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The sectorial impact of commodity price shocks in Australia

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  • Vespignani, Joaquin L.
  • Knop, Stephen J

Abstract

It is found that commodity price shocks largely affect the mining, construction and manufacturing industries in Australia. However, the financial and insurance sector is found to be relatively unaffected. Mining industry profits and nominal output substantially increase in response to commodity price shocks. Construction output is also found to increase significantly, especially in response to a bulk commodities shock, as a result of increased demand for resource related construction. Increased demand for construction has a positive spillover effect to parts of the manufacturing industry that supply the construction sector with intermediate inputs, such as the non-metallic mineral sub industry. In contrast, other manufacturing sub industries with only tenuous links to the resources sector such as textiles, clothing and other manufacturing, are relatively unresponsive to commodity price shocks.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 55435.

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Date of creation: 01 Jan 2014
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Handle: RePEc:pra:mprapa:55435

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Keywords: Commodity prices; Commodity Shocks; Australian economy;

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  1. Jonathan Kearns & Philip Lowe, 2011. "Australia's Prosperous 2000s: Housing and the Mining Boom," RBA Annual Conference Volume, in: Hugo Gerard & Jonathan Kearns (ed.), The Australian Economy in the 2000s Reserve Bank of Australia.
  2. Vernon Topp & Leo Soames & Dean Parham & Harry Bloch, 2008. "Productivity in the Mining Industry: Measurement and Interpretation," Staff Working Papers 0807, Productivity Commission, Government of Australia.
  3. Guidi, Francesco, 2009. "The economic effects of oil prices shocks on the UK manufacturing and services sector," MPRA Paper 16171, University Library of Munich, Germany.
  4. Dungey, Mardi & Fry-McKibbin, Renée & Linehan, Verity, 2013. "Chinese resource demand and the natural resource supplier," Working Papers 17027, University of Tasmania, School of Economics and Finance, revised 01 Jul 2013.
  5. Vespignani, Joaquin L., 2013. "The industrial impact of monetary shocks during the inflation targeting era in Australia," Working Papers 2012-12, University of Tasmania, School of Economics and Finance, revised 17 Jan 2013.
  6. Lee, Kiseok & Ni, Shawn, 2002. "On the dynamic effects of oil price shocks: a study using industry level data," Journal of Monetary Economics, Elsevier, vol. 49(4), pages 823-852, May.
  7. Edda Claus & Mardi Dungey & Renée Fry, 2008. "Monetary Policy in Illiquid Markets: Options for a Small Open Economy," Open Economies Review, Springer, vol. 19(3), pages 305-336, July.
  8. Ichiro Fukunaga & Naohisa Hirakata & Nao Sudo, 2010. "The Effects of Oil Price Changes on the Industry-Level Production and Prices in the U.S. and Japan," NBER Working Papers 15791, National Bureau of Economic Research, Inc.
  9. James Bishop & Christopher Kent & Michael Plumb & Vanessa Rayner, 2013. "The Resources Boom and the Australian Economy: A Sectoral Analysis," RBA Bulletin, Reserve Bank of Australia, pages 39-50, March.
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  11. David Jacobs & Vanessa Rayner, 2012. "The Role of Credit Supply in the Australian Economy," RBA Research Discussion Papers rdp2012-02, Reserve Bank of Australia.
  12. Joaquin L. Vespignani, 2013. "The Industrial Impact of Monetary Shocks During the Inflation-Targeting Era in A ustralia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 53(1), pages 47-71, 03.
  13. Jarkko Jääskelä & Penelope Smith, 2011. "Terms of Trade Shocks: What are They and What Do They Do?," RBA Research Discussion Papers rdp2011-05, Reserve Bank of Australia.
  14. Guay C. Lim & Chew Lian Chua & Edda Claus & Viet H. Nguyen, 2012. "Review of the Australian Economy 2011–12: A Case of Déjà Vu," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 45(1), pages 1-13, 02.
  15. Leon Berkelmans, 2005. "Credit and Monetary Policy: An Australian SVAR," RBA Research Discussion Papers rdp2005-06, Reserve Bank of Australia.
  16. Andrea Brischetto & Graham Voss, 1999. "A Structural Vector Autoregression Model of Monetary Policy in Australia," RBA Research Discussion Papers rdp1999-11, Reserve Bank of Australia.
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