shadow

Not a curse, a gift, and that is the whole of the trouble: the harm rides on real fortune, not on any fault. Because it pays the most, it pulls factors from the factories, and because it floods the country with money to spend, it drives up the prices that strengthen the currency, so the very generosity of the boom is what undercuts the traded sector and hollows it. It is genuine wealth, and being spent as genuine wealth is, it dismantles the base the country will need when the resource, which is finite, runs dry.

Tell

Says "we have struck it rich, the money is pouring in." Pours it, and the pouring is what prices the country's factories out of the world.

Projection

Diligent. Competitive. Suddenly undercut. Is the country's manufacturing, the sector that earned its way selling abroad at the world's price, now watching its costs climb and its buyers slip away. No failing in it: only a good exporter caught in a squeeze it did not make and cannot answer.

Action

Sells at the world's price, which it cannot lift, and pays the country's risen wages and rents, which it cannot escape. Loses its workers to the better-paying fields and its buyers to cheaper foreign rivals. Does everything right and still cannot compete, its margin crushed from both sides at once.

Shadow

Not uncompetitive, undercut: it was competitive until the boom, and it is priced out not by any fault of its own but by the strong currency the windfall raised. Because it must meet the world's price while paying the country's risen costs, it cannot pass the boom's inflation on, so it shrinks, and shrinking it takes with it the learning and the productivity growth and the export capacity that the resource in the ground never built, the very things the country will need when the boom fades. It is the sector that would have carried the future, dismantled by a present fortune it had no part in.

Tell

Says "our costs have risen and the world's price has not, so we cannot sell." Shuts, and the country loses the base that would have outlasted the boom.

Projection

Responsive. Sensible. Following the money. Is the nation's labour and capital and its households, going where the pay is highest and spending the new income the boom brings. No greed in it: only the ordinary response of factors to returns and of a richer people to their wealth.

Action

Sends its labour and capital to the booming fields and spends the windfall through the economy. Bids up the price of homes and meals and services, the things a richer country buys and cannot import. Does what any economy does with a windfall: moves to the best return and spends the gain.

Shadow

Not profligate, rational: factors go where the return is and a richer people spends more, each choice sound for the one who makes it. Because its extra spending falls on what cannot be imported, it drives up domestic prices and wages, which is a real appreciation of the currency, and because it drew off to the fields, the factories lose their workers too, so the sensible pursuit of returns and the reasonable enjoyment of wealth are together what strengthen the currency and gut the traded sector. It does right by every wage and every purchase, and in the sum prices its own country's factories out of the world.

Tell

Says "the pay is better in the fields, and we can afford the nicer things now." Moves and spends, and the moving and spending are what lift the rate that shuts the works.

Projection

Prudent. Far-sighted. Asking a hard restraint of a flush country. Sees the boom pricing the factories out and moves to save the windfall rather than spend it, holding a fortune offshore. No miserliness in it: only someone who knows the resource is finite and the base is not, and would keep both.

Action

Banks the resource revenue abroad, in a fund held offshore, and spends only its steady return. Sterilises the boom, keeping the new money out of the domestic economy so the currency does not rise and the traded sector is spared. Does the one thing that keeps the base: refuses to let the windfall be enjoyed at home.

Shadow

Not a saviour: the discipline it asks is brutal and must hold for the life of the boom, and every pressure runs against it. Because it means locking a fortune away untouched while schools and roads and wages go wanting now, against the boom's flood of money and the ballot's demand to spend it, the Steward cannot spare the factories without denying the country the windfall exactly when the windfall is most abundant and most wanted, and one lapse in the discipline lets the currency rise again. It can keep the traded base, only by receiving a fortune and deliberately not enjoying it, for decades, against everyone who would rather spend.

Tell

Says "save it offshore and live on the interest, or the boom will hollow us out." Is right, and being right means telling a country flush with new money to lock it away and go without.

Shown

The market where the windfall meets the country's goods, the price of homes and meals and services climbing as the new money chases them. The currency strengthening in real terms as domestic costs rise, and the world's price for traded goods sitting flat and foreign, unmoved by any of it.

