The Mining Industry: From Bust to Boom

Ellis Connolly and David Orsmond
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Ellis Connolly: Reserve Bank of Australia
David Orsmond: Reserve Bank of Australia

RBA Research Discussion Papers from 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.

Keywords: Australian mining industry; commodity prices; structural change (search for similar items in EconPapers)
JEL-codes: N57 Q31 Q33 Q43 (search for similar items in EconPapers)
Date: 2011-12
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Citations: View citations in EconPapers (39)

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