The economic effects of a ‘booming sector,’ also known as the Dutch disease, have been analyzed in depth.6 The key point is that absorption of the foreign exchange revenues derived from the booming sector’s exports requires an expansion in the non-tradables sector and a contraction in the tradables sector (not including the booming sector itself). The contraction of these non-booming exporting and import-competing sectors, and its implication for the people deriving their incomes from them, is the essence of the Dutch disease. The economic mechanism driving the resource reallocation is a real appreciation—a rise in the ratio of the domestic prices of non-traded goods and services to the domestic prices of internationally tradable goods and services.