Explaining the Recent Performance of Australia’s Manufactured Exports
Australia’s manufactured exports have grown rapidly since the mid-1980s. The growth of Australia’s trading partners and the overall depreciation of the exchange rate, while important, do not fully explain this growth. This paper seeks to explain the remaining growth in reference to firms’ cost structures, in particular their sunk cost structures. A model is developed. It shows how, in the presence of sunk costs, a shock to the economy can cause a permanent increase in the level of exports. This model is applied to Australia’s manufactured exports. The results suggest that their recent growth may not be undone, even if the recent economic shocks faced by exporters are reversed.
|Date of creation:||Aug 1993|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.rba.gov.au/
More information through EDIRC
|Order Information:||Web: http://www.rba.gov.au/forms/rdp-order-form/|
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.:
- Richard Baldwin, 1988.
"Hysteresis In Import Prices: The Beachhead Effect,"
NBER Working Papers
2545, National Bureau of Economic Research, Inc.
- Matthew T. Jones & Jenny Wilkinson, 1990. "Real Exchange Rates and Australian Export Competitiveness," RBA Research Discussion Papers rdp9005, Reserve Bank of Australia.
- John Pitchford, 1993. "The Exchange Rate and Macroeconomic Policy in Australia," RBA Annual Conference Volume, in: Adrian Blundell-Wignall (ed.), The Exchange Rate, International Trade and the Balance of Payments Reserve Bank of Australia.
- Richard Baldwin & Paul R. Krugman, 1986.
"Persistent Trade Effects of Large Exchage Rate Shocks,"
NBER Working Papers
2017, National Bureau of Economic Research, Inc.
- Baldwin, Richard & Krugman, Paul, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 635-54, November.
- Dixit, Avinash K, 1989.
"Entry and Exit Decisions under Uncertainty,"
Journal of Political Economy,
University of Chicago Press, vol. 97(3), pages 620-38, June.
- Goldstein, Morris & Khan, Mohsin S, 1978. "The Supply and Demand for Exports: A Simultaneous Approach," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 275-86, May.
When requesting a correction, please mention this item's handle: RePEc:rba:rbardp:rdp9310. 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: (Paula Drew)
If references are entirely missing, you can add them using this form.