Holds

The appreciating, and the squeeze it sets. Here the spending of the boom meets the goods that cannot be imported, so the Exchange holds the point where enjoyed wealth becomes a strong currency: the extra demand lifts non-traded prices and wages, which is a real appreciation, so it is where the windfall's spending turns into the cost base that will price the factories out.

Offers

The full worth of the windfall, in what it can buy at home. Because the Exchange is where the new money bids for non-traded goods, it offers the country the enjoyment of its fortune, the richer life the boom pays for, so it hands out the windfall's domestic value, and hands it out as the very rise in prices that strengthens the currency against the traded sector.

Withheld

A world price that rises with the country's costs. The Exchange cannot lift the foreign price the factories must take, so it withholds any relief from the squeeze, letting domestic costs climb while the world's price holds, and, converting spending into appreciation, it withholds from the traded sector the one thing that would save it, a currency that did not rise.

Shown

The rigs and shafts of the struck resource, the sector the world pays a premium for, humming with the money pouring in. Workers arriving from everywhere for the best wages in the land, and capital following them, the field the one place in the country that only grows.

Holds

The booming, and the pull it exerts. Here the windfall is earned and the highest wage is paid, so the Field holds the point where fortune becomes a magnet: it draws labour and capital off every other sector and earns the foreign exchange the spending will convert, so it is where a genuine gain begins to bend the whole economy toward itself.

Offers

The best return in the country. Because the Field is where the resource pays a premium the world sustains, it offers factors the highest wage and the country its new foreign exchange, so it hands out the fortune everyone rightly chases, and hands it out in a way that pulls the works empty and floods the land with money to spend.

Withheld

The learning that outlasts the boom. The Field cannot build the productivity growth and export skill that manufacturing compounds, so it withholds the dynamic base the country will need, offering a rent that flows while the resource lasts and no capacity that survives it, and, being finite, it withholds any promise that the premium will hold when the well runs low.

Shown

An account held abroad, the resource revenue paid into it and invested overseas, only its steady return drawn home. The steward guarding it, and the pressure against it: a country flush with money it is told not to spend, and every present need pressing to break the discipline.

Holds

The banking, and the restraint that resists it. Here the windfall is kept out of the domestic economy, so the Fund holds the point where the remedy meets its price: saving the revenue offshore keeps the currency from rising and the factories open, and it means locking a fortune away untouched, so it is where the base is spared against the temptation of the boom.

Offers

A future for the base, and a boom that outlives the resource. Because the Fund is where the windfall is saved rather than spent, it offers the traded sector its survival and the country a return that flows long after the well runs dry, so it hands out the one defence against the disease, and hands it out at the cost of the fortune enjoyed now.

Withheld

The windfall's enjoyment in the present. The Fund cannot both hold the money offshore and let the country spend it, so it withholds the schools and roads and wages the boom could pay for today, and, a discipline that must hold for decades and breaks at a single lapse, it withholds any ease, since the moment the money is spent the currency rises and the disease returns.

Shown

The factories that earned their way selling abroad, their order books thinning as foreign rivals undercut them and their workers leaving for the fields. The line running slower, the margin gone, the sector that competed on the world's terms now unable to meet its own country's costs.

Holds

The hollowing, and the base it takes. Here the world's price meets the boom's risen costs, so the Works hold the point where a competitive sector becomes a closing one: the factory must sell at the price it cannot lift and pay the wages it cannot escape, so it is where the appreciation lands as ruin and the traded base is dismantled.

Offers

The learning and export capacity a resource cannot build. Because the Works are where productivity grows and skill compounds and the country earns its way on merit, they offer the dynamic base that would outlast the boom, so they hand out the future the resource does not, and hand it out precisely as the boom prices it out of existence.

Withheld

A price it can set and a cost it can escape. The Works cannot lift the world's price or shed the country's risen wages, so they withhold any margin to survive on, letting the sector be squeezed from both sides at once, and, once shut, they withhold the learning and capacity for good, since a resource in the ground rebuilds neither.

Place

Everywhere the production runs: from the field through the exchange to the works, and against the fund where it is resisted. It is the whole arc, the windfall drawn and spent, the currency risen, the traded base hollowed out.

