Chinese Resource Demand and the Natural Resource Supplier
This paper provides empirical evidence on the effects of Chinese resource demand on the resource rich natural resource supplier using the example of Australia. A structural VAR model is used to examine the effects of Chinese resource demand, commodity prices and foreign output on the macroeconomy with a formally specified mining and resources exports sector. The key findings of the paper are that shocks to Chinese demand and commodity prices result in a sustained increase in commodity prices and mining investment and a positive impact on the resources sector. However, these shocks eventually lead to lower real domestic output with factors of production moving out of the non-resources sectors and into the resources sector, resulting in a fall in nonresource sector output which is not fully offset by the rise in resources sector output. The results also indicate some market power by the natural resource supplier.
|Date of creation:||Sep 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601|
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: http://cama.crawford.anu.edu.au
More information through EDIRC
References listed on IDEAS
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.:
- David Gruen & Jacqueline Dwyer, 1996.
"Are Terms of Trade Rises Inflationary?,"
Australian Economic Review,
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 29(2), pages 211-224.
- Kenneth W. Clements & Renee Fry, 2006.
"Commodity Currencies and Currency Commodities,"
Economics Discussion / Working Papers
06-17, The University of Western Australia, Department of Economics.
- Rudiger Dornbusch, 1986.
"Exchange Rate Economics: 1986,"
NBER Working Papers
2071, National Bureau of Economic Research, Inc.
- Humphreys, David, 2010. "The great metals boom: A retrospective," Resources Policy, Elsevier, vol. 35(1), pages 1-13, March.
- Renée Fry & Adrian Pagan, 2011.
"Sign Restrictions in Structural Vector Autoregressions: A Critical Review,"
Journal of Economic Literature,
American Economic Association, vol. 49(4), pages 938-60, December.
- Renee Fry & Adrian Pagan, 2010. "Sign Restrictions in Structural Vector Autoregressions: A Critical Review," NCER Working Paper Series 57, National Centre for Econometric Research.
- Renee Fry & Adrian Pagan, 2010. "Sign Restrictions in Structural Vector Autoregressions: A Critical Review," CAMA Working Papers 2010-22, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, vol. 59(1), pages 43-76, June.
- 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.
- Vespignani, Joaquin L., 2013. "The industrial impact of monetary shocks during the inflation targeting era in Australia," Working Papers 2012-12, University of Tasmania, Tasmanian School of Business and Economics, revised 17 Jan 2013.
- Vespignani, Joaquin L., 2012. "The industrial impact of monetary shocks during the inflation targeting era in Australia," MPRA Paper 43686, University Library of Munich, Germany, revised 01 Jan 2013.
- Beine, Michel & Bos, Charles S. & Coulombe, Serge, 2012.
"Does the Canadian economy suffer from Dutch disease?,"
Resource and Energy Economics,
Elsevier, vol. 34(4), pages 468-492.
- Michel Beine & Charles Bos & Serge Coulombe, 2009. "Does the Canadian economy suffer from Dutch Disease?," CREA Discussion Paper Series 09-06, Center for Research in Economic Analysis, University of Luxembourg.
- Michel Beine & Charles S. Bos & Serge Coulombe, 2009. "Does the Canadian Economy suffer from Dutch Disease?," Tinbergen Institute Discussion Papers 09-096/4, Tinbergen Institute.
- Christopher A. Sims, 1992.
"Interpreting the Macroeconomic Time Series Facts: The Effects of Monetary Policy,"
Cowles Foundation Discussion Papers
1011, Cowles Foundation for Research in Economics, Yale University.
- Sims, Christopher A., 1992. "Interpreting the macroeconomic time series facts : The effects of monetary policy," European Economic Review, Elsevier, vol. 36(5), pages 975-1000, June.
- Jeremy Lawson & Daniel Rees, 2008. "A Sectoral Model of the Australian Economy," RBA Research Discussion Papers rdp2008-01, Reserve Bank of Australia.
- Mudd, Gavin M., 2010. "The Environmental sustainability of mining in Australia: key mega-trends and looming constraints," Resources Policy, Elsevier, vol. 35(2), pages 98-115, June.
- 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.
- Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
- Dungey, Mardi & Pagan, Adrian, 2000. "A Structural VAR Model of the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 76(235), pages 321-42, December.
- Leon Berkelmans, 2005. "Credit and Monetary Policy: An Australian SVAR," RBA Research Discussion Papers rdp2005-06, Reserve Bank of Australia.
- Gylfason, Thorvaldur & Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1997. "A Mixed Blessing: Natural Resources and Economic Growth," CEPR Discussion Papers 1668, C.E.P.R. Discussion Papers.
- Mardi Dungey & Renee Fry, 2007.
"The Identification Of Fiscal And Monetary Policy In A Structural Var,"
CAMA Working Papers
2007-29, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Dungey, Mardi & Fry, Renée, 2009. "The identification of fiscal and monetary policy in a structural VAR," Economic Modelling, Elsevier, vol. 26(6), pages 1147-1160, November.
- Ivan Roberts & Anthony Rush, 2010. "Sources of Chinese Demand for Resource Commodities," RBA Research Discussion Papers rdp2010-08, Reserve Bank of Australia.
- Edwin M. Truman, 2010. "Sovereign Wealth Funds: Threat or Salvation?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4983.
- Yongsheng Zhang & Chaoyu Zheng, 2008. "The Implications Of China'S Rapid Growth On Demand For Energy And Mining Products Imported From Australia," Economic Papers, The Economic Society of Australia, vol. 27(1), pages 95-106, 03.
- Larry A. Sjaastad, 1998. "Why PPP Real Exchange Rates Mislead," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 179-207, November.
- Tcha, MoonJoong & Wright, Damione, 1999. "Determinants of China's import demand for Australia's iron ore," Resources Policy, Elsevier, vol. 25(3), pages 143-149, September.
- Shaun K. Roache, 2012. "China's Impacton World Commodity Markets," IMF Working Papers 12/115, International Monetary Fund.
- Sjaastad, Larry A., 1998. "On exchange rates, nominal and real," Journal of International Money and Finance, Elsevier, vol. 17(3), pages 407-439, June.
- 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.
When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2013-54. See general information about how to correct material in RePEc.
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.