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The Resources Boom and Economic Policy in the Long Run

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  • Peter Sheehan
  • Robert G. Gregory

Abstract

A major economic impact on Australia of the rise of Asia has been through the resources sector. Australia is experiencing the biggest and most sustained resources boom in its history, and over the past decade has sustained economic growth well in advance of its developed country comparators. The mining boom is yet to run its full course, but at this stage the lift in Australian income levels, compared to Australian OECD Europe and US relativities of a decade ago, is probably of the order of 25 per cent. We think of this extraordinary mining boom as moving through three stages: the increase in the terms of trade, an induced mining investment response and finally a significant increase in mining exports. This paper explores the implications and policy issues arising as the mining boom passes through these three phases. The emphasis is firmly placed on the medium term and the analysis is stripped back to what we regard as the essential elements of economic outcomes and needed policy responses as the mining boom runs its course.
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Suggested Citation

  • Peter Sheehan & Robert G. Gregory, 2013. "The Resources Boom and Economic Policy in the Long Run," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(2), pages 121-139, June.
    • Handle: RePEc:bla:ausecr:v:46:y:2013:i:2:p:121-139
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    File URL: http://hdl.handle.net/10.1111/j.1467-8462.2013.12023.x
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    References listed on IDEAS

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    1. Gregory, Bob, 2011. "Then and Now: Reflections on Two Australian Mining Booms," IZA Discussion Papers 5969, Institute of Labor Economics (IZA).
    2. Alan Hall, 2011. "Real Gross Domestic Product and the Terms of Trade," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 44(3), pages 245-257, September.
    3. Ryan Macdonald, 2010. "Real Gross Domestic Income, Relative Prices, And Economic Performance Across The Oecd," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(3), pages 498-518, September.
    4. Macdonald, Ryan, 2010. "Real Gross Domestic Income, Relative Prices and Economic Performance Across the OECD," Economic Analysis (EA) Research Paper Series 2010059e, Statistics Canada, Analytical Studies Branch.
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    Cited by:

    1. Tim Robinson & Tim Atkin & Mark Caputo & Hao Wang, 2017. "Macroeconomic Consequences of Terms of Trade Episodes, Past and Present," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 57(3), pages 291-315, November.
    2. Liesel Henn & Michael B. Charles & Neil Douglas & Keith Sloan, 2015. "Debate: Multi-criteria framework needed to assess alternative financing methods for large-scale projects," Public Money & Management, Taylor & Francis Journals, vol. 35(2), pages 100-102, March.
    3. Kenneth Clements & Liang Li, 2017. "Understanding resource investments," Applied Economics, Taylor & Francis Journals, vol. 49(20), pages 1950-1962, April.
    4. W. Max Corden, 2012. "Dutch Disease in Australia: Policy Options for a Three-Speed Economy," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 45(3), pages 290-304, September.
    5. Rod Tyers, 2014. "Asymmetry in Boom-Bust Shocks: Australian Performance with Oligopoly," CAMA Working Papers 2014-50, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    6. Grace Taylor & Rod Tyers, 2017. "Secular Stagnation: Determinants and Consequences for Australia," The Economic Record, The Economic Society of Australia, vol. 93(303), pages 615-650, December.
    7. Rod Tyers & Aaron Walker, 2016. "Quantifying Australia's ‘Three-Speed’ Boom," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(1), pages 20-43, March.
    8. Sambit Bhattacharyya & Jeffrey Williamson, 2013. "Distributional Impact of Commodity Price Shocks: Australia over a Century," CEH Discussion Papers 019, Centre for Economic History, Research School of Economics, Australian National University.
    9. Dean Parham, 2013. "Australia's Productivity: Past, Present and Future," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 462-472, December.
    10. Sambit Bhattacharyya & Jeffrey G. Williamson, 2016. "Distributional Consequences of Commodity Price Shocks: Australia Over A Century," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(2), pages 223-244, June.
    11. Haslam McKenzie, Fiona, 2020. "Long distance commuting: A tool to mitigate the impacts of the resources industries boom and bust cycle?," Land Use Policy, Elsevier, vol. 93(C).
    12. Kenneth W. Clements & Jiawei Si & Thomas Simpson, 2016. "Understanding New Resource Projects," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 584-600, September.
    13. Cross, Jamie, 2019. "On the reduced macroeconomic volatility of the Australian economy: Good policy or good luck?," Economic Modelling, Elsevier, vol. 77(C), pages 174-186.
    14. Na Guo & Bo Zhang & Jamie L. Cross, 2022. "Time‐varying trend models for forecasting inflation in Australia," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(2), pages 316-330, March.
    15. Kenneth W. Clements & Liang Li, 2014. "Valuing Resource Investments," Economics Discussion / Working Papers 14-27, The University of Western Australia, Department of Economics.
    16. repec:ags:aare16:235308 is not listed on IDEAS

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