Load bearing

Without it the other pieces are parts without a name: a windfall, a strong currency, a lost sector, an offshore fund, and no account of how one becomes the next. With it the misfit is whole: Dutch disease is the trap entire, a genuine gain that, spent as any windfall reasonably is, appreciates the currency and dismantles the traded base, the fortune and the hollowing shown to be one thing. It is load bearing because it is the structure the whole production exists to stage (Corden & Neary): the frame that binds the windfall, the real appreciation, the deindustrialisation, and the sovereign fund into a single bend, so the piece carries the phenomenon as a whole, a country left poorer for having struck it rich.

Apparent

A boom, a stroke of luck, an economy on the rise, everything a windfall should be. Seen at the surface, Dutch disease looks like unmixed good fortune, incomes up and the currency strong and the shops full, and the truth that the strong currency is pricing the factories out, that the base being lost is the one that would have carried the future, that a real bonanza is quietly hollowing the economy, stays hidden behind how prosperous a booming, spending country appears.

Yearbook

The whole of it: Dutch Disease is the windfall spent through the mover into the strong rate, crushing the factory into the lost trade, answered only by the nest egg saved against the pull to spend. It is the misfit named: a real bonanza that hollows the economy that got it, no villain in it and no free hero, the country poorer for its fortune.

Place

Suffered at the works, where the factories shrink and shut. The shadow of the field, the dynamic base the resource cannot replace.

Load bearing

Without it the boom is only a strong currency, an inconvenience that passes when the resource does. With it the misfit has its wound: the traded sector was where productivity grew and skill compounded and the country earned its way on merit, and it is gone, so the boom does not merely inconvenience the economy but dismantles the base that would have carried it after. The Lost Trade is load bearing because it is the cost that makes the disease a tragedy and not a phase (Corden & Neary; Sachs & Warner): the resource depletes and the learning does not return, so the piece carries the forfeited dynamic base, the future traded away for a finite windfall.

Apparent

An old sector fading, an economy moving on to where the money is, progress of a kind. Seen in the moment, the lost trade looks like natural adjustment, resources flowing to their best use, and the truth that the sector lost carried the learning and export capacity a resource never builds, that the country has swapped a base that compounds for a windfall that runs dry, stays hidden behind how reasonable moving to the boom appears.

Yearbook

Suffered by the factory through hollowing, the traded base crushed by the strong rate. It is the wound of the trap: the Lost Trade is what the appreciation forces and what the resource cannot rebuild, the future only the nest egg, by holding the rate down, could have kept.

Place

Held at the fund, invested abroad and kept from the domestic economy. Set against the exchange, the market whose appreciation it exists to prevent.

Load bearing

Without it the play has no answer, and the windfall runs to the hollowing with nothing to hold the rate. With it the misfit has its costly cure: the resource revenue saved offshore and only its return drawn home keeps the new money from bidding up domestic prices, so the currency does not rise and the traded sector is spared. The Nest Egg is load bearing because it is the remedy that carries its own price (sovereign-fund practice): it works only by locking a fortune away untouched while present needs go wanting, and holding that discipline for the life of the boom, so the piece carries both the cure for the disease and the temptation, renewed daily, that undoes it.

Apparent

Excessive caution, a country hoarding money it could be using, wealth left idle offshore. Seen with present needs pressing, the nest egg looks like miserliness, a fortune withheld from the schools and roads it could build now, and the truth that spending it would raise the currency and gut the factories, that the saving is the one thing sparing the base, stays hidden behind how absurd hoarding a windfall seems while the money is flush and the needs are real.

Yearbook

Kept by the steward through banking, the windfall held offshore against the pull to spend. It is the cure the play cannot make painless: the Nest Egg holds the strong rate down and spares the lost trade, and cannot do so without saving the windfall untouched, a fortune received and deliberately forgone.

Place

Set at the exchange, where the windfall's spending lifts non-traded prices. Felt at the works, where it lands as a cost base the world price will not cover.

