What are the opportunity costs though? At the extreme you could have 100% of your citizenry building houses, you can't then grow food, or build cars, etc, etc.

What are the opportunity costs though? At the extreme you could have 100% of your citizenry building houses, you can't then grow food, or build cars, etc, etc. Second, unless your economy is completely cut off from the outside world you're going to get leakage away. The builder you're paying to build houses is eventually going to want to show off his wealth by buying an iphone, or some champagne, or a Ferrari. To look at a more practical example lets look at the wood industry, and lets say that Australia's wood industry is already large enough to actually absorb this increase. The wood industry has the option of selling around the world, but this development has to buy from you. So you can sell them all the rubbish stuff that can't be sold internationally. So what then? The government doesn't want shoddy Australian houses being built so restricts exports of wood. But now the supply of wood products doesn't really match the supply and you've got teak being made into OSB, and your houses are made with high quality Australian wood, but your wood industry has gone down the toilet because the prices paid for OSB are nowhere near the prices paid for solid lumps of teak. Trade is good. It makes everyone on balance better off, what you propose is cutting off trade from the rest of the world, it's never going to end well.