Quantifying Australia's "Three Speed" Boom
AbstractThis paper examines Australia's terms of trade boom since 2003 with a particular interest in quantifying the links between the terms of trade and sectoral performance and identifying an associated 'secondary services boom'. Comparative static general equilibrium modelling and empirical analysis are used to examine the sectoral impacts on employment and income. The modelling confirms the services expansion of sufficient scale to tighten national labour markets and it projects an associated manufacturing contraction. A separate empirical analysis approaches the same links using vector auto-regressions estimated from pre-boom Australian data (1989 through 2002) and out of sample simulations over the subsequent boom period. The secondary services boom appears clearly but the results on manufacturing are ambiguous. Actual employment booms were larger, and manufacturing sector performance better, than predicted on the estimated VARs, suggesting that the recent boom accompanied changes in industrial structure and underlying behavioural parameters that have been favourable to surviving manufacturing firms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2013-10.
Length: 42 pages
Date of creation: Feb 2013
Date of revision:
Contact details of provider:
Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 0200
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: http://cama.crawford.anu.edu.au
More information through EDIRC
Resources boom; Dutch disease; general equilibrium; mining; secondary services boom; response asymmetry;
Other versions of this item:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-24 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gregory, R.G., 1976.
"Some Implications Of The Growth Of The Mineral Sector,"
Australian Journal of Agricultural Economics,
Australian Agricultural and Resource Economics Society, vol. 20(02), August.
- R.G. Gregory, 1976. "Some Implications Of The Growth Of The Mineral Sector," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 20(2), pages 71-91, 08.
- Rod Tyers & William Coleman, 2005. "Beyond Brigden: Australia’s Pre-War Manufacturing Tariffs, Real Wages and Economic Size," ANU Working Papers in Economics and Econometrics 2005-456, Australian National University, College of Business and Economics, School of Economics.
- Devaragan, Shantayanan & Lewis, Jeffrey D. & Robinson, Sherman, 1990. "Policy lessons from trade-focused, two-sector models," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 625-657.
- Anthony Venables, 2010.
"Resource rents; when to spend and how to save,"
International Tax and Public Finance,
Springer, vol. 17(4), pages 340-356, August.
- Richard Harris, 1983.
"Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition,"
524, Queen's University, Department of Economics.
- Harris, Richard, 1984. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," American Economic Review, American Economic Association, vol. 74(5), pages 1016-32, December.
- W Max Corden, 2012. "The Dutch Disease in Australia Policy Options for a Three-Speed Economy," Departmental Working Papers 2012-10, The Australian National University, Arndt-Corden Department of Economics.
- Valerie A. Ramey, 2009.
"Identifying Government Spending Shocks: It's All in the Timing,"
NBER Working Papers
15464, National Bureau of Economic Research, Inc.
- Valerie A. Ramey, 2011. "Identifying Government Spending Shocks: It's all in the Timing," The Quarterly Journal of Economics, Oxford University Press, vol. 126(1), pages 1-50.
- Cassing, James H. & Warr, Peter G., 1985. "The distributional impact of a resource boom," Journal of International Economics, Elsevier, vol. 18(3-4), pages 301-319, May.
- W. Max Corden, 2012. "The Dutch Disease in Australia: Policy Options for a Three-Speed Economy," Melbourne Institute Working Paper Series wp2012n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Christina D. Romer & David H. Romer, 2010.
"The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,"
American Economic Review,
American Economic Association, vol. 100(3), pages 763-801, June.
- Christina D. Romer & David H. Romer, 2007. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," NBER Working Papers 13264, National Bureau of Economic Research, Inc.
- Peter B. Dixon & Maureen T. Rimmer, 2004.
"The US Economy from 1992 to 1998: Results from a Detailed CGE Model,"
The Economic Record,
The Economic Society of Australia, vol. 80(s1), pages S13-S23, 09.
- Peter B. Dixon & Maureen T. Rimmer, 2004. "The US economy from 1992 to 1998: results from a detailed CGE model," Centre of Policy Studies/IMPACT Centre Working Papers g-144, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Peter Sheehan & Bob Gregory, 2013.
"The Resources Boom and Economic Policy in the Longer Run,"
CEPR Discussion Papers
683, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- 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, 06.
- Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-80, November.
- William Coleman, 2008. "Gauging Economic Performance Under Changing Terms Of Trade: Real Gross Domestic Income Or Real Gross Domestic Product?," Economic Papers, The Economic Society of Australia, vol. 27(4), pages 329-342, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cama Admin).
If references are entirely missing, you can add them using this form.