Load bearing

Without it the boom is just extra income, and the factories keep their margin and their trade. With it the whole trap has its fulcrum: a real appreciation, risen domestic costs against a fixed world price, so that the traded sector is undercut abroad and outbid at home. The Strong Rate is load bearing because it is the mechanism that converts the windfall into ruin (Corden & Neary; Corden): the spending effect made concrete, so the piece carries the appreciation that turns a genuine gain into a squeeze no manufacturer can escape, the strong currency that does the deindustrialising.

Apparent

A sign of strength, a proud currency, evidence the country is doing well. Seen at the surface, the strong rate looks like success, a nation whose money buys more and whose prices reflect its new wealth, and the truth that it is exactly what prices the factories out, that a currency risen against the world is a traded sector priced out of it, stays hidden behind how healthy a strong currency is taken to be.

Yearbook

Raised by the mover through appreciating, the real appreciation the spending of the windfall drives. It is the fulcrum of the trap: the Strong Rate is what crushes the traded sector into the lost trade, and the one thing the nest egg, by keeping the windfall offshore, holds down.

Place

Earned at the field, where the resource pays a premium the world sustains. Either spent at the exchange or saved at the fund, and the whole play turns on which.

Load bearing

Without it there is no boom, no appreciation, no hollowing: an ordinary economy competing at an ordinary rate. With it the whole trap has its source: a real inflow of foreign exchange that pays the highest wages and floods the country with money, so that its spending raises the rate and its pull empties the works. The Windfall is load bearing because it is the genuine gain the misfit runs on (The Economist; Corden & Neary): the trouble is not a shortfall or a mistake but a real bonanza, so the piece carries the fortune whose ordinary, reasonable enjoyment is exactly what does the damage.

Apparent

Pure good fortune, money the country did not have and cannot be wrong to take. Seen alone, the windfall looks like unmixed blessing, a resource struck and wealth pouring in, and the truth that spending it raises the currency and guts the factories, that a real gain enjoyed as any gain would be dismantles the traded base, stays hidden behind how plainly good a fortune received appears.

Yearbook

Earned by the boom through booming, the genuine gain that pays the most and floods the country. It is the source of the trap: the Windfall spent raises the strong rate and forces the lost trade, and only saved as the nest egg does it spare the base rather than hollow it.

Has

A struck resource and a soaring price, earning foreign exchange the country did not have. The highest wages in the land to offer, and a flood of new income to pour into it. No malice and no plan, only fortune, and a finite well beneath it that will one day run dry.

Orders

Pay the most. Earn the foreign exchange, offer the best returns, and draw the country's labour and capital to the fields. Flood the nation with the new money a windfall brings.

Loses

The base the country will need, exactly by being the gift it is. Because it pays the most it pulls factors from the factories, and because it floods the country with money it drives the prices that raise the currency, so the seat cannot enrich the nation without undercutting its traded sector, its generosity the very thing that hollows the base. It is real wealth, and being spent as real wealth is, it dismantles what would have outlasted it.

Drives

Toward a windfall enjoyed, a genuine gain that guts the base by being spent, so the fortune that enriches the country is what prices its factories out of the world.

Has

A place on world markets, where it sells at a price it must take and cannot set. A cost base of wages and rents and inputs, rising with the boom around it. No way to lift its selling price, and no escape from the country's risen costs.

Orders

Meet the world price. Sell abroad at the price the world sets, hold your buyers, and keep your works running. Compete as you always have, on quality and cost.

Loses

Its margin and then its existence, exactly because it cannot pass the boom on. Because it must take the world's price while paying the country's risen wages, and loses its workers to the better-paid fields, the seat is squeezed from both sides at once, so it cannot both stay a price-taker abroad and survive the boom's inflation at home. It shrinks and shuts, and takes with it the learning and export capacity the resource never built.

Drives

Toward a competitive sector priced out, undercut abroad and outbid at home through no fault of its own, so the base that would have carried the country is the thing the boom dismantles.

Has

Labour and capital free to move to the best return, and new income to spend. A sound instinct: go where the pay is highest, and enjoy a windfall as a richer people would. No power over the exchange rate, only over where it works and what it buys.

Orders

Follow the boom. Send your labour and capital to the best-paid work, and spend the new income on what a richer country buys. Chase the return and enjoy the gain, the way any economy would.

