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The Mining Industry: From Bust to Boom

Author

Listed:
  • Ellis Connolly

    (Reserve Bank of Australia)

  • David Orsmond

    (Reserve Bank of Australia)

Abstract

The Australian mining industry experienced a remarkable turnaround during the 2000s. The rapid growth of emerging economies in Asia drove a surge in demand for commodities, particularly those used in steel and energy generation. With global supply unable to respond quickly, prices surged to historically high levels. In response, mining investment in Australia rose to record levels as a share of the economy by the end of the decade. The rise in commodity prices has boosted activity and incomes and encouraged the factors of production to shift towards the mining industry. The boom has also been associated with a large increase in the real exchange rate, affecting trade-exposed industries. Overall, Australia's macroeconomic performance during the decade was much more stable than during the earlier mining booms, reflecting a stronger institutional framework.

Suggested Citation

  • Ellis Connolly & David Orsmond, 2011. "The Mining Industry: From Bust to Boom," RBA Research Discussion Papers rdp2011-08, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp2011-08
    as

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    File URL: https://www.rba.gov.au/publications/rdp/2011/pdf/rdp2011-08.pdf
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    References listed on IDEAS

    as
    1. R.G. Gregory, 1976. "Some Implications Of The Growth Of The Mineral Sector," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 20(2), pages 71-91, August.
    2. Ivan Roberts & Anthony Rush, 2010. "Sources of Chinese Demand for Resource Commodities," RBA Research Discussion Papers rdp2010-08, Reserve Bank of Australia.
    3. Christian Gillitzer & Jonathan Kearns, 2005. "Long-term Patterns in Australia’s Terms of Trade," RBA Research Discussion Papers rdp2005-01, Reserve Bank of Australia.
    4. Corden, W M, 1982. "Exchange Rate Policy and the Resources Boom," The Economic Record, The Economic Society of Australia, vol. 58(160), pages 18-31, March.
    5. Ellis Connolly & Christine Lewis, 2010. "Structural Change in the Australian Economy," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 1-9, September.
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    More about this item

    Keywords

    Australian mining industry; commodity prices; structural change;
    All these keywords.

    JEL classification:

    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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