Quantifying Australia's "Three Speed" Boom

Aaron Walker and Rodney Tyers
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Aaron Walker: Business School, University of Western Australia

No 13-06, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: This paper examines Australia’s terms of trade boom since 2003 with a particular interest in quantifying the links between the terms of trade and sectoral performance. The objective is to address the conjecture that a ‘secondary services boom’ is primarily responsible for the widespread nature of the associated gains in employment. Comparative static general equilibrium modelling and empirical analysis are used to examine the sectoral impacts on employment and income with the former confirming a services expansion of sufficient scale to tighten the labour market but indicating some (unobserved) “de-industrialisation”. The empirical analysis approaches the same links using vector auto-regressions estimated from pre-boom Australian data (1989 through 2002) and out of sample simulations over the subsequent boom period. The secondary services boom appears clearly in both income and employment, thought the results on manufacturing are ambiguous, with observed performance better than predicted on the estimated VARs, again suggesting that the recent boom accompanied changes in industrial structure and underlying behavioural parameters that have favoured surviving manufacturing firms.

Pages: 43 pages
Date: 2013
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https://www.business.uwa.edu.au/__data/assets/pdf_ ... Three-Speed-Boom.pdf

Related works:
Journal Article: Quantifying Australia's ‘Three-Speed’ Boom (2016)
Working Paper: Quantifying Australia's "Three Speed" Boom (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:uwa:wpaper:13-06

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