Loses

Its own factories, exactly by pursuing the best return and spending the gain. Because its extra spending falls on what cannot be imported, it drives up domestic prices and so the real exchange rate, and because it moved to the fields, the works lose their workers too, so the seat cannot both chase the boom's returns and keep the traded sector competitive. It does right by every wage and purchase and, in the sum, prices its own country's manufacturing out of the world.

Drives

Toward factors and spending chasing the boom, right for each mover and hollowing for all, so the sensible pursuit of returns is what raises the rate that shuts the works.

Has

A means to sterilise the boom: a fund held abroad, and the authority to save the resource revenue in it. A clear case: the resource is finite and the traded base is not, and a windfall spent at home raises the rate that guts it. No way to make saving a fortune feel anything but absurd while present needs go wanting.

Orders

Bank it abroad. Save the resource revenue in a fund held offshore, spend only its steady return, and keep the new money out of the domestic economy so the currency does not rise. Hold the discipline for the life of the boom.

Loses

The windfall's enjoyment, exactly by sparing the base. Because sterilising the boom means locking a fortune away untouched while schools and roads and wages go wanting, against the flood of new money and the ballot's demand to spend it, the seat cannot keep the traded sector without denying the country the gain when the gain is most abundant, and a single lapse lets the rate rise again. It buys the base's survival with a fortune received and forgone, and must pay it over and over for decades.

Drives

Toward a windfall saved and not enjoyed, the base spared against the temptation of the present, so the one seat that would keep the factories must tell a flush country to lock its fortune away.

Initiated by

A windfall being spent through the economy. At the exchange, the new income chasing homes and meals and services, the things a richer country buys and cannot import.

Direction

Toward domestic prices risen and the currency strong. The spending falls on non-traded goods whose supply cannot be met from abroad, so appreciating drives their prices and the wages behind them up, and rising domestic costs are a real appreciation of the currency, whatever the nominal rate does.

Lever

The reasonableness of spending a windfall. Because a richer people rightly buys more and much of what it buys cannot be imported, the extra demand and the price rise it causes are the natural result of enjoyed wealth, so appreciating runs on sensible spending, the strong currency built from purchases no one can fault.

Echo

A country enjoying its wealth, and a currency risen against its own factories. The homes and services are dearer and the wages higher and the money well spent, and the real exchange rate has climbed above the world's, so what reads as the good life a boom pays for is, unseen, the cost base that will price the traded sector out.

Initiated by

A boom seen to be raising the currency, and someone unwilling to let it be spent at home. At the fund, the steward paying the resource revenue into an offshore account and drawing only its return.

Direction

Toward a windfall held out of the domestic economy. The steward saves the revenue abroad and spends only its steady yield, so banking drives the new money away from the goods it would bid up, keeping domestic prices and the real exchange rate from rising and leaving the traded sector its margin.

Lever

The plain truth that a windfall spent at home guts the factories. Because spending the boom raises the rate that prices manufacturing out, and the resource is finite while the base is not, the case to save is sound, so banking runs on the same prudence any household knows, turned to the hard national discipline of not spending a fortune.

Echo

A base spared, at the price of a fortune forgone. The currency has held and the factories run and the fund grows offshore, and the schools and roads and wages the money could have paid for now go wanting, so what reads as a country denying itself its own good fortune is, in truth, the one move that keeps the boom from hollowing it out.

Initiated by

A resource struck or its price soaring. At the field, the boom earning foreign exchange and offering the highest wages, and the country's factors beginning to move toward it.

Direction

Toward factors drawn in and income flooding out. The boom pays the most and earns the foreign exchange, so booming draws labour and capital to the fields and pours new money into the economy, the resource-movement pull and the spending flood both set in motion by one genuine gain.

Lever

The reality and welcome of the fortune. Because a struck resource is real wealth and the highest wage is worth chasing, nothing about booming invites suspicion, so the process runs on good fortune, the trap seeded by a windfall no one would refuse and everyone rightly enjoys.

Echo

A country richer and pulling toward the fields. The boom has its workers and the nation its new money, and the works are already a little emptier and the shops a little fuller, so what reads as plain good fortune is, unseen, the start of the pull and the flood that will raise the currency and hollow the base.

