Lower Bulk Commodity Prices and Their Effect on Economic Activity

Adam Gorajek and Daniel Rees
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Adam Gorajek: Reserve Bank of Australia

RBA Bulletin (Print copy discontinued), 2015, 31-38

Abstract: Recent declines in bulk commodity prices have reduced the growth of household income, company profits and government revenues. The declines have been associated with a contraction in mining investment and, by lowering the growth of aggregate demand, have restrained non-mining business investment. At the same time, a number of factors are helping to offset the effects of declining commodity prices. These include accommodative monetary policy and the depreciation of the exchange rate. Also, after saving some of the mining boom proceeds, households appear to be reducing their rates of saving to maintain consumption.

Keywords: Commodity prices; terms of trade; economic activity; exchange rate; household saving (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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