Commodity prices and the Australian economy : trends vs cycles [journal article]
By: Stephen Kirchner
From: Policy, Summer 2008/2009, Vol. 24 Issue 4
"Rising commodity export prices have been a positive factor for the Australian economy since 2002. With growth in export prices exceeding growth in import prices, our terms of trade have reached their highest level since the Korean War boom. There is debate over whether these gains are merely cyclical or represent a structural shift to a permanently higher level of national income. The pronounced cyclical behaviour of commodity prices, highlighted by their dramatic fall in the wake of the global financial crisis, makes it difficult to isolate underlying trends, but there is a case that productivity gains make real commodity prices decline over the long run."