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The Resources Boom and Economic Policy in the Longer Run

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  • Peter Sheehan
  • Bob Gregory

Abstract

A major economic impact on Australia of the rise of Asia has been through the resources sector. Australia is experiencing the biggest and most sustained resources boom in its history, and over the past decade has sustained economic growth well in advance of its developed country comparators. The mining boom is yet to run its full course, but at this stage the lift in Australian income levels, compared to Australian OECD Europe and US relativities of a decade ago, is probably of the order of 25 per cent. We think of this extraordinary mining boom as moving through three stages: the increase in the terms of trade, an induced mining investment response and finally a significant increase in mining exports. This paper explores the implications and policy issues arising as the mining boom passes through these three phases. The emphasis is firmly placed on the medium term and the analysis is stripped back to what we regard as the essential elements of economic outcomes and needed policy responses as the mining boom runs its course.

Suggested Citation

  • 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.
  • Handle: RePEc:auu:dpaper:683
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    File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP683.pdf
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    References listed on IDEAS

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    1. Gregory, Bob, 2011. "Then and Now: Reflections on Two Australian Mining Booms," IZA Discussion Papers 5969, Institute for the Study of Labor (IZA).
    2. Alan Hall, 2011. "Real Gross Domestic Product and the Terms of Trade," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 44(3), pages 245-257, September.
    3. Ryan Macdonald, 2010. "Real Gross Domestic Income, Relative Prices, And Economic Performance Across The Oecd," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(3), pages 498-518, September.
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    Cited by:

    1. repec:bla:ozechr:v:57:y:2017:i:3:p:291-315 is not listed on IDEAS
    2. 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.
    3. Rod Tyers, 2014. "Asymmetry in Boom-Bust Shocks: Australian Performance with Oligopoly," CAMA Working Papers 2014-50, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Tim Robinson & Tim Atkin & Mark Caputo & Hao Wang, 2017. "Macroeconomic Consequences of Terms of Trade Episodes, Past and Present," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 57(3), pages 291-315, November.
    5. Rod Tyers & Aaron Walker, 2016. "Quantifying Australia's ‘Three-Speed’ Boom," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(1), pages 20-43, March.
    6. Sambit Bhattacharyya & Jeffrey G. Williamson, 2013. "Distributional Impact of Commodity Price Shocks: Australia over a Century," OxCarre Working Papers 117, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    7. Dean Parham, 2013. "Australia's Productivity: Past, Present and Future," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 462-472, December.
    8. Kenneth W. Clements & Jiawei Si & Thomas Simpson, 2016. "Understanding New Resource Projects," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 584-600, September.
    9. repec:ags:aare16:235308 is not listed on IDEAS

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