Commodity Booms

Definition

Commodity booms refer to periods of significant increase in the prices and demand for primary commodities, such as oil, gold, or agricultural products. These booms often result from global economic factors or specific events that drive up commodity prices.

Related terms

Resource Curse:

The resource curse refers to the negative consequences that can arise from an abundance of natural resources in a country, such as corruption, economic instability, and inequality.

Dutch Disease: Dutch disease occurs when a country's economy becomes overly reliant on one booming sector (like commodities), leading to neglect of other sectors and potential negative impacts on manufacturing or agriculture.

Terms of Trade: Terms of trade represent the ratio between export prices and import prices. During commodity booms, terms of trade tend to improve for countries exporting those commodities.