Export-led growth can leave a country worse off, when the extra supply drives its own terms of trade down far enough to swamp the gain.
Bhagwati's 1958 result. A country that dominates world supply of a commodity can expand output, crash the price, and end up with less purchasing power than before.
In practice
- A region that dominates world cobalt supply doubles output, watches the price fall by two-thirds, and earns less than before.
- A freelance market where every writer doubles their output finds rates halve and the same total money is shared among more work.