What is immizerizing growth? Describe how it could happen and give at

What is immizerizing growth? Describe how it could happen and give at least one cited historical example.

What will be an ideal response?

ANSWER

Immizerizing growth represents economic growth that results in a reduction in national welfare. When a large country expands its productive capacity of an exported good, the biased economic growth will have effects on the country’s terms of trade. This occurs because the growth causes a more than proportionate increase in the supply of exports to the world market and in the demand for imports from the world market, thereby negatively affecting the terms of trade. Immizerizing growth is probably not a common phenomenon, but it may have occurred in the Netherlands in the 1960s. Other countries besides the Netherlands have experienced this kind of problem, but since it was first reported here, the phenomenon is commonly known as the Dutch disease.