It probably doesn’t. It theoretically helps because devloping coutries have a cheap labor pool, and capital inflows should be able to take advantage of that. So, the country should be able to attract investment, and eventually create better jobs, which cerates a higher standard of living. Problem is that sometimes the side effects of this are huge deficits that can turn into hyper-inlfation.
Other way it helps them is if they have a lot of raw materials. The can export raw materials to more developed countries.
February 27th, 2010 at 4:46 pm
It probably doesn’t. It theoretically helps because devloping coutries have a cheap labor pool, and capital inflows should be able to take advantage of that. So, the country should be able to attract investment, and eventually create better jobs, which cerates a higher standard of living. Problem is that sometimes the side effects of this are huge deficits that can turn into hyper-inlfation.
Other way it helps them is if they have a lot of raw materials. The can export raw materials to more developed countries.