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Transmission of a Resource Boom: The Case of Australia[Note 13. This is not a conditional statement. We fully recognise ...]
Author(s) -
Dungey Mardi,
FryMckibbin Renee,
Volkov Vladimir
Publication year - 2020
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/obes.12352
Subject(s) - boom , economics , commodity , resource (disambiguation) , proxy (statistics) , macroeconomics , market economy , computer science , environmental science , computer network , machine learning , environmental engineering
This paper presents evidence on the macroeconomic adjustment of a resource‐rich country to a resource boom using the effects of Chinese industrialization on Australia from 1988 to 2016. An SVAR model is specified, incorporating a proxy for Chinese resource demand and commodity prices to identify the effects of commodity supply and demand shocks on the Australian macroeconomy. We develop a multivariate historical decomposition to show how resource sector shocks lead the economy to deviate from a long‐run projection. The paper identifies four phases of the transmission of the resource boom before its conclusion in 2015.