Initiated by

A real exchange rate risen above the world's, and a traded sector that must take the world's price. At the works, the factory selling abroad at a price it cannot lift while its wages and rents climb with the boom.

Direction

Toward a competitive sector shrunk and shut. The factory cannot pass the boom's inflation on to a world price it does not set, and it loses its workers to the fields and its buyers to cheaper rivals, so hollowing drives the traded sector down, undercutting it abroad and outbidding it at home until it contracts and closes.

Lever

The price-taking that the world market imposes. Because manufacturing must sell at the world's price and cannot raise it to cover the country's risen costs, the squeeze needs no error and no mismanagement, only a competitive sector meeting a strong currency, so hollowing runs on the market working exactly as it should against a sector that did nothing wrong.

Echo

A traded base shrunk, its learning gone with it. The factories have closed and their workers dispersed and their export earnings ended, and the productivity growth and skill they carried are gone where a resource cannot rebuild them, so what reads as an uncompetitive sector failing is, in truth, a genuine bonanza dismantling the base the country will need when it fades.

Direction

Save the windfall offshore and live on its return. Bank the resource revenue in a fund held abroad, spend only its steady yield, and keep the new money out of the domestic economy so the currency does not rise and the traded sector is spared. Hold the discipline for the life of the boom.

Orders

(The Steward banks the resource revenue abroad and sterilises the boom, keeping the windfall from raising the currency, against every pressure to spend it now.)

Implementation

(The Fund; the banking process; the windfall is held offshore as the nest egg, so it does not raise the strong rate and the traded base survives.)

Targets

• [ ] the resource revenue is saved in a fund held offshore, not spent at home
• [ ] only the fund's steady return is drawn into the domestic economy
• [ ] the boom is sterilised, so the real exchange rate does not rise
• [ ] the cost is borne: a fortune locked away while present needs go wanting, held for decades

Direction

Go where the pay is highest and spend the new income. Send labour and capital to the booming fields, and enjoy the windfall as a richer country would, buying homes and meals and services. Chase the return and spend the gain, the sensible thing for any factor and any household.

Orders

(The Mover sends its labour and capital to the fields and spends the windfall, bidding up the price of the non-traded goods that cannot be imported.)

Implementation

(The Exchange; the appreciating process; the spending falls on the non-traded and raises domestic prices, so the strong rate rises against the traded sector.)

Targets

• [ ] labour and capital move to the best-paid work in the booming fields
• [ ] the windfall is spent on homes, meals, and services that cannot be imported
• [ ] the extra demand raises the prices of non-traded goods and so domestic wages
• [ ] the risen prices are a real appreciation of the currency against the traded sector

Direction

Sell abroad at the price the world sets, and hold your buyers and your works. Compete as you always have, on quality and cost, meeting the world's price because you cannot lift it. Keep the export base running through the boom.

Orders

(The Factory sells at the world's price it cannot raise while paying the country's risen costs it cannot escape, its margin crushed from both sides.)

Implementation

(The Works; the hollowing process; the price-taker meets the strong rate as risen costs, so its trade is lost to the lost trade.)

Targets

• [ ] goods are sold abroad at the world's price, which cannot be lifted
• [ ] the country's risen wages, rents, and inputs are paid, which cannot be escaped
• [ ] workers are lost to the fields and buyers to cheaper foreign rivals
• [ ] the sector shrinks, its learning and export capacity going with it

Direction

Earn the foreign exchange and pay the highest wages in the land. Draw the country's labour and capital to the fields with the best returns, and flood the nation with the new money a windfall brings. Be the fortune it is, and offer it freely.

Orders

(The Boom earns foreign exchange and pays the most, drawing factors to the fields and pouring new income into the country.)

Implementation

(The Field; the booming process; the windfall is earned and offered at the highest wage, pulling factors in and flooding the country with money to spend.)

Targets

• [ ] the resource earns foreign exchange the country did not have
• [ ] the highest wages in the land are offered, drawing labour and capital to the fields
• [ ] the nation's income is lifted and flooded with new money to spend
• [ ] the pull and the flood are set to raise the currency and undercut the traded sector