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Industrial Impact of Commodity Price Shocks in Australia

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  • Knop, Stephen J
  • Vespignani, Joaquin L.

Abstract

Commodity price shocks largely affect the mining, construction and manufacturing industries in Australia. However, the financial and insurance sector is found to be relatively unaffected. Mining industry profits and nominal output substantially increase in response to commodity price shocks. Construction output is also found to increase significantly, especially in response to a bulk commodities shock, as a result of increased demand for resource-related construction. Increased demand for construction has a positive spillover effect to parts of the manufacturing industry that supply the construction sector with intermediate inputs, such as the non-metallic mineral sub-industry. In contrast, other manufacturing sub-industries with only tenuous links to the resources sector such as textiles, clothing and other manufacturing, are relatively unresponsive to commodity price shocks

Suggested Citation

  • Knop, Stephen J & Vespignani, Joaquin L., 2014. "Industrial Impact of Commodity Price Shocks in Australia," MPRA Paper 104678, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:104678
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    References listed on IDEAS

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    More about this item

    Keywords

    Commodity prices; Commodity Shocks; Australian economy;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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