Raising the boom slider pumps foreign currency into the economy from resource exports. Demand for the local currency rises, so it appreciates — its value climbs toward a target set by the boom level. A stronger currency makes non-resource exports (factories, farms) effectively pricier abroad, eroding their competitiveness.
Competitiveness feeds a slower-moving "productive capacity" — factories and farms only close (or open) as fast as investment actually moves. Capacity erodes quickly when competitiveness falls below it (closures are fast) but rebuilds slowly when competitiveness recovers (rebuilding takes years of fresh investment). That asymmetry is the hollowing-out trap: hit "Trigger price crash" after a long boom and watch the currency snap back almost immediately while the factories and farms stay shuttered for years.
- Resource price / export volume — the boom's intensity; higher pulls in more forex and appreciates the currency harder.
- Currency value — an index where 1.0 is the pre-boom baseline exchange rate.
- Non-resource competitiveness — how price-competitive manufacturing/agriculture exports are abroad right now, given the current currency.
- Diversification index — the non-resource sector's share of total economic output; watch it collapse during the boom and lag badly after a bust.
Real-world relevance: this currency-appreciation/crowding-out mechanism is the classic "Dutch disease" — named after the Netherlands' manufacturing decline following its 1960s natural-gas boom — and it is the same dynamic behind resource-curse debates over oil states, mineral exporters and gas-rich economies today.