Living Standards, Terms of Trade and Foreign Ownership: Reflections on the Australian Mining Boom
AbstractAustralia is experiencing its largest mining boom for more than a century and a half. This paper explores, from a national perspective, important economic differences that arise when a mining boom, such as the current one, is generated by sustained export price increases (trading gains) rather than export volume increases. Since 2003 the terms of trade changes – through their direct trading gain effect and indirect real GDP effects - have increased Australian living standards. The increase, measured from official data and relative to the US, is about 25 per cent; an increase which probably places Australian living standards well above those of the US. But official data inadequately adjusts for foreign ownership of mining resources suggesting that this estimate is probably a little too high.
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Bibliographic InfoPaper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 656.
Date of creation: Dec 2011
Date of revision:
resource booms; terms of trade; real GDP; foreign ownership; economic growth;
Other versions of this item:
- Robert G Gregory, 2012. "Living standards, terms of trade and foreign ownership: reflections on the Australian mining boom," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(2), pages 171-200, 04.
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-03 (All new papers)
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- Robert C. Feenstra & Robert Inklaar & Marcel Timmer, 2013. "The Next Generation of the Penn World Table," NBER Working Papers 19255, National Bureau of Economic Research, Inc.
- Freebairn, John, 2013. "Mining Booms and the Exchange Rate," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152152, Australian Agricultural and Resource Economics Society.
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