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The impact of the Asian Crisis on Australia's primary exports: why it wasn't so bad

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  • Duncan, Ronald C.
  • Yang, Yongzheng

Abstract

This article explores the modest impact of the Asian Crisis on Australia’s primary commodity exports. Simulations using a global general equilibrium model show: (i) as capital flees Asia, investment in Australia increases and the trade deficit grows; (ii) while terms of trade deteriorate in the short run, they improve in the medium run as import demand increases in the crisis countries; (iii) exports of primary commodities expand as the crisis countries try to export more; (iv) more income‐elastic primary commodities fare less well than the income‐inelastic foodstuffs as incomes decline in the crisis countries; (v) Australia’s relatively low dependence on manufactured exports was a buffer as manufactured exports came under heavy pressure from exports from the crisis countries.

Suggested Citation

  • Duncan, Ronald C. & Yang, Yongzheng, 2000. "The impact of the Asian Crisis on Australia's primary exports: why it wasn't so bad," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(3), September.
  • Handle: RePEc:ags:aareaj:117843
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    File URL: http://purl.umn.edu/117843
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    References listed on IDEAS

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    1. Jenny Corbett & David Vines, 1999. "Asian Currency and Financial Crises: Lessons from Vulnerability, Crisis and Collapse," The World Economy, Wiley Blackwell, vol. 22(2), pages 155-177, March.
    2. Ianchovichina, Elena & Hertel, Thomas W., 1999. "The East Asian Economic Crisis: It's Not All Bad News," Choices, Agricultural and Applied Economics Association, vol. 14(2).
    3. McKibbin, Warwick J. & Wilcoxen, Peter J., 1998. "The theoretical and empirical structure of the G-Cubed model," Economic Modelling, Elsevier, vol. 16(1), pages 123-148, January.
    4. Warwick J McKibbin & Will Martin, 1998. "The East Asian Crisis: Investigating Causes and Policy Responses," Departmental Working Papers 1998-06, The Australian National University, Arndt-Corden Department of Economics.
    5. Marcus Noland & Sherman Robinson & Zhi Wang, 1999. "The Continuing Asian Financial Crisis: Global Adjustment and Trade," Working Paper Series WP99-4, Peterson Institute for International Economics.
    6. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    7. Kalpana Kochhar & Prakash Loungani & Mark R. Stone, 1998. "The East Asian Crisis; Macroeconomic Developments and Policy Lessons," IMF Working Papers 98/128, International Monetary Fund.
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    Cited by:

    1. Chi, Junwook & Cheng, Seu Keow, 2016. "Do exchange rate volatility and income affect Australia’s maritime export flows to Asia?," Transport Policy, Elsevier, vol. 47(C), pages 13-21.

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    Keywords

    International Relations/Trade;

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