Living Standards, Terms of Trade and Foreign Ownership: Reflections on the Australian Mining Boom

Robert Gregory

No 656, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: Australia is experiencing its largest mining boom for more than a century and a half. This paper explores, from a national perspective, important economic differences that arise when a mining boom, such as the current one, is generated by sustained export price increases (trading gains) rather than export volume increases. Since 2003 the terms of trade changes – through their direct trading gain effect and indirect real GDP effects - have increased Australian living standards. The increase, measured from official data and relative to the US, is about 25 per cent; an increase which probably places Australian living standards well above those of the US. But official data inadequately adjusts for foreign ownership of mining resources suggesting that this estimate is probably a little too high.

Keywords: resource booms; terms of trade; real GDP; foreign ownership; economic growth (search for similar items in EconPapers)
JEL-codes: C43 E01 O11 O47 Q33 (search for similar items in EconPapers)
Date: 2011-12
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Related works:
Journal Article: Living standards, terms of trade and foreign ownership: reflections on the Australian mining boom (2012)
Journal Article: Living standards, terms of trade and foreign ownership: reflections on the Australian mining boom* (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:656

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