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Australia after the Terms of Trade Boom

Author

Listed:
  • Tim Atkin

    (Reserve Bank of Australia)

  • Mark Caputo

    (Reserve Bank of Australia)

  • Tim Robinson

    (Reserve Bank of Australia)

  • Hao Wang

    (Reserve Bank of Australia)

Abstract

The Australian economy has in recent years experienced the longest terms of trade boom in its history. This boom has had important macroeconomic outcomes – such as an elevated real exchange rate, large-scale investment in the resources sector and higher national income. The terms of trade have declined since their peak in September 2011 and are expected to ease further in coming years. This article draws extensively on Atkin et al (2014) and compares recent macroeconomic developments to those that occurred historically around major peaks in the terms of trade, while also highlighting key differences in the nature of the current cycle and the macroeconomic policy framework compared with those in the past.

Suggested Citation

  • Tim Atkin & Mark Caputo & Tim Robinson & Hao Wang, 2014. "Australia after the Terms of Trade Boom," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 55-62, March.
    • Handle: RePEc:rba:rbabul:mar2014-06
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2014/mar/pdf/bu-0314-6.pdf
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    References listed on IDEAS

    as
    1. Guy Debelle & Michael Plumb, 2006. "The Evolution of Exchange Rate Policy and Capital Controls in Australia," Asian Economic Papers, MIT Press, vol. 5(2), pages 7-29, Spring/Su.
    2. 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.
    3. Leon Berkelmans & Hao Wang, 2012. "Chinese Urban Residential Construction to 2040," RBA Research Discussion Papers rdp2012-04, Reserve Bank of Australia.
    4. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    5. Leon Berkelmans & Hao Wang, 2012. "Chinese Urban Residential Construction," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 21-26, September.
    6. Garnaut, Ross, 2012. "The contemporary China resources boom," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(2), pages 1-22.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Quezada, George & Adcock, M & Bratanova, Alexandra & Ponce Reyes, R & Hajkowicz, Stefan, 2017. "Surfing the Digital Tsunami: Scenarios Report. Preliminary scenarios exploring the decade ahead for Australian business and the economy," MPRA Paper 113820, University Library of Munich, Germany.
    2. Luo Wang & Bin Li & Benjamin Liu, 2017. "Can Macroeconomic Variables Explain Managed Fund Returns? The Australian Case," Economic Papers, The Economic Society of Australia, vol. 36(2), pages 171-184, June.
    3. Jenny Gordon, 2016. "Australia's Productivity: Some Insights from Productivity Analysis," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(2), pages 173-186, May.

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