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Commodity Price Shocks and the Australian Economy since Federation

  • Sambit Bhattacharyya
  • Jeffrey G. Williamson

Australia has experienced frequent and large commodity export price shocks like Third World commodity exporters, but this price volatility has had much more modest impact on economic performance. Why? This paper explores Australian terms of trade volatility since 1901. It identifies two major price shock episodes before the recent mining-led boom and bust. It assesses their relative magnitude, their deindustrialization and distributional impact during the booms, and their labour market and policy responses throughout. Australia has indeed responded differently to volatile commodity prices than have other commodity exporters.

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Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 605.

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Date of creation: Apr 2009
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Handle: RePEc:auu:dpaper:605
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