Staple Theory of Economic Growth
University of Newcastle; Victoria University of Wellington - School of Economics & Finance
READER'S GUIDE TO THE SOCIAL SCIENCES, Jonathan Michie, ed., Fitzroy Dearborn Publishers, 2001
The Staple Theory of economic growth and development was first articulated to help explain the process of economic evolution in places with an abundance of natural resources and a relatively small population. The theory assumes that only by exporting staples products and importing manufacturing products can a staple based economy realize relatively high-levels of material well-being. The success of a staple economy depends on its capacity to transform staple products into cost competitive exports, mainly through supply side variables. The staple export sector can also lead the growth process even when it is not the economy's leading sector through linkages with other parts of the economy, though the extent of this depends on social and political factors.
Keywords: Staple theory, Growth, Development, Natural resources, Manufacturing sector, Trade
JEL Classification: O10, N11, N12, F43
Date posted: January 22, 2010